of East Europe's leaders belong to the Brezhnev generation, and there will be several succession crises in the next few years. The Soviets will try to limit the Polish damage and prevent similar outbreaks elsewhere by tightening controls, Korbonski believes. But it will be difficult since conditions sim ilar to Poland's exist in other East European countries. All are suffer ing declining rates of growth, agri cultural production problems, and have huge hard currency debts. A basic feature of current Soviet economic difficulties, Bialer points out, is that in the past the U.S.S.R. possessed "an economy of mobiliza tion," relying on massive inputs of capital, labor, resources, and land to increase production. Now this is no longer possible, and the Soviets must switch from an economy of exten sive development to one of inten sive development—focusing, for instance, on diffusion of technology and increases in productivity. They are totally unprepared to do this, he says. Indeed, productivity has been declining for several years. A central result οι slower Soviet economic growth, explains economist Robert Campbell of Indiana Univer sity, is creation of a conflict over allocation of the more limited re sources among three claimants—con sumer consumption, industrial in vestment, and military development. From the 1950s until recent years, the Soviets were able to maintain significant growth in all three areas. But now they have to choose which to cut back—guns or butter. So far, at least, guns have kept top priority, with military spending continuing its historical rate of a 4% annual increase—absorbing 14 to 16% of all economic output. Invest ment and consumer living standards have been sacrificed. However, Campbell points out, there are tremendous industrial in vestment needs—both for devel opment of new energy and other re sources in Siberia, and for dealing with aging industrial plants, out moded technology, energy-wasting practices, inadequate infrastructure, and transportation and construction bottlenecks. Of investment resources, 16% already is going to development of energy resources, especially for gas development in Siberia, and this will rise to 21% by 1985. Moreover, Bialer adds, there is a new military situation, unprece dented during Soviet transfers of power: The U.S.S.R. has achieved strategic parity with the U.S. and
military superiority in its own re gion. Therefore, in picking new lead ership, there could be for the first time discussion of the priority for military spending, with the possibil ity of cutbacks to release money for consumer needs and industrial invest ment. Imported technology and equip ment have contributed heavily to Soviet industrial development—in cluding the high-priority chemical industry—as shown in a study by the U.S. Census Bureau (C&EN, July 19, page 8). Soviet leaders express concern that reliance on foreign technology creates strong depen dence on the West. They are there fore putting renewed emphasis on their own R&D. However, technology innovation has been a weak link in Soviet in dustrial development. The system lacks incentives for application of research findings to industrial pro duction; indeed it fosters resistance to innovation at the plant level. Therefore, it appears that the Sovi ets will continue to import western
technology and equipment, despite growing hard currency restraints. How will the Soviets go about solv ing all their problems? Bialer and Lapidus think the Soviets may apply more authoritarian social controls. But they rule out any return to the days of Stalinist mass terror. In the economic arena, it is not clear what they will do. But Bialer and Campbell suggest what they need to do to overcome their prob lems: not tinker with the economy, but change the whole system; abol ish rigid central planning and let prices establish their own levels on the basis of costs; allow individual managerial initiative; and apply managerial and worker incentives. These steps have not been taken until now because they would mean a loss of political control. So Bialer doubts they'll be done. After all, he points out, "no government in the world makes decisions on the basis of economic logic." The U.S., too, bases economic policy more on poli tics than economics. Richard Seltzer, Washington
Developing countries key to polyester growth The outlook for textured polyester may be less than exciting in the U.S. and Europe for the rest of this decade, but for developing countries the fiber will have "outstanding growth." That's the encouraging word from a new worldwide study conducted by Chemtex, a New York City-based engineering and construction firm that specializes in the fibers in dustry. Among the reasons for Chemtex's optimism are what it sees as rising world population, with a consequent greater need for food and intensifying pressure to shift arable acreage from cotton production to food crops. That, in turn, will push cotton prices higher, encouraging interfiber com petition and favoring man-made fi bers. And textured polyester will be a prime candidate to come out a winner, Chemtex says. The study predicts that textured polyester will displace spun yarns in end uses where economics and per formance are paramount and esthet ics are unimportant. Such end uses might be pocketing fabrics, table cloths, mattress tickings, bedspreads and blankets, draperies, thermal un derwear, and the relatively untapped areas of lightweight tents, backpacks, and substrates for vinyl fabrics. Western and Japanese chemical companies steadily are abandoning
the commodity fibers business, the study contends, and developing countries, as a result, soon will be the dominant producers. Already there are more polyester-producing plants in developing countries than in the developed countries. Presently, polyester producers are combating a variety of problems that began in the mid-1970s with the ad vent and quick demise of doubleknits as a hot fashion item. When double-knit fabrics took off, many polyester producers began texturing their own filament; independent texturizers, or throwsters, entered the business; and some textile mills in tegrated backwards to texture the partially oriented polyester filament. Then the double-knit market broke, leaving producers with tremendous overcapacity and price competition. In the U.S., polyester filament production is running at only about 70% of capacity, and now only American Enka actually texturizes polyester yarn, since Celanese dropped out earlier this year. Rohm & Haas and Monsanto already had dropped out. The Chemtex study, however, provided one piece of optimism for producers: It predicts there will be a worldwide balance between supply and demand, with operating rates of about 90%, by the mid-1980s. D Aug. 2, 1982 C&EN
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