ALASKA GEARS FOR SOVIET TRADE GAINS

ALASKA GEARS FOR SOVIET TRADE GAINS

Alaska could reap substantial benefits from trade with the Soviet Far East, but it must be patient, a new university study argues.

Trade between Alaska and the Soviet Far East - the Asian part of Siberia - will develop gradually and at first will have relatively modest economic impacts, the study by the University of Alaska in Anchorage said.The long-run potential for Alaska-Soviet Far East trade will depend upon the extent of Soviet reorganization and U.S. relaxation of export restrictions, it said.

The study, titled Alaska-Soviet Far East Trade: Opportunities and Strategies, was prepared by Gunnar Knapp, associate professor of economics at the university, and Elisa Miller, a specialist in Soviet business and trade at the University of Washington's School of Business.

The Soviet Far East officials are ready to do business, Ms. Miller said in a telephone interview Thursday, two days after returning from a two-month research study in Khabarovsk, the economic hub of the Soviet Far East.

The major thrust is housing, where 60 percent of the budget of the Soviet Far East 15-year economic plan will be appropriated, she said.

The factories in Khabarovsk are being modernized and officials there said they want to make that province's products more competitive in the world market.

At the same time, officials in Khabarovsk, which is about the size of California, told Ms. Miller they are improving and developing the agriculture base in the Soviet Far East's southern region, which includes the maritime area of Primoskii and territories along the Amur River.

The Soviets also stressed developing the region's ship repair technologies and forest industry, she said.

Among the Soviet officials she spoke with was Nikolai Bukhantsov, vice chairman of the Primoskii Territories, where the maritime city of Vladivostok is located.

For the first time, Soviet state enterprises are able to keep a good portion of their hard currency earnings for international trade, Ms. Miller said. They're seeking foreign markets for their goods in order to increase hard currency earnings for future importing activities.

Khabarovsk officials are looking at all forms of foreign trade, including barter, joint ventures and joint production, she said.

A State Department official said last week that U.S. officials hope to meet with the Soviets in mid-May, before the summit meeting of President Reagan and Soviet leader Mikhail Gorbachev, to continue negotiations on joint fishing ventures in and management of the Bering Sea.

U.S. companies, especially air cargo carriers, are watching these negotiations and are scrutinizing Alaska's potential as an international hub, a U.S. Commerce Department official in Anchorage said.

We're finding now that several U.S. cargo companies are beginning to target Alaska as a base for their international operations, Robert Poe, director of the Commerce Department's Anchorage Office of International Trade, said in a telephone interview last week.

Some air cargo from Asia and Europe destined for the U.S. mainland comes through Alaska, where aircraft stop for refueling, transshipment or transloading.

Opening direct trade links with the Soviet Far East can boost Alaska's economy, which is suffering from declining oil revenues. This trade also could speed up Alaska's plan to diversify export products.

Alaska's traditional exports are oil and energy-related products, lumber and pulp, furs and fish products.

Some companies, looking to boost tourism in the region, already are gearing up for increased trade between Alaska and the Soviet Far East.

Seattle-based Alaska Airlines has applied for permission to fly twice a week in the summer between Nome, Alaska, and Providenya, a city in the Soviet Far East, starting in 1989, an Alaska Airlines spokesman said.

Nome and Provideniya are about 220 miles apart.

Another airline, Mark Air, has applied for air routes between its base in Anchorage and Provideniya.

Soviet foreign policy spokesman Gennadi Gerasimov told U.S. officials and executives in Anchorage recently that the Soviets are looking to Alaska's arctic technology to develop the Soviet Far East, Mr. Poe said.

Given their interest in housing and forest development, the Soviets will likely import arctic construction technology and products from Alaska, Mr. Knapp said in a telephone interview.

This will include techniques in building structures on permafrost, the frozen grounds in the arctic region, he said.

Mr. Poe agreed with Mr. Knapp's conclusion.

Alaska has huge areas of permafrost, Mr. Poe explained. When you build a structure and install utilities, the heat escaping from the structure melts the ground upon which the foundation is built, resulting in unstable foundation.

Alaska has developed a variety of techniques to successfully build a structure on permafrost without melting the ground, he said.