Soviets exaggerate economic record, Western experts say

The Soviets have been overstating the performance of their economy in the two years since Mikhail Gorbachev came to power. This is the conclusion of several experts who have closely examined recent Soviet economic statistics. One of them, Jan Vanous, a Washington economic consultant, says there is considerable evidence of a ``partially bungled effort at economic disinformation.''

These experts say they have no way of knowing whether the statistical distortions were ordered from the Kremlin itself, but they tend to doubt it. Whatever the source, the apparent manipulation could be damaging both at home and abroad for Mr. Gorbachev.

The relatively new Communist Party leader has been talking a great deal about glasnost, or openness. Vanous says that by publishing ``a special `political' set of key aggregate economic statistics,'' the Soviets provide ``ammunition to those Western analysts, journalists, and politicians who have always maintained that Soviet statistics contain mostly lies and distortions.'' Soviet official statistics show turnover in retail trade growing 4.3 percent in 1985 and 6.4 percent in 1986. Mr. Vanous estimates actual growth at 1.6 percent and 0.5 percent. Official numbers put the growth of total goods consumption in real terms at 3.1 percent in 1985 and 3.6 percent in 1986. Vanous calculates a mere 0.8 percent in both years.

The Soviets have traditionally concealed much important statistical data. They regard international monetary reserves of gold and foreign exchange as a state secret of strategic importance. True measures of social problems that could be politically damaging, such as crime, are not made public.

Most experts, however, believe the Soviets generally have made a genuine effort to turn out decent measures of industrial output and national consumption - at least since the days of dictator Joseph Stalin, when the numbers were nearly always manipulated for political purposes.

For instance, Philip Hanson from the Center for Russian and East European Studies at the University of Birmingham, England, says the main numbers for physical output of such products as coal, steel, oil, and so on are ``reasonably reliable.'' He adds that when these industry-by-industry results are aggregated into national income statistics, the procedures tend to overstate growth somewhat. But this has not been a matter of deliberate misinformation - until the last two years.

Although analysts have noted the discrepancies, none is sure how they came about.

Ed Hewett, a scholar at the Brookings Institution, speculates that the Soviet statisticians felt under pressure to show economic growth and, without offering any public explanation, altered the method for accounting for taxes on alcohol in order to make the economic statistics look better. (See box.)

``I doubt anyone was dumb enough [in the ruling Politburo] to send an order down, `Give me higher numbers,''' he says.

Gorbachev and his key advisers have indicated an interest in broader Soviet participation in the international economy. They have been exploring membership in the General Agreement on Tariffs and Trade and some type of affiliation with the International Monetary Fund and the World Bank.

A reputation for doctored statistics could make entry into these key organizations in the world economic community difficult.

``One of the first conditions for these steps would be improved flow of reliable economic information from the Soviet Union,'' notes Vanous in PlanEcon Report. Vanous is head of PlanEcon Inc., a Washington-based consulting firm.

At home, a lack of accurate statistics could hurt Gorbachev's attempts to reform the Soviet economy.

``Gorbachev is aware that the Soviet economic system has serious - though not insurmountable - difficulties,'' Vanous says.

``He is currently in the process of trying to get a handle on what to do and is already initiating certain reforms.''

Gorbachev will need to get quick information on the impact of his policy experiments, Vanous says.

Without prompt, reliable economic information, the Soviet leader will be unable to know which experiments work, and which do not.

Vanous suggests that Gorbachev ``would be well advised to pay greater attention to the amount and quality of economic information available to him personally and to the broad range of Soviet economic decisionmakers.''

A reading of Gorbachev's recent speeches, notes Brookings's Mr. Hewett, shows that he seems to be concerned that statistics showing fast growth will breed complacency among the Soviet people. He has emphasized that his reforms are just at their beginning and will need full popular support.