RECENT DEVELOPMENTS IN THE FOREIGN ECONOMIC RELATIONS OF THE SOVIET BLOC

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00935A000300270001-2
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 25
• Document Creation Date: November 9, 2016
• Document Release Date: April 6, 1999
• Sequence Number: 1
• Publication Date: February 3, 1956
• Content Type: IM

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INTELLIGENCE MEMORANDUM
RECENT DEVELOPMENTS IN THE FOREIGN ECONOMIC' RELATIONS
OF THE SOVIET BLOC
CIA/RR IM-420
3 February 1956
THIS MATERIAL CONTAINS INFORMATION AFFECTING THE
NATIONAL DEFENSE OF THE UNITED STATES WITHIN THE
MEANING OF THE~ESPIONAGE LAWS,, TITLE 18g USC9 SECS.
793 AND 794., THE TRANSMISSION OR REVELATION OF
WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS
PROHIBITED. BY LAW.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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CONTENTS
Page
Summary and Conclusions . . . . , .
I.
Introduction . . . . . . . . . . . . .
2
II.
Soviet Economic Development . , . , .
3
III.
IV.
Foreign Trade Trends in the Sino-Soviet Bloc
Character and Magnitude of the Soviet Bloc
6
Credit Program . . . . .
9
V.
Role of the USSR in Directing the Soviet Bloc
Credit Program . , . . . . . . .. . . . . . ,
10
VI.
Recipient Countries Under the Soviet Bloc
Credit Program . . ... .. . . , . .
11
VII.
Economic Capabilities of the Soviet Bloc to Support Its
Credit Program . . . . . . . . . . . . . . .
12
Statistical Tables
Appendix
Tables
15
1. Sino-Soviet Bloc Trade with the Free World,
7 !lr 'l rr
15
2. Sino-Soviet Bloc Trade in Capital Goods with the Free
World., 1953-54 . . . . . . . . . . . . .
3. Credits Extended by the Sino-Soviet Bloc to Non-Bloc
Countries, January 1956 . . . . . . . . . . , ? . 17
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Page
4.
Sino-Soviet Bloc Credits Extended and Thole Under
Serious Consideration to Non-Bloc Countries' 18
January 19156 . . . . . . . . . . . ? .
.Sino-Soviet Bloc Loans to Non-Bloc Countr~es, 19
January 195 -January 1956 ... ... . . . I . . . ... .
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CIA/RR IM-420 S-E-C-R-E-T
(Project 41.1028)
RECENT DEVELOPMENTS IN THE FOREIGN: ECONOMIC RELATIONS
OF THE SOVIET BLOC*
Summary and Conclusions
The Soviet Bloc, as a result of the changing structure of its com-
ponent economies and in order to gain political and strategic advantage,
has recently begun to expand its economic contacts with underdeveloped
countries, to extend long-term capital credit, and to purchase the
exportable surpluses of underdeveloped countries. Because of the rapidly
increasing industrial power of the USSR it has now become possible,
and from an economic point of view advantageous, for the USSR and
other Bloc countries to export some types of capital goods and. desir-
able for them.to import certain raw materials and food products.
As of 1 February 1956 the Soviet Bloc has made offers of credit,
primarily for capital goods, of about US $l billion. Of this total,
acceptances have amounted to about US 600 million, extending over a
period of years. If all of these offers materialize into actual credits,
which are then fully utilized, the commitment of the Bloc will require
less than 1 percent of its industrial production. Thus it is likely
that the countries of the Bloc, without hampering their ?g:ra th or'~1-fulf ill-
ment of plan goals, could expand credit and export programs with under-
developed countries substantially without impairment to their own
economi,es. The economic threat presented to the Free World by the
growing capability of the Bloc to export capital goods and to import
raw materials will continue and become increasingly severe.
* The estimates and conclusions contained in this memorandum represent
the best judgment of ORR as of 1 February 1956.
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I. Introduction.
The statements of high Soviet officials recent months, outlining
a much more vigorous participation by the Sovi t Bloc in the inter-
national economic affairs of the non-Bloc worl4, especially the under-
developed countries of Asia, Africa, and LatiniAmerica, must be ac-
cepted as a basic and reliable declaration of Bloc intentions and an
indication of Bloc economic capabilities to support such a program.
This new orientation has resulted in the formation of a Main Administra-
tion of Economic Relations,, directly subordinate to the Council of
Ministers of the USSR. On a lower level,, new. Organizations have been
formed in the Ministries of Foreign Trade of the USSR and several of.
the European Satellites which deal specifically with the exportation
of complete plant installations and with the p?ovision of technical
assistance.
Liberal credits, technical assistance,: widor participation in trade
fairs, and expansion of trade with underdeveloped countries by the
Soviet Bloc mariz the beginning of a significan!b trend in Bloc inter-
national economic relations with the rest of tae world. The Bloc,
especially the LSSR, will use its expanding but still modest capa-
bility to export capital goods to underdeveloped countries and to
purchase the exxorts of those countries in order to compete with the.
aid programs of the West and to win every possp.ble political,, economic,,
and strategic advantage. Underdeveloped countries must necessarily
regard the Bloc as an active competitor with the West as a source of
capital for their internal economic development.
In his speech before the Supreme Soviet on 29 December 1955,
Khrushchev stated that despite the growing internal needs of the
Soviet economy, s- ... we consider it our duty Ito share with our
friends." With respect to Western economic aid, he noted that "capi-
talist countries have to increase economic aid to underdeveloped
countries" and that further Western aid must b "regarded as indirect
help by the Soviet Union o.. ." The Bloc is thus inviting under-
developed countries not only to participate i the Bloc program of
credit extensior..but also to use Soviet offers as leverage in negotia-
tions with the Vest.
The Soviet Bloc program has two principal aims It is designed
both to neutralize US influence in underdeveloped countries and to
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undermine the Western politicomilitary position in the areas. adjacent
to the Bloc. The shrewd placement of extensions of credit and offers
of credit to neutralist states -- to countries at the periphery of the
Bloc., Yugoslavia and Afghanistan; to Egypt and Syria as well as to
other Middle East states; to Southeast Asia, Burma and India; and to
Latin America indicates the importance which the Bloc attaches to
these goals. In addition, as the following analysis shows the Bloc
can supplement its own resources in a modest but important; way by
exporting capital goods and importing raw materials and food products
from underdeveloped countries. Lesser but not insignificant results
of the Bloc program have been the substantial favorable public reaction
to their moves in underdeveloped countries and the opportunity offered
to publicize the effectiveness of the Communist system by accomplish-
ing rapid industrial and technological development.
II. Soviet Economic Development.
At the time of the Revolution., Russia was predominantly. an agri-
cultural. country; little industry existed, and the industrial plant
was small. When the Communists gained control., the new government
determined, that the country would become a major industrial power.
The USSR has maintained an unusually high rate of investment for a
long period of time, concentrating on the construction of plants and
equipment for heavy industry. Since 1928 the USSR has undergone the
classical process of economic development experienced by the US, the
UK, France., Germany, and other countries, with the time span., however,
greatly reduced by the high rate of investment sustained at consider-
able hardship through enforced low living standards for the people.
In about 30 years the USSR has changed from an agriculturally oriented,
industrially impotent country to the second industrial power in the
world.
Because of the Soviet emphasis on industry, the proportion of gross
national product originating in industry has increased substantially.
In the mid-19304s, industry produced only about 25`,percent of -total
production. By 1955, industry accounted for about 40 percent of total
production. The USSR now produces a wide range of industrial prod-
ucts in large quantities. For example, the Soviet machine tool
industry is producing as much as its counterpart US industry., and the
product is of generally comparable quality. The Sixth Five Year
Plan (1956-60) in the USSR indicates a continued emphasis upon industry.
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During the next, 5 years., industrial productions in the USSR probably
will grow by more than 10 percent per year--l faster than in any other
industrial nation. The relative., though not he absolute., gap in in-
dustrial production between the USSR and the TS is being closed be-
cause of the rapid Soviet growth. I
Although irdustry as a whole has been pus ing ahead rapidly in
the USSR, the extractive industries, especial y agricultural and food
production., have progressed much more slowly ~nd face increasingly
serious resource limitations. The proportionlof total production
originating in extractive industries has declined steadily in the
past three decades. As industrial productionlhas grown larger, it
has become increasingly evident that the USSR is not well endowed
with all the requisite raw materials. Many o
es are lean and produc-
r
tion costs are becoming higher. The USSR is totally lacking in
natural rubber.and industrial diamonds. For .ecades before 1953,
agriculture had been relatively neglected and had received little in-
vestment. Increases in production have not a ways kept pace with
population growth. Obtaining additional agricultural output has now
become very costly, inasmuch as the USSR not only must make up for a
long period of neglect but also must overcome; many natural barriers.,
such as unfavorable climate, limiting topographical characteristics,
and relatively little arable land.
In the past., when the USSR was still primrily an agrarian economy
in process of rapid industrialization., the pattern of Soviet foreign
trade was to export the products of the e:xtra4tive industries., such as
timber and wheat., in order to import capital nods. This pattern
served to enable the USSR to acquire costly capital goods which it
was not equipped to manufacture at the cost of some of the output of
the extractive industries which it did not ye require for its indus-
tries and could deny its population.
The gradually changing structure of the S viet economy is result-
ing in important shifts in the relative costs of producing different
items in the USSR. As the USSR has expanded is plant and equipment
and has gained pore experience in the manufac ure of capital goods.,
costs of production have declined. On the other haAds it is becoming
more costly for the USSR to obtain the output of the mineral and agri-
cultural sectors, as the USSR has already exp 3 cited most of the
low-cost output. The present relative cost psition of the USSR is
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indicated by the,,,ratiq .,9X. ruble -prices to dollar prices for vans
_products} Th.e ruble-dollar ratio ofi capital goods is about 8 or 9
to 1, whereas for raw materials it is about 20 to 1. Food products
have a ruble-dollar ratio of about 11 or 12 to 1. Hence it is now
becoming relatively cheaper for the USSR to produce some types of
capital goods and other finished products and relatively more expen-
sive to extract many of the indigenous resources.
The USSR is now finding that its traditional pattern of foreign
trade .- that is, the export of raw materials and foodstuffs in ex-
change for imports of capital goods -- is disadvantageous. Reflec-
tion of this can be found in the Soviet decision not to import as
much capital goods as it could even under present East-West trade
controls and in the increasing proportion of Soviet imports accounted
for by food products and raw materials. Section III, below, treats
further the development of trends in Soviet Bloc trade with the West.
The USSR not only is capable of exporting a relatively varied line
of capital goods, such as trucks; tractors; agricultural, construc-
tion, and mining machinery; structural shapes; and other capital goods,
but also finds that it is advantageous to do so on economic grounds.
The Soviet economy is obtaining food and industrial raw materials,
such as copper, the domestic production of which requires a greater
expenditure of resources than required for the capital goods which
the USSR is exporting.
Because the shift in relative costs is still in process, the bulk
of the Soviet exports of capital goods probably will be confined to
the simpler types which are relatively easy to manufacture. These ex-
ports have been the very items which.the underdeveloped countries
have especially desired to import -- that is, certain types of trans-
portation equipment, prime movers, machinery for extractive industries,
and basic and standard manufacturing facilities. Furthermore, the
USSR is able to and will export technical assistance. For many years,
Soviet technical and engineering training has been conducted on a
large scale, and the USSR now rivals the leading Western countries
in numbers of engineers and technicians.
The production of food has been a chronic Soviet problem. It can
be expected that the USSR will continue to attempt to supplement its
domestic food supply increasingly with imports, especially from the
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underdeveloped countries. In addition, industrial raw materials can
be used by the USSR to add to its own resources as needed supplies for
its rapidly grotiring industries.
The extension of credit and technical assistance to underdeveloped
countries and the expansion of trade with these areas, instead of im-
posing a burden upon the Soviet economy,__:)robaa ly will result in a
small net economic gain. As the USSR develops its industrial capacity
further, resulting in increased industrial demands for basic resources
and the gradual depletion of these resources, it will become increas-
ingly advantageous for the USSR to export capital goods and to import
industrial raw materials. In addition, as population continues to grow,
it will also become more advantageous for the USSR to import food
products.
.The fact that the USSR is apparently beginning to shift its trade
pattern.-- the came shift from importing capital goods and exporting
raw materials tc exporting capital goods and importing raw materials
previously experienced by other maturing :Lndus{trial economies -- is a
most fortunate historic accident for the USSR. The political and stra-
tegic implications of even a small shift in trade are great, coming at
a time when politically vulnerable, capital-hungry nations need the
kinds of capital, goods which the USSR has the icapability to export and
when the USSR cs.n readily absorb their export ble surpluses. The
probability of political gains, along with economic gains, is a situa-
tion ready-made for the present Soviet leadership to seize upon and
exploit.
1
The policy cf Soviet foreign trade is fregj ently characterized as
a policy which is striving toward autarky, or "'self-sufficiency,"
This long-standing dogma means that the USSR does not intend. to become
inextricably dependent on the rest of the world for the basic supplies
for its economy. The basic dogma continues toll hold, but it will not
prevent the USSF_ from expanding trade or from changing the geographic
direction or commodity composition of trade so long as the changes
do not result in. too great a dependence upon imports.
III. Foreign Trace Trends in the Sino-Soviet Blkc.
The value of trade between the Sino-Soviet'Bloc and the rest of
the world has in the postwar years hovered between US $3 billion and
US $4+ billion a year. The pre-Korean War level probably was attained
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in 1955, inasmuch as preliminary data indicate a volume of trade of
about US $4 billion. Imports and exports over this period each have
constituted no more than about 1 percent of total production.
.The direction of Sino-Soviet Bloc trade has remained, relatively
stable over the postwar years. Trade with Western Europe has repre-
sented about two-thirds of total Bloc trade and remains approximately
cgUstant as a proportion of total trade. .The principal change in the
past 3 years has been the growing relative importance of trade with
Latin America., which.has increased from l.percent to about 7 percent
of the total. Although trade with other areas increased, it has not
expanded so rapidly as total trade. Table 1* shows the geographic
direction of Sino-Soviet Bloc trade between 1953 and 1955-
The most recent developments in Sino-Soviet Bloc economic rela-
tions with underdeveloped areas have not yet been reflected in trade
statistics. Almost{all of the Bloc commitments in.these areas were
not made until the latter half of 1955,, and deliveries in many in-
stances have'not been completed and recorded. The magnitude of the
Bloc credit program; is not yet such that it would loom large in
recent annual trade statistics. Section IV, below, contains details
of the Bloc credit program.
The commodity composition of Sino-Soviet Bloc trade with the rest
of the world has changed significantlylin.recent years. In the early
postwar years the Bloc was a net importer of manufactured goods and a
net exporter of food products. This situation has not been substan-
tially altered. In 1954, for the first time., both the USSR and the
European Satellites becamelnet importers rather than exporters of food
products. At the same time., the European Satellites became het ex-
porters of manufactured goods, and the USSR remained a net importer
of manufactured goods by a relatively slim margin, although it doubled
its exports of manufactured goods between 1952 and 1954.
For capital goods (machinery and transport equipment) the Sino-
Soviet Bloc countries as a group remained net importers by about
US $140 million.in 1954. Bloc exports of these goods were about 50
percent larger in 1954.compared with 1953, whereas Bloc imports re-
ined at the 1953 level. Bloc exports of capital goods to under-
developed countries doubled from 1953 to 1954.
P. 15, below.
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Motor vehic_es; agricultural machinery, including tractors; and
office machinery accounted for more than half of the capital goods
exported by. the Sino-Soviet Bloc in 1954, and in each case Bloc ex-
ports exceeded :.mports by a considerable margin. This was also the
case with metalworking machinery, railroad trelicles, and other trans-
port equipment. The major Bloc imports -- ships and boats and elec-
tric-?a4d power-generating equipment -- together accounted for more than
half the total. Table 2* shows 1953 and 1954Bloc imports and exports
of capital goods;. Data for all of 1955 are nit yet available, but
trade for the f:.rst 6 months and scattered data for the full year sug-
gest that the B_oc is continuing to move towalfd the position of a net
exporter of cap:_tal goods. I
The Sino-So?riet Bloc has both the capability and the opportunity
to increase greatly the margin by which it is{ now a net importer of
capital goods. Although some capital goods items are embargoed to
the Bloc, many -,ypes of machinery and equipment can be obtained by the
Bloc without restriction. Even among the itenis under quota, only vessels
and bearings are currently being purchased by !the Bloc in quantities
close to the quota. For half the items under {quota, the Bloc made no
purchases during the first 9 months of 1955 f+om countries that are
members of the Coordinating Committee (COoM){which regulates exports
to the Sino-Sov:.et Bloc.
The size of current Soviet gold reserves and current gold produc-
tion provides the Sino-Soviet Bloc with the capability to expand greatly
its imports fror:u the West at any time it desiltes. Current gold pro-
duction alone, amounting to about US $175 mil]4ion per year, is sufficient
to have nearly doubled Bloc imports of capital goods from the West in
1954 had the USER so desired.
Sino-Soviet Bloc trade data indicate strogly that the pattern of
trade is in process of change. Trade negotia ions and agreements and
offers and acceptances of credits, especially in 19559 indicate that
trade with underdeveloped countries will increase somewhat as a pro-
portion of Bloc foreign trade. The Bloc has already become a net im-
porter of food and appears to be moving out o4 its present position
as an importer of capital goods. Indications are that these trends
will continue.
P_J_~y below,
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 Character and Magnitude of the Soviet Bloc Credit Program.
The Soviet Bloc credit program encompasses the provision of tech-
ical assistance, the provision of specific items of capital equipment,
nd the building of entire manufacturing plants for underdeveloped
ountries. Bloc offers have been made and accepted on many contracts
or long-term, low-interest credits with payments to be made in local
urgencies or through barter arrangements.
One of the most appealing aspects of the Soviet Bloc credit program
s the favorable payment terms. Bloc credits have interest rates of
to 3 percent -- about half Western rates -- and may be repaid over
xtended periods of time,
The Soviet Bloc generally is prepared to accept in payment the ex-
ortable surpluses of underdeveloped countries unsalable in other mar-
ets at prices satisfactory to the producing country. In Egypt and
urma, the Bloc has arranged to take exportable surpluses of cotton and
ice in exchange for Bloc industrial equipment and the services of Bloc
Total long-term credits extended by the Soviet Bloc to underdeveloped
ountries are estimated to be about US $600 million, 70 percent of
hich has been negotiated by the USSR. Credit extension under serious
consideration amounts to an additional US 400 million, making a total
credit of approximately US $1 billion which the Bloc is prepared to
advanced It must be remembered that these credit agreements calif or
deliveries over a period of several years and payment over many more
years. Tables 3 and )* indicate the magnitude and distribution of
Bloc credits.
As a part.of its over-all program the Soviet Bloc has exported
arms to Egypt and.Afghanistan and has offered arms to Syria and Saudi
Arabia as well as to several Latin American countries. The Bloc has
a ,considerable export potential in arms because of its substantial
stocks of military hard goods which are approaching the obsolescent
stage for its own forces but which are quite adequate for Middle
Eastern and Latin American needs.- In view of the increased attention
being devoted to the advancement of their foreign credit program by
high Soviet-officials as well as by Bloc commercial and technical
Pp, 17 and 18, respectively, below.
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representatives abroad, a significant expansion of Bloc credits to
non-Bloc count:^ies may be anticipated.
V. Role of th,a USSR in Directing the Soviet Bloc Credit Program.
The USSR has assumed the central role inlestablishing the frame-
work within wh:lch the Soviet Bloc credit pro~ram operates. Primary
responsibility for the Bloc credit program ir. the Middle East and
Indonesia seem; to have been placed with the European Satellites,
whereas the USSR has been cast in the do.mina t role in Afghanistan,
India, Burma., and Yugoslavia. The foregoing jurisdictions have been
by no means exclusive. Furthermore, the barer arrangements under
which a significant proportion of the Eg;ypti n cotton and rice sur-
pluses were qu.ckly purchased by Communist China, Poland., Czecho-
slovakia., East Germany, Hungary., and the USSF bear evidence of co-
ordinated effort. On the whole, Communist CY inaes role has been
ancillary.
In addition/to encouraging the other Soviet Bloc countries to
develop their cwn credit programs, the USSR has used them as inter-
mediaries in slecial cases. An example of this is the Czechoslovak
sale of Bloc arms to Egypt.
The pre-World War II commercial experience and contacts of the
European Satellites make them ideally suited to act as the Soviet
Bloc's entering wedge in promoting trade in t.e Middle East. Fur-
thermore, an increase in Middle East demands or certain categories
of capital goods produced in the European Satellites appears to co-
incide with a decrease in Soviet demand for 41em. In addition to
the economic considerations involved., the: est blishment of trade
missions may serve as an intermediate step insecuring diplomatic
recognition for East Germany and Communist Ch~na.
The degree )f geographic division of labor established between
the USSR and th~: European Satellites tends to'maximize Soviet control
of the Bloc credit and trade expansion effort in. areas contiguous to
the USSR and to minimize direct Soviet involv4ment in the explosive
Middle East pol:?tical situation.
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VI. Recipient Countries Under the Soviet Bloc Credit Program.
Yugoslavia has been the principal recipient under the Soviet Bloc
credit program, accounting for one-third of all credit extended by
the Soviet Bloc and for nearly one-half of that provided by the USSR.
Other important recipient countries have been Afghanistan and India.,
each receiving about one-quarter of Soviet credits.
Egypt ranks second to Yugoslavia., receiving one-quarter of all
credits extended by the Soviet Bloc but none from the USSR. Tables 3
and 1i* show the composition.of Bloc credits, by country. Table 5**
gives a breakdown of Bloc credits by country of origin and by recip-
ient countries in terms of particular projects and of exports of
capital goods.
Underdeveloped countries undoubtedly regard the Soviet Bloc as a
source of capital actively competing with the Free World for the op-
portunity to assist in their internal economic development. Economic
conditions in a number of these countries are very favorable for the
type of program being offered by the Bloc, Not only do these countries
need large quantities of the types of capital goods and :plant facili-
ties being offered by the Bloc but also they are able to sell to the
Bloc commodities which other ; countries will not buy.
In addition, the provision by the Soviet Bloc of capital goods and
plant facilities may have a substantial impact on underdeveloped coun-
tries., increasing their capacity and output of particular products by
ignificant amounts. Thus it is not surprising that the offer of such
oods, coupled with favorable credit terms, has been accepted by these
underdeveloped countries. The uncertainty of Free World markets for
ome of the commodities exported by the underdeveloped areas is an im-
ortant factor favorable to Bloc activities in these areas.
The majority of the recipient countries appear to be aware., in vary-
ng.degrees, of the serious consequences of becoming dependent on trade
with the Soviet Bloc. There is a realization that the Bloc is not al-
ways a reliable trading partner, that it is susceptible to political.
Pp. 17 and 18, respectively, below.
P. 19, below.
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motivation, and that it might withdraw trade unexpectedly because of
political reasor.s or because of internal economic problems. Imports
of Bloc capital goods and technical assistance; place a part of the
recipient country's industrial base on Soviet' .tandards, which may
well result in E. dependence on Bloc willingness to supply replacement
parts. Although there is a danger of Soviet ijnfluence, and possibly
of Soviet dominance, the short-run gains appear to the recipient coun-
tries to be sufficient to outweigh the economiJc and political dangers
involved.
VII. Economic Capabilities of the Soviet Bloc t}o Support
Its Credit Program.
The credit program of the Soviet Bloc will. not impose a net eco-
nomic: burden, upon the Bloc economies. The economic gain is slight but
will increase over a period of time. Even iflthere were no return to
the Bloc for the credits granted, the program as it has developed so
far would not impose a serious economic burde upon the Bloc economies.
Credit offers o.' about US $1 billion amount td about 1 percent of
annual industrial production in the Bloc. Iflall of these offers
materialize int) actual credits, which are th~fn fully utilized, the
projects undertaken will require up to 5 year to complete.
The Soviet Sixth Five Year Plan,-with itsicontinued emphasis on
heavy industry, will provide the USSR with a owing stock of plant
and equipment. The larger capital stock.will f provide the base
with which the JSSR can continue to increase Its exports of capital
goods 6
The credit program does imply that those capital resources ex-
ported to underdeveloped countries will not b6 available for capital
expansion domestically. The construction in India during 1956-59
of a steel mill with a capacity, of 1 million netric tons means that
the USSR must forego resources which represen, about 6 percent of
Soviet steel expansion during that period. The export of other plants,
such as electric power stations, cement plant., sugar factories, and
other facilities detracts from the irrmed. -ate 4bility to use these
facilities in the Bloc. Bloc exports represe.t, however, the capability
to produce only a minute fraction of what thelBloc produces annually
for all the items exported. The magnitude ofi the program indicates
that the impact, on immediate growth in the Blloc will be very small and
will not inhibit the fulfillment of plan goal~s
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 Approve
d For Release 1999/09/21 : CIA-RDP79T00935A000300270001-2
S -E-C -R-E-T
In addition, it must be remembered that in return for exports of
capital goods the Soviet Bloc is obtaining food products and industrial
raw materials for the production of which it would otherwise have had
to use indigenous resources. Hence the general impact upon the Bloc
will be to foster economic growth, if only slightly, and to enable the
Bloc to use its resources in a more advantageous fashion.
In view of the magnitude of the total trade of the Soviet Bloc
with the rest of the world, its present activities in underdeveloped
countries, and the size and present stage of development of its econo-
mies, long-term credits can be expanded considerably and trade with
underdeveloped countries can be enlarged substantially without impair-
merit to the Bloc economies.
13
Approved For Release 1999/09/21 : CIA-RDP79T00935A000300270001-2
 Approve
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 Approved For Release 1999/09/21 : CIA-RDP79Tt00935A000300270001-2
Sino-?Soviii t Bloc Trade in Capital Goods
1953-54
Comm.odtt i.es
with the Free World
-- 1921
Impor. is o
Thou;3and tJS,
mp Nuor-ts
d e
ui
ment
hi
164,745
41
!476
146,128
57,989
q
p
nery an
Mac
Metalworking machinery.
6,319
3
180
4,857
7,956
Electric and rower generating
e q-i.ipment
77,935
81
?104
6%710
a.2,718
Agricultural u achinery
(including tractors)
9:L2
9
1 064
2,009
11,896
nEry
Office machi
2,544
41
,446
363
9,923
.
General industrial equipment
77,035
163
,682
69,189
15,496
t
557
65
24
670
85,102
36,568
Transport equipmen
,
vehicles
Railroad
3,015
2
,708
1,403
6,421
.
Motor vehicleks
4,170
20
,34
4,792
27,937
Ships and. boats
57,877
4
77,967
Other transpoit equipment
495
1
,601
94Ci
2,210
Unspecified machinery
1
416
14 1. 5 .7_
263
and transport equipment
,
2 1 18 6 255 2 94
- 16
Approved For Release 1999/09/21 : CIA-RDP791t00935A000300270001-2
 Approve
Table 3
Credits Extended by the Sino-Soviet Bloc to Non-Bloc Countries
January 1956
Recipient Areas
Egypt
Iran
Syria
Turkey
147 147
8 3
3 3
161 161
Afghanistan 107 5 112
India 101 4 105
Indonesia 18 18
Finland 20
Yugoslavia 204
Total
Europe
Total 224
Grand total 432
188
- 17
Bloc
USSR Excluding _USSR Total Bloc
SR
20
204
224
620
Approved For Release 1999/09/21 : CIA-RDP79T00935A000300270001-2
 Approved For Release 1999/09/21 : CIA-RDP79Tt00935A000300270001-2
S-E-C-R-E-T
Table 4
Sino.-Soviet Blo3 Credits Extended and Thcse der Serious Consideration
to Non-Bloc Countrie
January 1956
Million U
s
A
l
USSR ExcJ
loc
.ing USSR:.
LTot,a Bloc
rea
ent
Reci
47
347
Egy:t
Lebanon
3
3
Iran
3.
3
Saudi Arabia
5
5
Sudan
3
3
Syria
100
74
174
Turkey
.6
3
9
Afghanistan
107
15
122
India
131
4
135
Indonesia
24
24
281
Total
Europe
Finland
20
20
Yugoslavia
204
2.04
224
224
768
281 l
- 18 -
S-E-C-R-E-T
Approved For Release 1999/09/21 : CIA-RDP79 100935A000300270001-2
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Approved For Release 1999/09/21 : CIA-RDP79T00935A000300270001-2