A Balance Sheet of Soviet Foreign Aid

Amid the various anniversaries of the last year, one seems to have passed unnoticed. It was just ten years ago that the Soviet Union embarked on its program of economic aid to neutralist countries. Beginning with a grain elevator and highway program in Kabul, Afghanistan, and the Bhilai Steel Mill in India, Soviet promises of aid mounted rapidly until they reached a peak of more than $1 billion in the year 1960. In terms of gross national product, this was as much as the United States was providing at the time. Subsequently, however, in late 1961, promises of Soviet aid diminished and remained insignificant until late 1963.

The ten-year mark is an appropriate point at which to evaluate the program of Soviet aid which in that period has totaled $3.5 billion. Heretofore, Soviet successes in foreign aid have usually been so breathtaking that they have not only overshadowed the much less dramatic American projects, they have also eclipsed Soviet shortcomings. The coming of age of the program reveals, however, that the Soviets have also had their failures. To their surprise, they have encountered almost all of the problems which have frustrated us, plus some that we have been spared.

II

The Russians have a knack for the spectacular. What success they have had in foreign aid has come from concentrating on certain key projects which are often industrial in nature. These major impact projects not only excite the imagination but often have productive and visible results. The workmanship and administrative efficiency that go into completing these showpieces are good, indeed often better than are found in the U.S.S.R. itself. The steel plant at Bhilai is one of the largest and most successful in all of the underdeveloped world. The decision to build it came after West Germany and Great Britain had also agreed to build steel mills for India. Resolved to win the competition, the Russians not only shamed the West Germans into offering a lower interest rate, but completed their plan much faster and built their mill more cheaply than either the English or Germans did. Although the German and British plants are technically more complex, most Indians agree that the Soviets have outperformed their competitors.