Western help for Soviets - their credit rates high with an American analyst

ARE the West Europeans suckers to lend money to the Soviet Union? Economist Jan Vanous thinks not. He figures the Soviets remain a good credit risk.

This month commercial banks in West Germany, France, Britain, and Italy talk of credit lines worth about $8 billion for Moscow's Bank for Foreign Economic Affairs. For example, when West German Chancellor Helmut Kohl visited Moscow last week, 30 contracts worth more than $1.5 billion were signed to modernize Soviet consumer industries. The deals hung on the availability of credit.

Japan, Austria, Sweden, and perhaps Finland, South Korea, and Taiwan, could offer further credits to the Soviets.

Dr. Vanous maintains that as long as Western credits do not affect national security, the United States should not try to interfere.

``We shouldn't do anything nationally to help [Soviet President Mikhail] Gorbachev or to aggravate his economic problems,'' says Vanous, editor of PlanEcon, a Washington-based newsletter on East-bloc economies.

The Reagan administration and some congressmen are worried that the credits might help the Soviets avoid coming to an arms reduction deal with the West or lead to a relaxation of rules on technology exports of military value to the Soviets. But Vanous doesn't see the credits as being such a big deal.

Here's why.

First, the credits aren't actual loans - just credit lines. He doesn't expect the Soviets to draw them down by buying Western goods all at once. They will buy where the goods are cheapest, not just where credit has been offered. He suspects that the British and French credits ``are way out of line'' with what the Soviets will want to buy from these nations.

Moreover, with its good credit standing, the Soviet Union doesn't need such credit lines. It can easily raise money through syndications on the Euromoney markets. And it gets that money at a low or of 1 percent above the cost of money to London banks.

Second, the Soviets have never gone overboard in their borrowing, unlike such Comecon partners as Poland or Hungary.

In terms of US dollars, the Soviet debt looks considerably larger than it did several years ago. But Vanous says this is a result of a ``foreign-exchange effect.'' The drop in the foreign-exchange value of the dollar since February 1985 of more than 50 percent makes the Soviet debts greater when measured in dollars. But most of the money is owed to Western Europe. In terms of West German marks, Soviet debts haven't increased much.

A decline in the price of oil and other key Soviet exports has hurt the Soviets' terms of trade. They get fewer dollars or other hard currencies for the same volume of goods shipped to the Western markets.

Nonetheless, the USSR's ``debt service ratio'' is a modest 16 to 17 percent - ``within the safe range.'' This ratio compares Soviet repayments of medium- and long-term debt plus interest charges on debt with its current-account receipts - its earnings from exports, income from foreign loans, and so on.

For key Latin American debtor nations, such as Brazil and Argentina, that ratio is about two times higher.

Vanous offers a rough balance sheet for the Soviet Union showing that it owes hard-currency countries about $40 billion. This is offset by about $15 billion that Soviet financial institutions have deposited in Western banks. Also, the Soviets have about $30 billion in gold and other commodity reserves held by the government.

The Soviets have another sizable asset - about $60 billion of hard-currency loans owed them by third-world or communist countries. Some of this money may be uncollectible. But more than half of it is owed by Middle East countries such as Iraq, Syria, and Libya on Soviet arms purchases. Such oil-rich nations offer good prospects for repayment.

``They are a better bet than Argentina or Brazil,'' says Vanous.

Moreover, he adds, the Soviets are less averse than Western nations to using pressure tactics to collect on their debts - such as threatening to stop shipments of weapons or parts.

The Czech-born economist expects the Soviets to use their credit lines to buy consumer goods or the machines that make consumer goods to help fill bare store shelves at home. But he doesn't expect a great rush of orders.

``If the Soviets drew on these lines over the next year, and drew them all out, then I would shift my view,'' he says. He would start getting worried about the safety of loans to the Soviets.