<!-- Start of picture text --> Policy Recearch<br>Soclo-Economic Data<br>WPS 1057<br><!-- End of picture text --> This paper- a product of the Socio-Economic Data Division, Intemeational Economics Department is part of a larger effort in the department to facilitate integration of the historically planned economies, including the former Soviet republics, into the global economy. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Estela Zamora, room S7-136, extension 33706 (December 1992, 70 pages).

There is as yet no fully satisfactory way to compare income per capita of the former Soviet Union with that of other economies. Even more problematic is compiling estimates for the separate economies that have emerged with the breakup of the Soviet Union. The main problem is the isolated non-market economy of the country, compounded by the chaotic state of information services.

The results presented here, while subject to considerable uncertainty, are considered reliable enough for their primary purpose: to assign the new states of the Soviet Union to income categories for Bank analydcal and operadonal purposes.

The rrain difficulty was choosing a rubledollar conversion factor that accords reasonably well with the Bank's _Atlas_ method. Official rates cannot be used because they are as artificial and misleading as any other planned price, meaning that they diverge by a large margin from the rate effectively applied to intemational transactions. This study investigated three altemative conversion methods, yielding GNP per capita estimates for the former Soviet Union for 1990 ranging from $2,440 to $3,720.

gave an estimate of $2,870. That figure is somewhat at odds with _Atlas_ estimates for the former Soviet Union and other members of the Council for Mutual Economic Assistance (CMEA), which may reflect the limited applicability of the _Atlas_ methods for historically planned economies. Income per capita is calculated for each of the states of the former Soviet Union and for the other European members of CMEA.

The method developed here relies on a purchasing power parity bridge from planned to market economies. Unlike convendonal use of this measure, the study uses the relationship between purchasing power parity and exchange rates for comparator market economies to suggest an Atlas-type conversion factor. The estimations for the states of the former Soviet Union have a suggested margin of error of plus or minus 10 percent.

Incomplete reports fcr 1991-92 show large declines in real GDP in all countries of the former Soviet Union - as much as 25 percent in some cases. It is unlikely that mechanically extending results to 1992 will yield meaningful results, so this study is just a beginning.

The method judged most reliable (referred to as the synthetic Atlas-type conversion factor) The Policy ResearchWorking PaperSeries disseminates the fmdings of work under way in the Bank. Anobjectiveof the series is to get these findings out quickly, even if presentations are less than fully polished. The findings, interpretations, and conclusions in these papers do not necessarily reprcsent official Bank policy.

Produced by the Policy Research Disseminadon Center