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13 Percent Of Soviet Enterprises Ran In Red Last Year

January 24, 1988

MOSCOW (AP) _ More than one Soviet enterprise in eight lost money last year, and the nation’s factories have been slow to innovate, the Communist Party daily Pravda reported Sunday.

The report on the nation’s performance in meeting economic goals set by the party and the government showed many sectors were struggling under sweeping reforms introduced by Soviet leader Mikhail S. Gorbachev.

A ″great number″ of enterprises that were free to negotiate contracts under the economic reforms did not meet commitments they undertook, said the report. It was issued by the State Committee for Statistics and published in Pravda.

Last year about 13 percent of the country’s factories and economic enterprises ran in the red, and economic organizations did not meet goals for high-quality production, the report said.

″On the whole, they failed to capitalize on the advantages of the new mechanism of management,″ the report said. It said supplying factories and enterprises with materials continued to be a ″sore point.″

″Achievements of science and technology are being introduced at slow tempos into the economy,″ the report said.

Gorbachev has sought to make each enterprise balance its expenditures and revenue as a way to improve the quality and quantity of output.

The report said, however, that for the first time in years increases in production could be attributed to higher labor productivity rather than to growth in the number of workers.

Products worth $2.3 billion were of such poor quality or outmoded fashion that no one wanted to buy them, the report said.

Because of continued problems on farms and in the supply network, meat and butter had to be rationed in some places, the report said.

The agricultural sector, which has traditionally been one of the weakest branches of the Soviet economy, reached only 98.8 percent of its 1987 plan target.

The potato crop dropped to 16.9 million metric tons, down from 19 million tons last year and below the 16.4 million ton average in 1981-85.

Under the pressure of Gorbachev’s anti-drinking campaign, the production of alcoholic beverages was reduced by 13 percent compared with 1986, the report said.

On Friday, the Soviet council of ministers said all branches of the economy had met their targets for improving labor productivity in 1987, but said it was too early to consider the country’s economic changes as permanent.

The ministers, who serve as the Soviet Cabinet, gave directives to key sectors such as machine-building, chemical and timber, construction, transport and agricultural industries for improving their performance.

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