U.S. officials are studying a detailed analysis of the Soviet Union that confirms what any Moscow shopper or visitor suspected: The Soviet economy is a basket-case and President Mikhail Gorbachev's perestroika reforms have so far succeeded only in making the problem worse.
The report suggests that outside help may not be possible or effective.The summary of a six-month study by the International Monetary Fund, which will be released in full in early January, will be an important element in decisions now being made within the U.S. government and the other six leading industrial nations.
Those decisions revolve around how - and if - the West can help the Soviet government survive long enough to incorporate far-reaching economic reforms.
Given the description of the disastrous state of the Soviet economy, the IMF report to the seven nations attending the annual economic summits is not encouraging.
The exhaustive report says that the Soviet Union was saved from earlier collapse only because of the dramatic increase in world oil prices in the 1970s. The Soviet Union is the world's second largest oil exporter, following Saudi Arabia.
But, the report says, in the current situation, with oil prices again going through the roof, Soviet oil and gas production and exports are actually falling because of a breakdown in the production facilities, pipelines and transportation system.
Thus, the Soviet Union cannot take advantage of the current price bubble.
The report says the Gorbachev reforms sometimes had a negative effect because they were introduced in piecemeal fashion, thus introducing the factors of confusion and inconsistency.
As a result of the partial reforms, according to the report, inflation and unemployment began to creep into the Soviet economy. The report puts the current annual rate of inflation at about 12 percent and unemployment at about 1.5 percent.
One result is that the Soviet economy is now partly a primitive barter system where consumers trade potatoes for shoes. Also, black-market U.S. dollars and packs of cigarettes have become important units of currency.
Should consumer goods become more easily available, the report says, that would probably increase inflation since there is now a huge amount of personal savings - estimated at 250 billion rubles - which remain unspent because there is nothing in the stores to buy.
The IMF report confirms an earlier analysis by the CIA that said the Soviet national railroad system is close to a complete breakdown and that the agricultural industry, despite a good harvest year, was a serious drag on the economy because of storage and distribution problems.
Despite Gorbachev's intention of cutting back on defense spending and the size of the army, the IMF report says that the military burden on the economy remains significant, possibly as high as 18 percent of the GNP. The equivalent figure for the United States would be about 7 percent.