Coll 28/62 ‘Persia. Soviet commercial penetration in:’ [‎72v] (146/154)

I
distributes them. From start to finish every factor in the cost of production is
absolutely controlled by a gigantic organisation that is a law unto itself, and for
whom, so long as the object in view be achieved, the immediate commercial loss
involved is of little importance. Such competition is backed by the combined and
co-ordinate resources of the whole State. Against it the individualistic and
disunited trade organisations of the capitalist State cannot hope to compete. /—s
It has been said, by way of consolation, that the strength of Russian
competition in South Persia is based on artificial factors which cannot be
indefinitely maintained. With their removal, orthodox trade will be quick to
recover lost ground. This view may have had much to support it in the earlier
days of the attack, when there seemed every reason to suppose that Russian goods
were being dumped in Southern Persia and sold regardless of the loss involved.
At the present time their methods have assumed a far more normal business
/ispect, and, in view of the concrete advantages afforded them over all
competition by the 1931 Trade Agreement, there seems every prospect of their
being able henceforward to hold the position acquired, and to extend it at will,
if not profitably, at least at no very great expense.
The outlook cannot be said to be in the least reassuring. The future of
Soviet foreign trade is presumably largely dependent on the measure of success
attained by the present schemes for the industrialisation of Russia. Perhaps
their achievement may automatically bring about a contraction of Russian exports
of which the underlying cause is the pressing need of the Soviet Government for
the foreign exchange essential to the execution of those schemes, and which, with
their consummation, will presumably automatically cease. Perhaps, also, the
frantic efforts of the Soviet authorities to make of Russia in a few years an
industrially independent unit may utterly break down.
As regards the first alternative, it may at once be said that Russian exports
to Southern Persia, though undoubtedly partaking of the nature of forced
exports, in that textiles and sugar are both commodities of which there is a
famine in Moscow, do not now appear to be contributing, or to be intended to
contribute, to the Soviet Government’s supplies of foreign exchange. Their
} motive may therefore be assumed to be political, and success of the Soviet
industrial "policy, far from resulting in a release of the economic pressure now
exerted, may consequently be expected to result in its intensification and
extension. The menace under such circumstances is no longer confined to British
commercial interests in Persia alone, but becomes a challenge of the first
magnitude to the trade supremacy of Britain in the Gulf as a whole, the under
mining of which may be expected to constitute one of the earliest objectives of a
successfully industrialised Russia.
\ The second alternative would appear rather in the nature of a hope than of a
probability. The first Five-Year Plan may not have achieved the standard set,
but it cannot be said to have failed. In 'spite of two unpremeditated adverse
factors of the first import, namely, the destruction by Russian peasants of
25 per cent, of the country's live-stock in the early days of the plan, and, secondly,
the unprecedented slump of raw material prices on world markets, achievement
has come within measurable distance of the objective. With the help of American
engineers and machinery, Russia is arming herself with industrial weapons of
the first order. Will she be able to use them? Are the huge industrial cities
springing up like mushroom growths all over the country destined to become
derelict monuments testifying to the failure of the greatest social experiment ever
attempted ? Do the leaders of the State possess the ability to evolve in Russia a
new order eventually capable of standing without the support of ruthless force ?
If so, then the prospect of a Russian State possessed of boundless natural
resources, exploiting those resources with the labour potentialities of a rigidly
controlled population of 180 millions, and animated by a fieice fanaticism tor a
social creed such as has formerly characterised only great religious movements,
introduces factors of world-wide significance and limitless possibilities.
But the Russian Colossus has never yet achieved results commensurate with
its size. Will the mountain once more bring forth a mouse ?