The paper examines the economic crisis in the Soviet Union and, in this context, analyses why arms control was so important from the Soviet point of view. It further discusses the organic relationship between disarmament and development and rounds with a case for conversion of Soviet military economy. The ‘administered’ economy of the Soviet Union was in glaring contrast to the ‘market economies of the West. Unlike the Soviet-type command economy, the Western capitalist economy had capital-intensive production, private proprietorship, competition between firms, production for the market and global reach.