RUSSIAN STRENGTH

Wairarapa Times-Age, 7 August 1940, Page 9

RUSSIAN STRENGTH

HER ECONOMIC SITUATION COAL, OIL AND TRANSPORT. SOME RECENT DEVELOPMENTS. However enigmatic Russia's political structure may be. fairly precise information on her recent economic development has now become available. says a writer in the "Manchester Guardian.” In this article we propose to examine two vital indices: fuel and transport, which are perhaps the most essential for the Soviet Union's further industrial growth and for its strength in case of protracted and complete belligerency. They are the measure, too, of Russia’s economic capacity to supply Germany. In spite of noticeable increases in coal production — Russia’s share of world output has risen from 2.9 per cent in 1928 to 11.2 per cent in 1936 — it has constantly lagged behind planned estimates. Although it appears that the disparity between plan and fulfilment was less conspicuous during the Second Five-Year Plan (1932-37) than during the first planned quinquennium, total output was 16.5 per cent below schedule, or 127,900,000 tons as compared with the estimated figure of 152,500.000. COALMINING PATTERN. The distribution of Russian coalmining remained very uneven, notwithstanding the grandiose policy of economic location; in 1938, according to official data, the Donetz Basin, which possesses 5.4 per cent of the total coal deposits of the U.S.S.R.. accounted for 58.9 per cent of the country’s coal output. The degree of mechanisation of coal production is still extremely unsatisfactory; transport and loading continue to be larged carried on by horses and by hand, although hewing is almost completely mechanised. As regards the second principal pillar of the fuel industry, the production of oil, a marked deficiency in plan fulfilment can also be noted. In fact, the disparity between plan and realisation in oil was much more pronounced than in coal; only 30,400.000 tons were produced in 1937, as compared with 46,800,000 tons laid down by the Second Five-Year Plan (which represents only a 65 per cent fulfilment). Needless to say, the requirements of the internal market remained far in excess of output.

Oil is a much weaker link in the Soviet economy than coal. Because of the dependence of Russian agriculture on tractors, inadequacy in the supply of oil would seriously impede cultivation. Recourse cannot be had to animal tractive power, because, since the catastrophic decapitation of livestock in 1929, the number of horses has not. so far. recovered; in 1934 it amounted to only 48.9 per cent of the 1916 livestock census. Hence M. Kaganovitch was right when he observed: “Everybody knows that without oil we cannot have tractors. And no tractors means no grain or cotton.” Additional and surging demands for oil are voiced by the growing automobile and aircraft industries. CAUSE OF CONTRACTION. In view of these vast internal ■(though in many cases admittedly wasteful and excessive) requirements for liquid fuel, whose output does not rise at the planned rate, it is not surprising that Russian oil exports have contracted of late. As compared with the maximum export of 5,224,302 tons in 1931 (when Russia was forcing her 'exports with the object of importing machinery) oil exports in 1933 amounted to some 1,200,000 tons of oil petroleum products. The other serious disability of Russia's oil industry is its vulnerable character and its topheaviness. Up to the present the Baku oilfields have supplied some 75 per cent of the total output, although Azerbaijan possesses only 29 per cent of the total oil reserves of the country. Thus two principal tasks face the Soviet oil industry: (1) To develop production so as to i satisfy fully the demand; and (2) to ' develop oil production of the eastern oil-fields —for example. Ishimbaeva. and fields in the Perm district (the socalled “Second Baku"). That these very rich oilfields will ultimately become important sources of supply there is no doubt, but the task requires time and bristles with manifold difficulties. THE QUESTION OF HAULAGE. 1 Towards the end of the Third FiveYear Plan the output of the "Second Baku" is scheduled to reach 7,000.000 | tons out of the total projected output of 54.000,000 tons; the topheaviness of the Soviet oil industry is thus not like- ! ly to be removed during the Third Five-Year Plan period. It is questionable whether the planned increase in output, even if fulfilled, will satisfy the growing internal requirements. Last, but not least, there remains, as with coal, the question of the reduction of the average haulage of oil. This is the more important as the Soviet transport system has had to carry an excessive volume of goods and passenger traffic in'recent years. Transport presented very serious problems during the First Five-Year Plan, and even as late as 1934 Stalin referred to it as the "weak spot which may act as a stumbling block, and is already acting as a stumbling block to c.ur whole economic life, and above all to our trade.” As compared to 1913 goods traffic on the railways (which account for about 90 per cent of the country’s total goods transport) had risen more than five times and passenger traffic three and a-half times at the end of the Second Five-Year Plan, while density of rail traffic increased by three times; the mileage, however, was only 44.1 per cent greater than in 1913. All this rendered the reconstruction and extension of the permanent way as well as constant repairing of the old tracks most urgent. Up to 1935 or so conditions remained very bad in this respect. The state of the permanent way was in many cases simply appalling and accidents were frequent. IMPROVED TRANSPORT. After 1935, however, conditions began to improve noticeably but the assignments of the Second Five-Year Plan as regards the reconditioning of the permanent way were not fulfilled. At the end of 1937 the length of the operated track increased by only 3.8 per cent, as compared with 1932. Only towards the end of the second planned quinquennium did the rate of increase in transport material (namely, tractive power and freight capacity) begin to exceed the demands of goods traffic. But it is noteworthy that in spite of the deficient material basis the quantity of goods transported exceeded the original plan. This is certainly indicative of improved organisation; but it also furnishes proof that the Soviet railway system has to work under heavy strain. ' Very great improvements will be needed to put the Soviet transport sys-

tern on a really sound footing, the more so as goods turnover is rising fast and military requirements are not easily calculable. Particularly questionable is the "export" capacity" of the Soviet transport system, for Russian communications have been developed in the interests of the domestic economy. In conclusion, the opinion may be hazarded that these short-term weaknesses of the Soviet economy may easily bo exaggerated, since it is fashionable among the Bolshevik leaders to delight in ventilating their various difficulties (perhaps as a kind of psychological compensation for the colourless political unanimity). On the other hand, there can be no doubt that since these disabilities cannot be repaired in the short run they present substantial impediments in the way both of internal economic activity and of export capacity. It is hoped that this survey will help the reader to arrive at a correct appraisal of Russia's economic strength.