ABSTRACT
The regional fragmentation of the Soviet state and economy is proceeding at an increasingly rapid rate. The Soviets' economic problems—and the profound transformation under way in the region—have taken an especially heavy toll on Soviet-East European trade. According to official Soviet statistics, state investment in 1990 was 4 percent less than in 1989, reflecting a sharp drop in centrally financed investment that was partly offset by an increase in investment funded by enterprises. Many Soviet industries are dominated by monopoly producers, whose development was actively encouraged by central planners. As a result of the ills afflicting the domestic economy, Soviet foreign economic relations are suffering, and the problems in foreign economic relations in turn are magnifying the domestic economy's problems. The central leadership responded to the accelerating deterioration of the economy with another effort at stabilization—this time called an "action program for leading the economy out of crisis.".
