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Abstract:
In the years following the 1973–1974 oil embargo, the international trading behavior of the East European members of the Council for Mutual Economic Assistance (CMEA) diverged more and more from that of the Soviet Union, especially in trade with the less-developed countries. This trend reflects not only different political, economic, and legal perspectives on relations between industrialized societies in the Third World, but also individual national efforts to gain practical advantage in an increasingly competitive world market. The present article reviews one American monograph, three Soviet monographs, and three edited volumes multinationally produced with East European participation (including one in French) that address these themes.
Suggested citation for this webpage:
Robert M. Cutler, “Economic Issues in East–South Relations,” Problems of Communism 33, no. 4 (July–August 1984): 73–80; available at <http://www.robertcutler.org/download/html/ar84poc.html>, accessed 16 December 2024.
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THE MEMBERS of the Council for Mutual Economic Assistance (CMEA) are playing an ever larger role in the global economy. The complexity of their economic relations with the developing countries in particular is increasing. But the international trading behavior of the Council’s six East European members over the past decade has diverged more and more from that of the USSR, reflecting quite different perspectives on West–South.[1] relations and on the world market. This essay analyzes those differing approaches to economic relations with the less–developed countries (LDCs)[2] from the standpoint of international political economy. Drawing on international law as well as politics and economics, this study also examines how East–South trade affects traditional Marxist–Leninist images of international affairs.
Although East–South trade constitutes only about 2 percent of total world trader it is quite important to the East European countries—more important, in fact than it is to the developing countries. For example, whereas in 1982 the import and export shares of East–South trade in all international commerce of CMEA countries were 13.2 and 13.8 percent, respectively, for the LDC, East–South trade in 1981 composed only 2.5 percent of imports and 5.3 percent of exports. The developing countries’ participation in overall East–bloc trade rose strikingly
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throughout the 1970s. In the case of Romania, for example, exports to developing countries jumped from 9.6 to 28.1 Percent of the country’s total foreign trade between 1970 and 1981.
Far too much of the research on this subject consists of descriptive analyses either of trade ties between LDCs as a single unit and individual CMEA members, or of trade and aid ties between CMEA members taken together and selected developing countries. However, most of the books reviewed here offer other perspectives, treating CMEA–LDC relations from the standpoints of international economics, law, and politics. Such perspectives surpass the usual scope of English–language analyses, which focus on military trade and aid from the CMEA countries to the LDCs;[3] they also shed light on recent developments in East–South trade and provide insights not obtainable from purely political or geostrategic approaches.
Aside from selected chapters in the books edited by Ervin Laszlo and Joel Kurtzman and by Christopher Saunders, only Michael Radu’s book devotes considerable attention to the economic relations of individual CMEA members with the Third World. In his introduction, Radu focuses on economic relations through a geopolitical lens, offering a four-fold classification of “Southern” countries and a six-fold classification of “Eastern” ones. This is a legitimate enterprise, but the lens is clouded with jargon. None of the contributors to the book makes use of these typologies, not even Radu himself in his inconclusive chapter on Romanian relations with the Third World (pp. 235–72). Still less enlightening are the chapters on Yugoslavia and Albania. And Radu is not the only contributor who includes in his chapter tables that he does not refer to in the text.
Perhaps it is no coincidence that the quality of the analysis is roughly proportional to the degree to which economic considerations are integrated into strategic analysis. A case in point is Michael Sodaro’s solid and well-written survey of the German Democratic Republic’s (GDR) relations with the Third World. Sodaro considers trade and aid within a general framework that subsumes GDR–LDC economic relations under the broader question of the country’s role in Soviet strategy. His conclusion on this point bears noting:
The GDR’s activities in the Third World may be viewed as fulfilling four functions: (1) assisting the Soviet Union’s efforts to influence various Third World states or liberation movements; (2) providing the GDR with necessary import goods and export markets; (3) enhancing the international visibility and prestige of the GDR, a goal which assumes special significance in view of East Germany’s continuing rivalry with the Federal Republic; and (4) bolstering the internal legitimacy of the GDR. (p. 134)
STILL MORE demonstrative of the virtue of incorporating economic factors into political analysis is Vratislav Pechota’s excellent chapter on Czechoslovakia. Pechota, who in 1966 chaired the Sixth (Legal) Committee of the United Nations General Assembly, makes good use of his background as an expert in international law and international organization. He judiciously traces the trends in Czechoslovak foreign trade over the last three decades and convincingly demonstrates the crippling effect the 1968 Soviet invasion had on Czechoslovakia’s capacity to undertake initiatives to ameliorate its foreign trade situation. Pechota also discusses the influence of legal aspects of commerce on Czechoslovakia’s economic interaction with the Third World, particularly that involving technology transfer and joint stock companies. His chapter clearly illustrates how the fields of law and economics can make valuable contributions to the discussion of political relations between developing and socialist countries.
The concluding chapters in the Radu book, by Roger Kanet and by Janos Radvanyi, discuss economic relations not between the Third World and individual CMEA members, but between the Third World and the CMEA countries taken together. Kanet’s chapter is particularly rich and synthetic, demonstrating a breadth unfortunately absent in much other work on the subject. The author rightly concludes that most East European states see the Third World as more important for stabilizing and strengthening their own national economies than for anything else; that they nevertheless continue to
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provide costly military and other support to Third World revolutionary movements and regimes backed by the Soviet Union; and that there is no contradiction in this approach since military-political support can lead to increased economic relations in the future (p. 325).
Radvanyi provides an overview of patterns in the evolution over three decades of collective socialist foreign economic policy that tends to support Kanet’s conclusions. He notes that individual CMEA members pursue “the search for new markets and commercial gains” (p. 343) in different ways and to different degrees. For example, Hungary prefers to use hard currency in its trade with LDCs, conducting nearly two–thirds of its Third World commerce this way. Other East European countries show this preference, though to lesser degrees. The USSR’s heavy reliance on barter is an exception. Of course, countries that conduct trade with the Third World in hard currency can use any resulting trade surplus to help offset deficits in East–West trade. Although the amount of surplus varied from country to country, in 1982 the six East European members of CMEA together realized a surplus in their Third World trade equal to 72 percent of their deficit in trade with the West.
Jean Diambou focuses on the LDC side of this issue. His analysis of the financial arrangements available to the developing countries for settling accounts in international trade with the CMEA countries (in the volume edited by Marie Lavigne, pp. 119–32) touches on LDC use of multilateral devices to diversify payments,[4] but he does not mention the transferable-ruble system, the multilateralization of which has long been debated within CMEA. However, the transferable-ruble system has not lent itself to such operations in practice. Indeed, while the transferable ruble may become more convertible into hard currencies through broader utilization,[5] the LDCs might reserve it for trade with the East European countries, and conserve their fully convertible currencies (as the socialist countries themselves now do) for purchasing Western technology and amortizing debts to Western banks. Because the transferable-ruble system as now constituted favors the USSR, Moscow is quite conservative on the issue of multilateralization. But it is no secret that certain smaller CMEA members would prefer to see the transferable ruble multilateralized.
THE DIFFERENTIATION of the foreign trade patterns of the smaller CMEA countries from that of the Soviet Union reflects the evolution of diverse perspectives on global trade generally and on Eastern Europe’s role in the world economy in particular. These perspectives arise from differing schools of thought on how to deal with the Third World, and they animate discussion not only in the smaller CMEA countries but in the USSR as well. Principal among these different schools are the ones delineated by Elizabeth Valkenier in her excellent examination of Soviet perspectives on the world economy. Indeed, the most intriguing parts of her study are those where she treats the influence of East European thinking on Soviet views (pp. 59–62, 127–35), the evolution of Soviet views over the last 10 years (pp. 52–59, 62–69, 81 –97, 111 –21, 147–50), and current Soviet policy concerning particular Third World development issues (pp. 97–103, 122–27, 135–43. Valkenier, who demonstrates an impressive depth and breadth of knowledge of the Soviet literature, shows how Soviet views of the world economy have changed in response to economic realities, forcing the USSR to recognize the impossibility of exercising decisive leverage over the developing countries.
Valkenier distinguishes three groups among Soviet decision-makers and political economists: ideologues, skeptical realists, and globalists. Ideologues, she contends, still believe that Soviet interests are best served by manipulating Third World resentments against the West. Skeptical realists make a different argument. They contend that the Soviet Union should base its policy more on cost-benefit analysis than on ideological precepts, since LDCs tend to act independently according to their perceived self-interests. Finally, the globalists argue against using the developing countries’ problems as a lever for tilting the world correlation forces in the
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USSR’s favor; they assert instead the need for broad cooperation among all advanced countries to help solve those problems—overpopulation, food shortages, backwardness—that would otherwise create unrest in the LDCs (pp. 148–49).
Valkenier distinguishes between “globalist” and “bifurcated” approaches in Soviet analyses of the world market. Advocates of the latter approach, in conformity with traditional Marxist-Leninist analysis, maintain that capitalist and socialist world markets exist independently and simultaneously side by side; the globalists assert that these markets are integrated. Valkenier also discusses schools of analysis in the Soviet Union regarding West–South relations. Participants in this debate are proponents either of the “economic liberation” (i.e., from neocolonialism) approach or of the “interdependence” (i.e., of advanced capitalist and less-developed countries) approach.
TO VALKENIER’S three-fold classification we can add a fourth school of thought that seems to be emerging in the most recent Soviet literature on the Third World. E. Ye. Obminskiy’s monograph is an example of it. This school of thought continues to see Western exploitation, and the Third World’s reaction to it, as the dominant development pattern among LDC. Because this school urges opposition to such “neocolonialism” while recognizing nonetheless the complexity of current international trade patterns, it is convenient to call its adherents “hortatory pragmatists.”[6] (See the typology in Figure 1.)
In her analysis, Valkenier classifies an earlier book of Obminskiy’s, published in 1974, as globalist; and in fact it is.[7] But Obminskiy’s more recent book re-
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viewed here, demonstrates how the constraint of ideology may rigidlify the globalist viewpoint. The impact of such a constraint can be seen in the author’s insistence on associating the economic program of the Group of 77 with the political program of the Nonaligned Movement. Thus, Obminskiy attributes the growth of the influence of the Group of 77 partly to its relations with the latter movement. Discussing various ongoing negotiations at the United Nations Conference on Trade and Development (UNCTAD) and summarizing the issues underlying them, he offers an ambivalent evaluation of the LDC program of “collective self-reliance.” This the author interprets as comprising chiefly the UNCTAD-sponsored work on economic and technical cooperation among developing countries. Obminskiy ignores the constructive efforts of the developing countries’ regional organizations to establish inter-LDC cooperation. Instead, he deplores at length the effects of the “exacerbation of the world capitalist economic crisis” on the Group of 77.
The emergence of the hortatory-pragmatist school seems to have
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paralleled a shift in the locus of decision–making in the international commerce bureaucracy in the Soviet Union. Indeed, in recent years the work of the various Soviet ministries involved in such activity has been increasingly supervised by the State Committee for Foreign Economic Relations and the State Committee for Science and Technology. This has reduced the ministries relative autonomy in foreign trade decision-making and insinuated into Soviet foreign trade planning a conservative tendency that complements the hortatory-pragmatist school. For example, when Oleg Bogomolov, director of the Economics of the World Socialist System Institute in Moscow, had the opportunity to specify the nature of Soviet participation in realizing the New International Economic Order (NIEO), he offered only the prospect of intensifying existing East–South economic relations, not that of transforming them. In particular, he envisioned continuing East–South economic cooperation in mineral prospecting, extracting and processing raw materials, industrial construction, and activities that would increase CMEA imports of labor-intensive manufactures and products of LDC national industries (see the collection edited by Christopher Saunders, pp. 246–56, esp. p. 254). These are typical features of the division of labor between North and South.
ONE OF THE most striking aspects of the evolution of East–South trade over the last 10 years is the CMEA countries’ failure to establish strong commercial relations with the newly industrializing countries (NICs). As a result, imports by CMEA countries of manufactured goods from the Third World actually decreased in the 1970’s. During this decade as well, the NICs were rapidly becoming the most dynamic manufactures market in the South. This was probably what Hungarian economist Tamás Szentes had in mind in his discussion of the question that Bogomolov shunted aside, namely, how new forms of technical cooperation might help not just quantitatively to redistribute economic goods along existing patterns, but instead qualitatively to restructure economic relations in general and the international division of labor in particular. Szentes, a true globalist according to the typology in Figure 1, suggests, for example, that imports of primary products from LDCs could be linked with the development of those countries’ manufacturing industries: the importing country could export appropriate machinery to the LDCs concerned, and then progressively increase its proportion of imports of finished or semi-finished products, as against raw materials, from that sector (Saunders, pp. 303–08).
Hungary’s trade with the developing countries is not only more varied and wide-ranging than that of any other CMEA member, but also more important to the country itself. Mihaly Simai’s chapter in the book edited by Ervin Laszlo and Joel Kurtzman (pp. 64–83) mentions both the use of convertible currencies and the innovative incentive structure for encouraging foreign trade at the enterprise level.[8] These have enabled Hungary to engage in cooperation agreements with Western firms to construct “turnkey” plants[9] in developing countries or to engage in joint ventures there. In the late 1970s, Csepel (Hungary) agreed with Volvo (Sweden) on the establishment of joint ventures in the automotive industry; Chemokomplex (Hungary) with Vereinigte Edelstahlwerke (Austria) on turnkey plants; Babolina Agricultural Combinate (Hungary) with Protinas (West Gemany) on turnkey farms and agricultural equipment; and so forth.
OF COURSE, Hungary is not the only CMEA country to engage in tripartite cooperation. Indeed, every CMEA country has taken advantage of this new practice. Thus, CMEA members’ growing reliance on transfer of technology to encourage foreign trade has increased the centrality of this issue in East–South trade relations. A comparative analysis of East–South and West–South technological transfer could help to clarify the future role of the CMEA countries in the emerging international economic order.
It would also be important to determine how successful recipient countries have been in controlling the social and economic effects of technologies transferred to them.[10] Carefully framed research on this question could even touch on whether Eastern and Western technologies are ideology-free or
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whether they in fact motivate different social and economic changes in the recipient country. But research on the more general problem would certainly help clarify how various centrally planned economies may contribute to the development of the global economy, illuminating, in turn, the nature of their participation in it.[11]
Specialists in the CMEA countries disagree on what the nature of that participation should be. A particularly instructive contrast on the subject is offered in the Saunders volume. Marian Paszynski (Foreign Trade Research Institute, Warsaw) and István Dobozi and András Inotai (Institute for World Economics, Budapest) differ over the basic role of foreign trade in socialist planning. For Paszynski, “the main function of exports in a socialist economy is not to provide for the most effective resource allocation and to optimize capacity but to secure revenue to cover indispensable import requirements” (p. 39). For Dobozi and Inotai, however, the merging of the CMEA countries “into the international division of labor [is] an essential precondition for the improvement of their economies’ efficiency and viability” (p. 49). Both these perspectives are “interdependentist” in Valkenier’s terms, but Paszynski appears locked in a bifurcationist approach to the world market, whereas Dobozi and Inotai emerge as globalists.
Such nuances of difference among the CMEA countries’ approaches to issues of the strategies for Third World development are analyzed by Barbara Despiney. She also outlines the guarded responses of the CMEA countries to a series of demands made to them by the Group of 77 at UNCTAD (in Lavigne, pp. 116–17).[12] In the same book, Jocelyne Decaye (pp. 133–52) points up differences of interest between countries in the East and South, notably the increasing competition between these two parts of the world for Western markets for their manufactured goods.[13] It is precisely in conditions of such increasing competition that the differences among national commercial policies of the individual CMEA countries become especially significant.
This East–South competition is becoming particularly acute in labor-intensive manufactured goods and material-intensive semimanufactured products. Additional areas of competition include attempts to entice foreign firms (mainly Western transnationals) to invest in local manufacturing for export, and to attract Western capital. Tripartite industrial cooperation (TIC) constitutes an innovative possibility for surmounting some of this conflict. Patrick Gutman, who is probably the world’s leading authority on TIC, defines that phenomenon as “the joint construction by Eastern Europe and the West of industrial complexes in … Third World countries” (Saunders, p. 337). According to Soviet specialist Leon Zevin (Economics of the World Socialist System Institute in Moscow), TIC offers LDC three advantages: it is coordinated by the developing country; it enables the developing country to overcome excessive reliance on the West for economic development; and it helps to oppose “the self-seeking activities of the transnational corporations” (Saunders, p. 301). However, Gutman’s empirical study of TIC involving French companies suggests that in reality these advantages may not be realized:
It seems necessary to distinguish between the merits of TIC as a particularly appropriate means of international industrial marketing for the Eastern and Western partners and its real value for the development of third countries. In this respect current studies of TIC generally tend to treat it as an autonomous phenomenon, … [but] TIC is at the same time a manifestation of the dynamics of the system—both East and West—and consequently one factor in the interplay of their competition and perpetuation. (p. 349)
Indeed, Gutman’s analysis shows that in “France–East–South” TlCs between 1965 and 1975, third-country firms did not even participate in the construction of two-thirds of the projects. Moreover, “the average share of the South in the work is less than 10 percent of the global value of the projects” (p. 343).[14]
THE GROWTH of East–South cooperation, with or without the West’s participation, is hampered by the absence of adequate institutional machinery. For example, technol-
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ogy transfer from the socialist countries of Eastern Europe to the developing countries occurs within the framework of bilateral intergovernmental agreements or joint ventures. However, despite increasingly frequent exchanges of trade delegations, contacts between ministries and enterprises in the respective countries have not been regularized. Here again one encounters the question of trade instruments, including means of payment. Polish economists Jerzy Klerr and Lech Zacher suggest that the creation of a regional CMEA institution might help to surmount obstacles to the broader use of the transferable ruble by protecting its members’ national economies from possible domestic effects of multilateralization. They contend that “quasi-supranational socialist enterprises … [which] would not be directly and continuously connected with the domestic economic plan” could facilitate East–South technology transfer through arrangements whereby LDCs use Soviet industrial techniques to manufacture products for export to the East European countries (in Laszlo/Kurtzman, p. 26). Not only could such a mechanism increase the level of East–South trade; it could also help to rectify chronic imbalances in payments between the USSR and other CMEA members. But under international law the status of such “quasi-supranational” enterprises would have to be defined; at present, even joint ventures involving two CMEA members in a third country are established under one of the national systems of law.[15]
Legal aspects of the CMEA countries’ foreign economic activities have by and large been overlooked by Western scholars.[16] This is so because legal forms and formalities frequently seem removed from the actual practice of international affairs. Ye. A. Danilov’s chapter on “the participation of non–CMEA countries in the Council’s work as observers” (pp. 91–123) typifies this disjunction. After giving a general account of what observer status in international organizations means in light of the 1969 Vienna Convention on the Law of Treaties, he then asserts that the Convention does not regulate CMEA, since the, latter “is not an international organization of the universal type in the sense of the [Convention]” (p. 104). He further implies that while CMEA is not covered by treaty law, its practice nevertheless contributes to customary international law.
Danilov’s commentary is entirely uninteresting, but his argument has significant implications.[17] He argues that CMEA is not subject to the international law generally governing international organizations, because it lacks full juridical personality.[18] This position tends to limit the law applicable to CMEA to interstate treaty law, with the result that its member-states tend to become responsible for the organization’s obligations.[19] CMEA is then left to enjoy the rights of being an international organization without responsibility for the concomitant duties.
In his discussion of CMEA institutional links with developing countries, Danilov never resolves the issue of bilateral intergovernmental agreements, because CMEA’s executive organs are competent to sign agreements with third parties exclusively when its member-states specifically empower it to do so. This occurs on a case-by-case basis only.[20] However, this issue is addressed in V.D. Popov’s series of essays on economic cooperation between LDCs and different CMEA members. Although the author’s enumeration of the various agreements and projects is rather long (pp. 61–123) and quite unorganized, his specification of diverse types of economic arrangements—and of what those arrangements mean in practice for the terms on which such cooperation proceeds—is very useful.[21]
Popov provides an excellent outline (pp. 8–60) of the framework of international law in which East–South economic relations take
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place, including the relevant structure of international organizations. Legal issues will continue to play a role in the evolution of CMEA cooperation with developing countries, including tripartite industrial cooperation.[22] However, legal problems remain. Either they will be resolved, and East–South cooperation will expand; or the refusal to address such issues (including the payments problem) will further alienate the socialist countries’ international-legal doctrines from the LDC experience with international commerce. This in turn will affect which of the four tendencies in Figure 1 will predominate in the global trading behavior of the various CMEA member countries.[23]
IT IS USEFUL to conclude by asking what research program will encompass questions of international law and economics, as well as politics, within the scope of East–South trade and development relations. Viewing East–South economic relations as one leg of the East–West–South commercial triangle, we may enumerate a series of issue areas within the evolving international economic order. A rough list would have to include development financing, international trade, industrialization and technology transfer, food and natural resources, institutional and organizational policies, and social issues. Each of these areas may serve as a conceptual focus for elaborating an analysis of the prevailing international regime (or competing regimes). The implications of various development approaches (“self-reliance,” “basic needs,” “rural development”) for those regimes could then be specified.[24]
The increasingly scarce and expensive labor force in the CMEA countries, growing East European imports of Third World natural resources and manufactures, the acute debt of the East European countries, and the increased politicization of East–West trade—all these changes must be included in any comprehensive assessment of the CMEA countries’ place in international affairs. The perspective of international political economy is particularly useful in research into trade and aid relations between CMEA and developing countries. It is complemented by the international-law approaches, which provide a necessary point of reference in the study of so rapidly developing and diversifying a domain as East–South interactions.
Profitable insights into such interactions may be gained from examining data on military assistance, financial arrangements for settling debts, and legal doctrines affecting international trade. Political scientists, economists, and international lawyers, respectively, excel at analyzing these issues. But such analysts working together may also learn a great deal about such a significant topic as how Marxism-Leninism as an ideology influences the norms underlying the world trade system or how clashes among the national commercial policies of CMEA members reflect the differentiation of their interests. After all, members of all three disciplines contend that they are concerned with the allocation of scarce resources.
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[Note 1]. In this essay, I follow the standard usage of the terms “West,” “South,” and “East,” which refer respectively to the advanced industrial democracies; to the Third World countries; and to Eastern Europe and the Soviet Union.
[Note 2]. The acronym “DCs,” sometimes used for “developing countries,” is more frequently used to mean “developed countries”; therefore I use “LDCs” in this essay. (The use of “LDCs” to mean “least developed countries”—which in UN parlance are properly called the “least developed developing countries” or “LDDCs”—is likewise confusing and to be avoided. In the context of the United Nations, the LDC’s are sometimes called the “Group of 77” (though they now number over 120), and the East European CMEA countries “Group D.” Both these terms derive from usage in the United Nations Conference on Trade and Development (UNCTAD).
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[Note 3]. Good examples of this approach include Roger F Pajak, “The Effectiveness of Soviet Arms Aid Diplomacy in the Third World,” in Robert H. Donaldson, Ed., The Soviet Union in the Third World: Successes and Failures, Boulder, CO, Westview Press, 1981, pp. 384–408; John D. Copper and Daniel S. Papp, Eds., Communist Nations’ Military Assistance, Boulder, CO, Westview Press, 1983; and Gu Guanfu, “Soviet Aid to the Third World, an Analysis of Its Strategy,” Soviet Studies (Glasgow), January 1983, pp. 71–89. Notable among the relatively new items that take a global–economic perspective are Jürgen Nötzold, “The CMEA States and the North–South Dialogue,” Aussenpolitik (Harnburg), No. 2, 1979, pp. 192–209; Toby Trister Gati, “The Soviet Union and the North–South Dialogue,” Orbis (Philadelphia, PA), Summer 1980, pp. 241–70; Maciej Kostecki, “The USSR Confronts the System of Multilateral Trade,” Revue d’Études Comparatives Est–Ouest (Paris), September 1979, pp. 75–89; Carl H. McMillan, The Political Economy of Tripartite (East–West–South) Cooperation, East–West Commercial Relations Research Report 12, Ottawa, Carleton University, Institute of Soviet and East European Studies, January 1980; and Ruben Berrios, “The Political Economy of East–South Relations,” Journal of Peace Research (Oslo), No. 3, 1980, pp. 239–52.
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[Note 4]. “Multilateralization” of payments refers to balancing accounts with an ensemble of trading partners rather than with any one particular country. For this, a commonly acceptable means of payment is necessary. The transferable ruble is a bilateral device because it is used to settle accounts only between the USSR and other parties. When Moscow is not one of the traders concerned, the device cannot be used to settle accounts, even if the partners involved also trade with the Soviet Union. The discussion of this problem in Sándor Ausch, Theory and Practice of CMEA Cooperation, Budapest, Akadémiai kiadó, 1972, has lost none of its currency.
[Note 5]. See the lucid analysis of the relation between multilateralization and convertibility in Harriet Matejka, “Convertibility in East Europe,” Annales d’études internationales (Geneva), 1974, pp. 175–90; also idem, “Compensation, Convertibility and the Volume of East–West Trade,” in Giuseppe Schiavone, Ed., East–West Relations: Prospects for the 1980s, New York, St. Martin’s Press, 1982. At present the transferable ruble is used only in accounting between the USSR and other CMEA members; it is not used even for settling accounts between, for example, Poland and Hungary. The obstacles to its use as a means for payment between developing countries and East European countries are discussed by Andrzej Bién and Grzegorz Nosiadek, “Improving the Function of the Transferable Ruble as an International Currency,” trans. in Soviet and East European Foreign Trade (White Plains, NY), Summer 1980, pp. 26–47, esp. pp. 28, 33, 44–45.
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[Note 6]. For other recent statements of the hortatory-pragmatist viewpoint, see O. Bogomolov, “CMEA and Global Problems,” International Affairs (Moscow), May 1983, pp. 21–31; Sovremennye mezhdunarodnye otnosheniya i vneshnyaya politika SSSR (Contemporary International Relations and the USSR’s Foreign Policy), Moscow, Mysl′, 1983, pp. 361–74; and SEV: Mezhdunarodnoye znacheniye sotsialisticheskoi integratsii (CMEA: The International Significance of Socialist Integration), Moscow, Mezhdunarodnye otnosheniya, 1979, pp. 254–91.
[Note 7]. Of his Razvivayushchiyesya strany i mezhdunarodnoye razdeleniye truda (The Developing Countries and the International Division of Labor) Valkenier says: “The first book to offer the new [i.e., globalist] interpretation of the international division of labor frankly admitted that the ‘perfect’ system of Soviet–Third World exchanges was not an operative but only a hypothetical situation” (pp. 83–84).
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[Note 8]. Simai draws on the excellent Hungarian contributions to an UNCTAD-sponsored seminar: I. Dobozi et al., “Economic Cooperation Between Hungary and the Developing Countries,” and T. Szentes, “The Development of Economic, Technical, and Scientific Relations Between Hungary and the Developing Countries,” both in I. Dobozi, Ed., Economic Cooperation between Socialist and Developing Countries, Budapest, Hungarian Scientific Council for World Economy, 1978, pp. 87–138 and 139–60 respectively.
[Note 9]. A “turnkey” plant is one that the contractors agree to build and install to the point of readiness for operation, and then turn over to another party for occupancy. Training of personnel is sometimes also part of the turnkey agreement.
[Note 10]. If features of the technology transfer project are treated as independent variables, then economic and social structures in the recipient countries become dependent variables. In this framework, the developing country’s machinery for controlling the effects of technology transfer projects is an intervening variable. Matched–case comparisons of East–South, West–South, and East–West–South (“tripartite”) projects would be appropriate.
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[Note 11]. For a statement of the dominant view, which may now apply more to the Soviet Union than to some of the smaller CMEA members, see Richard Portes, “East, West, and South: The Role of Centrally Planned Economies in the International Economy,” Revue d’Études Comparatives Est–Ouest, September 1979, pp. 31–73. Compare Josef Pajestka and Jan Kulig, “The Socialist Countries of Eastern Europe and the New International Economic Order,” Trade and Development: An UNCTAD Review (Geneva), Spring 1979, pp. 78–81. Further, see UNCTAD, “Legislation and Regulations on Technology Transfer: Empirical Analysis of Their Effects in Selected Countries,” UN Document TD/B/C.6/55, Aug. 28, 1980.
[Note 12]. Compare Robert M. Cutler, “East–South Relations at UNCTAD: Global Political Economy and the CMEA,” International Organization (Cambridge, MA), Winter 1983, pp. 121–42.
[Note 13]. See further Annette Robert, “East–South Competition in the Western European Markets,” in István Dobozi and Péter Mándi, Eds., Emerging Development Patterns: European Contributions, Budapest, Hungarian Academy of Sciences, Research Institute of World Economy, 1983, pp. 467–88.
[Note 14]. Even Leon Zurawicki’s otherwise hopeful projection for TIC in the long run envisions the South’s inability to participate in other than a “residual” manner. See his Multinational Enterprises in the West and East, Alphen aan den Rijn, Sijthoff & Noordhoff, 1979, pp 176–77.
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[Note 15]. CMEA lacks not only financial instruments for reconciling trade balances among countries but also institutions capable of reconciling divergent national aims and interests. For discussions of this, see Ausch, op. cit., pp. 155–90; and UNCTAD, Multilateralization of Payments in Trade between Socialist Countries of Eastern Europe and Developing Countries: Selected Documents, New York, United Nations, 1978 (UN Document TD/B/703).
[Note 16]. See F.J.M. Feldbrugge, “The Untapped Potential in the Study of Soviet and East European Law,” Studies in Comparative Communism (Los Angeles, CA), Winter 1982, pp. 384–90.
[Note 17]. Anita Tirapolsky’s excellent study, “CMEA and Its Privileged Partners of the Third World: Angola, Ethiopia, Mozambique, South Yemen, Afghanistan,” Courrier des pays de l’Est (Paris), June 1983, pp. 3–34, shows that observer status is anything but a halfway-house to full CMEA membership.
[Note 18]. See the Soviet doctrine of the law of international organizations, in the textbook written by the Soviet judge at the International Court of Justice, G.l. Morozov, Mezhdunarodnye organizatsii: Nekotorye voprosy teorii (International Organizations: Some Questions of Theory), 2nd ed., Moscow, Mysl′, 1974, pp. 276–87.
[Note 19]. The 1973 agreement between CMEA and Finland, a developed country, exhibits precisely this feature. See Henryk de Fiumel, “The Council for Mutual Economic Assistance in International Relations,” Studies on International Relations (Warsaw), 1976, pp. 60–78; and W. E. Butler, “COMECON and Third Countries,” Co-existence (GIasgow), April 1981, pp. 41–52.
[Note 20]. Danilov contends that this is in the nature of CMEA as an “interstate” organization that is not “supranational.” His reasoning complements the Soviet claim that the European Economic Community (EEC) is unique as a “supranational” organization and that, being an exception, it cannot form the basis for any rule concerning the law of international organizations. In this he overlooks, as does the whole Soviet doctrine of international law, the actual existence of a body of EEC law that has evolved over time. For further analysis, see Cutler, loc. cit., pp. 137–40.
[Note 21]. Parts of the book read like a handbook for negotiators from CMEA and Third World foreign trade ministries and for project directors in East–South industrial cooperation. The last essay (pp. 124–39) develops mathematical criteria for evaluating different projects of East–South cooperation, particularly enterprise construction.
[ page 80 ]
[Note 22]. See Mezhdunarodnaya nauchnotekhnicheskaya i proizvodstvennaya kooperatsiya: Pravovye aspekty (International Scientific–Technical and Production Cooperation: Legal Aspects), Moscow, Nauka, 1982, pp. 93–108, 285–88; István Dobozi, “Technology Transfer between Developing Countries and Eastern Europe: Mechanisms, Obstacles and Prospects,” In Dobozi and Mándi, Emerging Development Patterns, pp. 441–66; and Peter B. Maggs, “The Legal Structure of Technology Transfer in Eastern Europe,” in Gordon B. Smith, Peter B. Maggs, and George Ginsburgs, Eds., Soviet and East European Law and the Scientific-Technical Revolution, New York, Pergamon Press, 1981, pp. 272–94.
[Note 23]. Those behaviors may differ so much from country to country that East European scholars may find it useful to develop the field of comparative CMEA law, the study of which does not exist at present.
[Note 24]. See the special issue of International Organization, Spring 1982, on international regimes.
Dr. Robert M. Cutler [ website — email ] was educated at MIT and The University of Michigan, where he earned a Ph.D. in Political Science, and has specialized and consulted in the international affairs of Europe, Russia, and Eurasia since the late 1970s. He has held research and teaching positions at major universities in the United States, Canada, France, Switzerland, and Russia, and contributed to leading policy reviews and academic journals as well as the print and electronic mass media in three languages.
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