By TOM MORRIS

One offers energy,

the other missiles

As the modem-day cowboys in the White House try and heat up the inter- National situation with renewed charges

of a “Soviet threat’, one of their key §

problems will be to whip western Europe into line behind a new weapons’ program and greater participation in the cold war.

But life goes on and multi-lateral rela-

tions between socialist and capitalist 7

Europe continue to grow. In the works now is an incredible plan to build a 3,000-mile natural gas pipeline linking Soviet gasfields in the northern Yamal Peninsula to energy-hungry Western Europe.

The line, which would take five years to complete and cost $10-$15-billion, will Supply Western Europe with 25% of its 8as needs compared to 9% at present. “Even the American experience with the Alaskan pipeline, which is only one- quarter as long, is nothing compared to

we face here,’’ said one West Ger- Man industrialist. In addition to guaranteed gas supplies,

Western Europe’s economy will benefit |

from contracts to provide steel, com- Préssors, pipelaying equipment and Other items. The deal will be partially financed by western consortiums ‘in ex-

Change for gas deliveries. Western loans 9)

are expected to be paid off in eight to 10 years.

Everyone’s happy, you might con- clude. Soviet gasfields will open up and western Europe will receive guaranteed supplies — an example of mutual interest and mutual benefit.

But not so. Getting wind of this €normous deal, Reagan adminstration officials warn darkly that the proposed Pipeline ‘tis an enormous security risk’.

It’s revealling that the White House, which brands international solidarity as

terrorism” now brands mutually-bene- ficial trade as ‘‘an enormous security Tisk’’. The USSR offers Western Europe energy resources, ‘the U.S. offers medium-range rockets and the neutron bomb. The comparison will not be lost on erica’s ‘‘allies’’.

They enjoyed their Great Beginning’

The menu card in front ofeach guest at Reagan’s 70th birthday party at the

ite House bore the words, ‘‘Let Us |

Enjoy Our Great Beginning’.

Enjoy they did. The eight-course din- ner included foi gras on toast, scallops with truffle butter, salmon, veal, ravioli Stuffed with wild mushrooms and French

Wines and champagnes. The ravioli, said }

the chef, took five hours to prepare.

Nancy Reagan had her manicurist flown in from California. The U.S. tax- Payer got off lightly, though, because her

esser, Julius, also from California, Was already in Washington.

Seemingly content at 70, and pleas- antly stuffed, Reagan then got back to the business at hand which inclyded tearing - guts out of federal school lunch and Sod stamp programs.

New U.S. ambassador More to junta’s liking .

Frederich Lo Chapin, new U.S. am- bassador to El Salvador, was former Under Secretary for International Sec- urity Affairs in Latin America and helped Plan U.S. military aid to the junta, in- Cluding training of junta officers and the Sending of U.S. ‘“‘advisers’’. Chapin was ©xpelled from Ethiopia in August for faerence in that country’s internal af-

PHOTO — APN

& BRE

being solved since a large portion of their social development

Housing, once a major problem in the USSR has come close to Photo shows new village housing in Moldavia, in the western USSR. The USSR's cost-of-living index has risen two points in 10

fund of $170-billion yearly has been earmarked for this purpose. years, incomes have gone up 40%.

This article, prepared especially for the Tribune by Novosti Press Agency (APN), examines some aspects of the Soviet economy as the country discusses the new draft economic plan for 1981-85.

* * *

No country is without oné or another economic difficulty and the Soviet Union is no exception. But, despite all its prob- lems and financial limitations, the USSR does not resort to budget cuts in its social and cultural needs to obtain funds for other sectors.

Almost 20 of the USSR’s 64 years have been spent in defensive wars and recon- struction. But throughout, it has consis- tently raised its investments toward so- cial and cultural requirements.

In 1940, 23.5% of the national budget was devoted to this sector while in 1981 the figure stands at 34.2%. In fact the sum grows in both relative and absolute terms and stands this year at 102 billion roubles (about $170-billion) — and that is only from the state budget. If we add to that monies from industrial enterprises, col-

‘lective farms, consumer cooperatives

and public organizations, the sum in- creases to 127 billion roubles (compared to 58 billion in 1970).

* * *

The main aim of the five year plan now

- under discussion is the continued growth

in this area. This is shown in the draft

‘ guidelines under discussion for the

USSR’s economic and social develop- ment (1981-1985) and for the period up to 1990, which are being considered at the 26th Congress of the Communist Party of the Soviet Union which opened Feb. 23° in Moscow.

The first thing you notice in this well-

- detailed plan is that the Soviet economy

will continue to grow, overcoming the twin evils faced by Western indus- trialized nations — inflation and un- employment. ; The Soviet economy creates two mill- ion jobs each year. The basic assets of the economy have increased by 40% over the past five years stimulated by an investment of 635 billion roubles and the building of 1,200 large-scale industrial plants. 3 A feature of the new draft economic plan is that it seriously tackles existing problems and drawbacks, especially concerning efficiency and the economy's capacity to supply food and consumer goods. It shows that'a rather paradoxical situation has arisen in the Soviet market. The consumer has considerable sums to spend on the one hand and there are

plenty of goods to buy on the other. But many of these goods are not in demand, creating not a general shortage, but a shortage of goods in demand — new, fashionable goods which meet individual tastes.

* * *

Following the destruction during World War Two, the USSR suffered acute shortages making it necessary to produce goods at the highest rates possible. Today, the USSR has surpass- ed the U.S. in over 50 categories and pulled even in many more.

But the quality of many items is below that of foreign goods and thus fail to satisfy the consumer. The new draft plan calls for a rapid upgrading in quality to meet these demands.

* * *

The food program is another priority.

Between 1976 and 1980 the USSR pro- -

duced 200 million tons of grian annually (compared to 130 million per year in

1961-65). Per capita meat consumption for the same period rose from 48 to 58 kilograms and milk from 307 to 319 kilo- grams.

However, the relative growth in food production, given the potential of Soviet farming, is inadequate, the draft report says, and cites unacceptable losses of grains, meat, milk, fruit and vegetables during storage and transportation.

* * *

Wages in the USSR have risen each year over the past 20 years, and this must be seen against the background of the maintenance of stable retail food and manufactured goods prices. The new plan sees the average monthly earnings of factory and office workers rising by 13 to 16% reaching between 190-195 roubles — about $340. -

If officially converted to Canadian dol- lars, Soviet earnings may seem low. But to obtain a true picture, you must take into account the actual purchasing power and entire structure of the Soviet fami- ly’s budget.

For example: taxes for an ordinary family run at an average of 8% (the high- est rate is 13%). There are no social in- surance payments — the entire sum being covered by the state. :

Rents remain at the 1928 level and av- erage $20-30 per month. (And this despite increased construction and material costs).

‘Public transport is incredibly cheap (and plentiful); all medical and educa- tional costs are free.

In total, social benefits enjoyed by

Soviet citizens add an average of 23% to their income and are scheduled to rise sharply in the next five years.

The ‘‘public consumptionfund’’ comes mainly from industrial profits which are ploughed not only into economic expan- sion, but to provide such social needs as medicare, free education, pensions, day- care, cultural and recreational centres and-a mass sports system. One example of the costs invalved can be seen in uni- versity training. The average cost to the State of a five-year training course is ap- proximately $8,500 per student — and today there are over five million univer- sity students enrolled, among them some 70,000 foreign students.

* * *

Last year, 95% of foodstuffs and over 90% of non-food products continued to be sold at 1970 prices — in itself a unique achievement. But the crisis in the capitalist world does have a partial effect

- on the Soviet economy. Prices for pro-

ducts purchased abroad (such as coffee, cocoa, etc.) were raised. The USSR was also forced to raise the price of gold, al- though not as sharply as in the West.

‘Other price fluctuations were in- creases in the cost of furs, alcoholic drinks, furniture units and several other items. And ir 1978 gasoline rose by 50%. On the other side, prices dropped for products such as TV sets, radios, tape recorders, clothing, footwear, and household chemicals.

With offsetting price movements, the overall cost index in the country stands only two points higher than in 1970, while average incomes have risen 40% over the same 10 years.

- * * *

Many necessities of life — meat, milk, footwear, clothing, fish and vegetables — are sold well below production costs and the losses coveréd by an annual state subsidy of some $50-billion.

This money comes from sales of spe- cialty and fancy goods sold at prices much higher than their costs. The USSR believes such redistribution serves the interests of the majority. Gas, electricity,

telephone charges and public transit ©

fares (except taxis) have not increased since 1948. : :

State regulation of prices, especially on life’s necessities, means that today as

_in the future, every citizen is assured of

what he or she needs to live well. When we add to this the steadily rising incomes — wages, pensions, allowances — we can see the 17% hike in the citizens’ liv- ing standard over the past five years will continue and accelerate. ;

PACIFIC TRIBUNE—FEB. 27, 1981—Page 7