percent, to approximately US$35 billion (Shirreff, 1987, p. 46). By 1990, Soviet external debt reached a level of US$53 billion a further 51.4 percent over the three year time period.
A net external debt of US$53 billion was not a worrisome level for an economy the size of that of the former Soviet Union, nor is it for an economy the size of the Russia of the early 1990s, the country that inherited most of the Soviet foreign debt. The immediate reason for the increase in Soviet foreign debt is the fall in the world crude oil price. In the past, the Soviet Union had derived approximately 80 percent of its hard currency earnings from crude oil sales. The crude oil price decline reduced Soviet crude oil earnings by 23 percent. Crude oil prices were a more important cause in the increase in Soviet external debt than was the well publicized economic restructuring perestroika in the country. Perestroika, at
least in the early years of implementation, was not expected to increase the levels of Soviet external debt, as much as
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