Investment activity in the Soviet Union is presently undergoing a decline hitherto unknown in the history of the nation: The growth of capital investment has stopped, while levels of production have fallen. One important factor in this phenomenon is the Soviet policy of reindustrialization-shifting new investments into the expansion and improvement of existing facilities-which severely limits capital available for new construction. In this book, Dr. Rumer examines current Soviet investment policies and assesses their impact on economic development, especially in Siberia. Reindustrialization is intended to combine more rapid amortization for updating and retooling, growth in the volume of industrial output, and minimal capital investment. However, concludes Dr. Rumer, this investment pattern hinders the development of Siberia and thus reinforces the spatial polarization of fuel-energy and raw-material resources in the east of the country and the manufacturing industry in the west, with serious consequences for Soviet strategic/military vulnerability and for the Soviet economy.
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