THE RECENT RECORD IN SOVIET ECONOMIC GROWTH: CHAPTER V EXTERNAL IMPACT OF SOVIET ECONOMIC POWER

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A002600010001-1
• Release Decision: RIPPUB
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• Document Page Count: 131
• Document Creation Date: November 16, 2016
• Document Release Date: January 7, 2000
• Sequence Number: 1
• Content Type: REPORT

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sim Ram= RECORD IN SOVIET ECONOMIC GROWN
CHAP= V
EXTERNAL IMPACT OF SarZET ECONOMIC POWER
STATI NTL
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?
1. Introduction
211BIE OF CONTENTS
IX. Trade as an Ideological Weapon
A. Laying the Foundation
B. Fashioning the Weapon
PINE
1
5
5
9
I. Trade with the Communist Bloc
A. The Institutions of the Socialist World
Market 0 0 ? ? 0 ?
14
14
1.
Insulation of the Domestic Economy .
2.
Foreign Exthange Bale and Bloc Foreign
Trade Prices 9 ? ? OOOOOOOOO
a. Nature of Bloc Trade Pricing
16
Practice ......... ? . ? ?
b. Historical Course of Bloc Trade
16
Prices
18
3.
The Exchange Bate . * ......
19
4.
Non-Commercial Transactlons
B.
Trade with lasterniWirope: Iron the Stick to
the Carrot
29
1.
The Period of the Stick , ..
29
2.
The Period of the Carrot 2 ? ?
32
3.
Economic Assistance ? . . .. 9 9 0 12
34
4.
Wade
36
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C. Trade with China: From the Carrot to the
Stick
39
W.
Trade mith the Free World . . . . . .........
43
A. The Traditional Pattern
43
1. UnclawagingCWeendity Composition of Trade
with Industrial West
43
2. Preference for Predictable Markets 0 i .
.
45
3. Chronic Problems of Finance ... . . . .
.
46
D. The Economic Offensive . ? ? ? ..... . ..
0
48
%able*
1.
2.
Distribution of Soviet Foreign Trade 1950, 1955,
and 1961
Fbreign Exchange Rates for Commercial Transactions
for Currencies of the Soviet Bloc 1954-60 and
1961-62
20
3.
Foreign Exchange Rate for Non.4ommercia1 Transactions
for Currencies of the Soviet Bloc
28
4.
Soviet Economic Credits and Grants Extended to the
European Satellites 1945.4962
35
3.
Soviet Trade with the Europeanfttellites 195541 .
37
6.
sovvit Share in European Satellite Trade 3953, 1935,
3960, and 1965
38
7,
Soviet Trade mith Communist China 1950-1961
41
3.
USSR Trade mith Underdeveloped Countries in 1961 ? ?
55
9.
Economic Credits and grants Ektenkied 1talte USSR to
Underdeveloped Countries, January 3951962.
56
10.
Distribution of Soviet Pbreign Trade in 1961 and Aid
mita Free World Underdeveloped Countries in 1954-62.
57
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pp.ndix Tables
11. Geographic Distribution of Soviet Foreign Trade . . . ? 60
12. CommootttyCiomposition of Soviet Mports, 1955-1961 . . 63.
13. Commodity Composition of Soviet ImPorts, 305-1961 . . 63
14. Commodity Composition of Soviet Exports to European
Satellites, 1955-1961 , 8 ? ? . 65
150 Commodity Composition of Soviet Imports From European
Satellites" 1955-3961 67
16. Commodity Composition of Soviet Exports to COmmunIst
China, 19554961 69
17. Commodity Composition of Soviet Imports from Comenultst
China, A955-1961 71
18. Commodity Composition of Soviet Exports to Industrial
West, 19554961 73
19. CommodityCompcsition of Soviet Imports from Industrial
West, 1955-1961 75
20. Commodity Composition of Soviet Exports to Underdeveloped
Countries, 1955-1961 76
21. Commodity Composition of Soviet Imports from the
Underdeveloped Countries, 19554961 77
22. Trends in FOreign Trade Between the USSR and Selected
Free World Countries, 1955-1961. . 76
Selected Bibliography 79
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CHAPTER IT
External Xinct of Economic Power
betroduction
Upon completion of its post-ear industrial recovery the
ISSSB emerged from the econcadc isolation that bad characterized
its behavior through most of its history and since the mid-1950's
has increasingly participated in the world economy. The con-
tinued emphasis given to economic growth by the Soviet leaders
can be explained in terms of their desire to achieve economic,
mud especially technologic independence of the West. By the
mid-1950's the Soviet were themselve using up-to-date techni-
gees to produce the raw materials, fuel and equipment necessary
for the sectors of industry which they deemed most important.
Since they he. already achieved the basic economic independence
ehich vas the goal of their earlier autarkical policies, they
mere now prepared to shift from an international econaaic
peliay that had been essentially passive and defensive to one
ehich was active and aggressive. Wbereas in the pre war period
they bad imported in order eventually to eliminate the
necessity for imports, in the post ear period they attained
aufficient strength to engage on an inereasiegey large scale in
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trade for political purposes in order to enhance their influence
or achieve some noneconomic goal in some other part of the world.
The increasing use of interna'tional economic relations as
a tool of Soviet international policy does not, of course, imply
that the domestic economy had attained complete economic and
technological independence of the West. On the contrary, the
USSR today must import not only certain industrial materials of
strategic significance, but, most important, It continues to be
dependent on Western technological advances in many industrial
sectors. And in the fields of agriculture and consumer goods
the technological lag is greatest. Despite 4 costly and
venerable program for the development and production of
synthetics, the USSR still is dependent on imports of natural
rubber for industry and. transport. A primary goal of the present
plan period, the expansion of the chemical industry, is dependent
for its success on imports of Western chemical equipment which,
embodying most recent technology, serve as prototypes to be
copied, adapted and perhaps even improved at some future date.
Although Soviet resource endowentis not all-encomPassing and al-
though Soviet technives of production in many fields are still
old-fashioned as compared with the 'West, the USSR has achieved
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"equalitymith" and therefore technologies' independence of the
West in those sectors of tbe economy which it considers of vital
importance: military output and much of heavy industry.
Externally the burgeoning of Soviet economic power has been
manifest, in a volume of international trade which has grown more
rapidly than either Soviet production or total world trade. Al-
though still of minor significance in the total of the world
economy, Soviet exports have increased from three percent to
five percent of the total of 'world exports between 1950 and 1960.
Soviet commodity trade has expanded at an average annual rate of
about 11 percent since 1955, a pace more rapid than*of GNP
reed-about-etamel?bilthe growth of iniustrial production.
Meanwhile, the nem, aggressive content of Soviet foreign
economic policy was reflected in the increasing relative
immortance of Soviet trade with tbe Free World in the total of
3oviet International trade. During the first half of tbe 1950's
ransaction8 with other countries of tits Commaistlace
accounted for 80 percent of total Soviet commodity trade, exchanges
eith the Free World accounting for about one-fifth. Between 1955
and 196C4 houever, because trade eithWeetern countries grew more
.eapidly than trade with other Bloc members, the share of the Free
World rose from 20 to 30 percent, and in 1961 even reached ane-
bird of total trade. Thus, between 1955 and 1961, while total
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trade was groving at about 11 percent a year, trade with the
mmunist Moe rose by only 7 percent, but trade with the Free
World expanded at an annual rate of 20 percent. This westward
shift in the orientation of Soviet international exchange was a
measure both of the success of its new foreign economic policy
and of the importance of imports from the West to the pre-
vailing Soviet economic plan (2959-1965).
rihble 1
Distribution of Soviet Foreign Trade
1950, 1955, and 1961
Millions US Dollars and Percent of Total
_
Value
Percent
Value
Percent
Value
Percent
as"
I319.
100
6,487
100
11,?Aa
100
IKPTI, AVM
Oloc
gat
81
2d107.
72.
L.n.
66
European
Satellites
1,866
57
3,455
53
6,486
55
Communist
China
576
18
1,392
22
918
8
Asian ?
Satellites
195
6
261
4
374
3
free World
414
1.r.,&.
21li.J.921
)1n2ustria1
Vest
n a
n a
974
15
2,152
18
Arilderdeve.
loped
Countries
na
na
354
5
1,769
15
Unaccounted for
na
na
51
1
130.
1
?17?lieeluse of rounding, may not add to the totals
shown.
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_Trade as en Ideolmkeelliese_pe
A. ag95.144e_bendation
Before World War II Soviet international economic
relations vere almost exclusively determined by their ability to.
contribute to Soviet industrial strength; the manner in'whiCh
their foreign economle relations were conducted vas determined
by the Soviet desire for international respectability. Indeed
the single compelling goal of all of Soviet policy vas the at-
tainment of industrial power at the most rapid rate consistent
with domestic security. Exports represented diversion of
resources from domestic use which was suffered only because the
resources could be exchange for commodities 'Whose contribution
to Industrial growth would be even greeter -- modern machinery.
At the wame time the Soviet leaders, smarting from their treat-
ment as internatIonal outlays by the Western powers, strove so
to eomPort themselves in international transactions as to prove
their respectability. %he Soviet Union yes scrupulous in
meeting all of its commitments on time and at par. Xt
purchased almost entirely for cash, exporting gold to meet its
debts yhen its export receipts were insufficient. When legal
disputes arose over international commerce, soviet courts
strove for complete Objectivity in their treatment of for
end in the nature of their decisions. By 1940 as a result of
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diligent and unscrupulous measures to mdbilize domestic
resources, the USSR had achieved an impressive measure of
industrial strength. And through diligent and scrupulous
cultivation of its international commercial reputation, it
succeeded in attaining a position of commercial respectdbility
and in fashioning for itself a small niche in world trade.
During these formative years, exclusive concentration
on overcoming its economic weakness inhibited the Soviet leader-
ship from developing a more aggressive foreign economic policy.
Certain hesitating steps along the path of economic diplomacy
vete attempted but not pursued. The fact that traditional
Russian interest in the Middle East, for example, was sustained
by the Communist regime was illuetrated by offers of econemic
aid to Afghanistan, Turkey and Persia in the early 1920s. In-
deed the stripling Soviet economy constructed several textile
plants on. the basis of long-term credits, and provided technical
aid to these countries, but such activities were necessarily
limited by its own compelling domestic requirements.
The full development of trade as an ideological weapom
awaited the growth of Soviet ecoromic power. When, after World
War IX, through the use of subversion and armed forte the USSR
succwIded in creating an empire of Satellite states in Eastern
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Eerops? it was for tbe first time in a position of influence in
an intezeationalsorket. The Soviet Union was therefore able to
uee comoditerezobange as the chief means of consolidating and
extending its position of power in Eastern Europe. The creation
of a Ccumunist state in Mainland China in 1949 further extended
the scope of the internationalenrket organized on the basis of
Soviet institutions. Because the USSR vas the largest trading
partner in this "Socialist vorld market," its transactions could
not but influence the market.
'Even this extension of its international eoonomic rela-
tions to enconpass other Socialist partners, hovever, brought
little chanpinbasic Soviet foreign economic policy. Tbe role
of international trade with socialist and capitalist wearies
alike remained essentially growth-oriented, valued for its con-
tribution to the modernization and expansion of Soviet industry.
Between 1948 and 1955 a variety of devices enabled tbe USSR,
both to extract a sizable imeort surplus in its trade with the
European Satellites and to effect a complete reorientation of
the international commerce -of these countries, away fran roamer
tradirg partners in Western Europe toward the Soviet Union and
other. Communist states. Through reparation deliveries and war
booty the USSR acquired machinery and egpipment estimated to
have amounted to upward Of 10 billion dollars? Pseudo-legal
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techniqees fUrther enataed the USSR to arrange a redistribution
of former German assets in Eastern Europe in such a way that it
acquired a claim to as rmzch as one-half of the current produc-
tion of certain Satellite countries. By placing orders for
equipment and materials in Easternikumpo the USSR was able to
direct the course of industrial investment and thus the structure
of industryin these countries to its own requirements. The
Soviet Union became the main supplier of raw materials to
Satellite industry and the prime market for their finished pro-
duct. 2%* Ubiquitous presence of Soviet advisers threughout
Eastern Europe at all levels of government and industry insured
the efficacy of Soviet control.
The development of economic relations with Mainland
China after the assumption of control by the Cemmunist regime in
1949 folloved quite a different path. The Chinese Ccumunist party
attained control over the Mainland 'without aid from the Soviet
'Gaon. From the outset economic relations between the USSR and
ceumnniet China were governed by a policy of mutual accommodation.
Chinese agricultural products and raw materials were exehanged
for Soviet industrial goods; the Soviet Union provided several
long-term credits for purposes-Of imbestrial development and
the services of scientists, technicians, and specialists of
various kinds to advise the Chinese in their economic development.
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From the Soviet viewpoint the expansion of trade with China
provided an efficient and economic contribution to the economic
development of the Soviet Far East.
B. Fashioning the Weapon
The ehift to an aggressive foreign economic policy in
the 1950's appeared to be abrupt, but actually was thoroughly
conceived, baying lomg been part of Communist strategy. Tbe
conceptual scheme of Lenin concerning the historically necessary
course of political development, while ordaining that Capitalism
ultimatelyggve way to Communism, insisted that the 'underdeveloped
countries need not In every case pass through the stage of
Capitalism in progressing toward Socialimn. And since the 1920s
Soviet writers have looked forward to the day when the USSR would
be in a position materially to aid these countries along the
direct route to Communism. By tbe mid-1950's the Soviet leader-
sbip apparently felt that internal economic growth had so
diminished the country's vulnerability that it was finally in a
position to inaugurate an aggressive program of economic diplomacy.
Offers of foreign aid "without strings" to underde-
veloped countries began to multiply in 1954 and 1955, and
although a few minor credits were extended in these pare, the
Soviet aid offensive was on the whole skeptically received. The
conclusion of a major military aid agreement with Eglypt in late
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1955#* and the prompt delivery of the equipment and technical
personnel contracted for, gave the program its first real nomentum.
in the second half of the decade under the leadership of the USSR ,
credits and grants were exteaamihy other members of the Communist
Bloc to underdeveloped countries for military and developmental
purposes in increasing volume. In the military sphere, the form
of Soviet aid varied from the training of officers in Staff
Colleges of the USSR to the provision of modern jet fighters.
Economic aid has similarly comprised a great variety of industries,
ranging from a modern integrated steel mill to geologic surveys
and small workshops. Trade agreements were signed providing for
an exchange of the major exports of these countries against
machinery, materials and technical advice from the USSR and
Eastern Europe and cultural and technical delegations moved to
and from the Bloc in growing magnitude. By 1961 the USSR had
achieved a secure position of influence in the economies of
Egypt, India, Afghanistan, Indonesia and Cuba and had established
the basis for expanding relations with a large number of other
countrtes. At the same time Soviet offers of scholarships for
academic and technical training in the USSR provided an increasing
flow of students and trainees from most of the underdeveloped
countries of Asia., Africa and Latin America.
4----KIWarrire1oc signatory partner was Czechoslovakia, the
materiel provided was primari34. Soviet.
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The shift from a defensive foreign economic policy was
also evident in Soviet relations with the European Satellites.
An contrast to the early post-ear period when the Satellites
Imre forced to contribute heavily to Soviet economic recon-
struction, in the late 1950's the Soviet Union provided sizeable
quantities of bath emergency and developmental aid to other
ecumenist countries. The policy shift frem the stick to the
carrot inSoviet treatment -of Eastern Enrope vas partially the
result of the 1956 Satellite revolts; at the same time, however,
the relative affluence of the Soviet Unien made the policy shift
possible.
Since 1954 Soviet economic aid to underdeveloped Free
World countries has amounted to about $3.5 billion, or about
70 percent of the total aid program of the Sino-Soviet Bloc.
Duriag the same period, the USSR gave near4 $4 billion of elk
also in the form of credits and grants, to other Communist
countries. While during the past two years new aid extensions
to underdeveloped countriea have slowed considerably, the
opposite has been true of aid for the Bloc. In these years
credits and grants for East Germany and the Communist Far East
were probably at an all time high.
Soviet adventures in international finance have not
been confined to the developeent of their foreign ai& program,
for in recent years the USSR has been active not only as a
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lender of long and medium term capital, but also as a borrower.
Tn contrast with its earlier history vhen Soviet trade with
Western countries was conducted almost exclusively on a cash
basis since the initiation of the current seven year plan
(1959-65) Soviet purchasing missions in Western Europe, Japan
and the US have bargained as vigorously over the terms of the
sale as over the price of the plant and machinery for which they
mere negotiating. With heightening ccmpetition among the
engineering industries of the industrialized ccuntries of the
Free World, the difference between 'winning or losing a sizeable
contract bas often been determined on the basis of such financial
terms. Tbe USSR has consequently been able to finance a signi-
ficant portion of Soviet imports from these countries since 1.960
on tbe basis of 5 and even 7 year credits. By the end of 1962
net Soviet indebtedness to the Industrial West for such credit
financing eill probillaybe about half a billion dollars.
Deliveries of aid goods tend to lag behind the aid
commitment. Soviet goods and services delivered to underde-
velopmi countries amount to about one-quarter of aid commitments,
or to less than one billion dollars tor.the entire period sine*
1954. Considering the aggregate of Soviet borrowing and lending
activities with non-Communist countries for the same period, the
1SSR has delivered unrequited exports to the underdeveloped West
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and has reoeivedunxequited imports from the inftstrial West.
On balance net Soviet international captbasalvements with
non-Communist countries have represented a net outflow of Soviet
spoils and services to the West of only about one-quarter of a
billion dollars.
Perhaps the most dramatic use of international trade
as a weapon of foreign policy occurred in mid-1960 in the course
of the Sino-Soviet ideological dispute. At that time the Soviet
Union precipitously withdrem most if not all of its technicians,
numbering upmard of 30000, who were working in China to aid in
Chinese industrialization. This act of eeonomio warfare was
followed by a veritable collapse in Sino-Soviat trade which by
the end of 1961 had dropped to two-fifths of its 1959 level..
Thus, in leas than a decade Soviet international
economic activities have ceased to be of a cautious, conserva-
tive nature and have rather become adventurous and at times
even flaeboyant. That these new policies have been successfa
13 attested by the position of economic and political influence
that the usan has achieved in tbe international arena. Although
Soviet international trade accounts for only a barely signifi-
mut portion of total world, trade, its ability to influence the
AUSirgil riiiiabIe decline in Sino-Soviet exchange would
have occurred in any event because of the serious economic
difficulties in China, the unilateral withdrawal of Soviet
technicians by itself fostered mistrust and caused a diversion of
China's trade away from the USSR.
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economies of certain countries and the behavior of Certain
commalttymmatets has been impressively demonstrated.
III. Trade with the Communist Bloc
A. The Institutions of the Socialist World Market
1. Insulation of the Domestic BcomomE
In a completely controlled econagy in which pro-
duction and consumption are planned at a level arid of a composi-
tion to insure a very rapid rate of industrial growth, the prime
function of foreign trade is to provide the commodities necesmary
to plan fulfillment mbiah are not available fran domestic sources?
At the same time, because 8W:4W:to/and predictabilitoraxe
necesseTy to successful planning, as well aa to plan fUlfillment,
the foreign trade mechanism must operate in sueh a fashion as to
protect the domestic economy train disturbing foreign Influence.
The internal price systme of a Communist country
is so devised as to encourage the use of some ccommaties and
discourage the use of others; in order to function successfully
in the light of Communist goals, it must be insulatet and isolated
from foreign influences. For example, in order to restrict the
demand fat consumer goods in Bloc countries, relatively high
prices axe set for such commodities. In a free economy, high
prices would direct a major part of omnuodity imports to the
consumer sector, a development which would thwart Bloc military
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and industrial growth imperatives. Strict controls over foreign
trade, accordingly, are necessary in a Communist country,
Writers in the Communist Bloc have long pointed
with pride to the fact that their economies are protected from
the volatile and erratic price movements that characterize
Western markets. Insofar as their pride is justified, it is
equally true that the internal price systems of Bloc countries
bear no relation to one another, for the barricades which pro-
tect the domestic systems from influences from the Capitalist
world also operate to insulate them from develop:eras within the
Bloc.
This isolation or the internal price systems of
Bloc countries has been achieved by an of rigid state con-
trols over all international transactions. Foreign trade is a
mcelopoly of the state and with other Bloc countries is subject
to rigid, bilateral balancing; with few exceptions, no oashmoves,
all transactions being settled by the movement of goods, Inter-
national purchases and sales are conducted in prices and
denominated in currencies which are different from those pre-
vailing internally. The separation of the two price systems has
been achieved and maintained by an elaborate systaa of artificial
exchange rates and budgetary supports. As a result Bloc
ourrencies are purely national currencies with no international
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uses. The zloty is usable only within Poland, the forint only
within Hungary and the Soviet ruble only within the USSR. Eco-
nomic intercourse between a Cammunist country and a country of ?
the Free World is negotiated in a Western monetary unit. Bi-
lateral paynents accounts are also maintained in a Western
monetanrumit and balances are settled in Western exchange. Trade
among members of the Communist Bloc themselves, however, are con-
ducted in terms of an accounting unit termed a ruble.
2. Ruble
--Paces
The ruble used in intra-Bloc commodity transac-
tions, which can be termed the foreign exchange ruble or the
devisa ruble: is purely an accounting unit. It is not repre-
sented. by any certificate or piece of metal or paper as is the
internal ruble. The devise ruble is solely a conceptual standard
for measuring value and need have no_more relation to the internal
ruble than the quart which is the unit of liquid measure hen to
the quart which is the unit of dry measure. As long as Bloc
foreign trade prices axe different frun Soviet internal prices
for the same commodity, the value of the foreign exchange ruble
is different from the value of tbe Soviet rale.
a. Nature of Bloc .TradePrici31 Practice
Trade agreements, or protocols to existing
agreements, are negotiated among countries of the Bloc annually.
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These agreements simply list the commodities to be exchanged and
the total value of trade to be achieved. It is left to trade
delegations to decide in conference the details of price and
quantity fox each specific commodity to be exported or importel.
These? meetings are marked by strenuous bargaining and vigorous
competition between the negotiatirq partners. The exporters of
commodities for which the demand is strong -- for example, most
Czechoslovak machinery, Polish coal, Rumanian oil and timber,
and Soviet industrial goods and materials -- can command not
only good prices but also "hard" commodities in exchange. In
fact, because of the pervasiveness of shortages throughout the
Moe, a strong bargaining position is used more often to acquire
scarce commodities than to achieve a more favorable price.
The negotiating partners go to these meting
armed with documentation about world market prices. This in-
volves information about prices at which the ccumodity in question
bas actuall,y been sold recently in specific transactions in the
West. In fact, in the Ministry of Foreign Trade of most Bloc
countries, there is a division which does nothing except collect
such price information. Thus worlAi market prices do form the
basis for Bloc foreiga trade prices. These prices (the dollar
price multiplied by the official exchange rate of the ruble for
the dollar) are the point at which bargaining begins. Strictly,
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however, there is no such thing as a single woad market price.
The price at ehich the UK buys baoaa frau Danmark for example,
maybe quite different frmn the price it pays for bacon fran
New Zealand or Argentina. Thus the Bloc exporter can always
find a relatively high Western price-to support his claim, but
the importer can also document from Free World sources his claim
to a lower price. The price finalky agreed on depends on the
relative bargaining strength of the two countries as colored by
their needs and avallabilities.
Once the price has been agreed on, it
remains in force for the entire year, and often for several years.
It not intrequently happens, however, that no aweement on prices
can be reached. Then trade continues, being recorded at last
year's prices, subject to final adjustment when agreement is at
length reached. In fact it appears that the difficulties atten-
dant on reaching agreement on price have been as important as
the necessity of stability and predictability for planning
purposes in keep:Wage-ices constant over several years.
b. Historical Course of Bloc Trade Prices
Although Bloc trade prices have been determined
at. bargaining sessions since the end of World War XI, the relative
strength of the bargaining partners has changed0 immediately
aXter the war the USSR announced that commodities would be
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exchmwdvithin the Bloc at world. market prices. At this time,
Satellite trade representatives: who had no way of knowing what
these prices were, could only take tbe word of the Soviet
representatives. They began to realivs, however, that the prices
of Soviet exports were very high and that the prices of their own
exports, were law. They themselves undertook some market research
and thereafter vent to the negotiations possessed of documentation.
In this way tbe Satellites praetayteNe gradually forced Bloc
trade prices to their 'world market levels. There is some evidence
to indicate that in the late 1940's most Bloc trade prices were
consideralayabove vorld market ;elms) with Soviet export prices
being higher than Soviet import prices. Since then, Bloc trade
prices seem on the average .to have declined.
3. DLE)....e_Rate,
Xn March 1950 by an appropriate definition of its
gold content, the USSR set the rate at which the rale was to be
measured against other currencies at the equivalent of $0.25, and
maintained this official exchange rate until 1 January 1961, At
this rate the ruble vas considerataymervalued in the sense that
25 in tbe US would buy much mere than mou34 one ruble in the
MM. A rate which overstated the value of the ruble use
prObably choaen for purposes of prestige. That the rate was
purely arbitrary had no significance to the trolinglartmers of
the USSR, however, for those in the Free World never had occasion
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to use it,* and those in the Bloc used it only for accounting
purposes. Other Communist countries simi1ar1y determined at an
arbitrary level the rates at vbich their currencies were to be
measured against the dollar and the ruble.
Table 2
Foreign Exchange Rates for Commercial fteansactions
for Currencies of the Soviet Bloc
1954-60 and 1961-62
County
,
Hate of Exchange
3p54-do
3961-62
Unit of In terms of In terms of In terms of Inter= of
Currency USS1 _ US$1 US$1 US$1
Albanta
Lek
50.0
12.5
50.0
55.56
Bulgaria
ley
6.8
1.7
1.17 2/
1.3 9./
Czechoslova-
kia
Crown
7.2
1.8
7.2
8.o
East Germany
Ostmark
2.2
0.5
2.22 yi
2.47 13j(
Hungary
Forint
11.7
2.9
11.74
13.04
Poland
Zloty
4.0
1.0
4.0
4.44
Rumania
tau
6.0
1.5
6
6.67
USSR
Ruble
4.o
0.9
--a.evnuar9y61. Official rates diving 196i:
6.8 lave per Us$1, 7.56 leva per 1 ruble. ,
b. Altbmigithis is the official rate, (to rates in use since 1959
are as follows: 4.2 ME per US$1; 4.67 ENE per 1 ruble.
* --EireaCiBiriat case of non-conortodity transactions is discussed
below.
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Because these official exchange rates were set with
the intention-of insulating the internal economy from extermal
influences with no regard to relative price levels, the conversion
of export receipts or import payments into the domestic currency,
an adjustment necessary for maintaining domestic accounts, resulted
in fOreign trade prices ehich bore no relation to domestie prices.
In general internal Bloc prices when convertel at official rates
were higher -- but higher by varying degrees -- than Western
wices. Consequently, the domestic equivalent of export receipts
was in most cases considerably below the internal price of the
ctsumodity, and the opposite vas true of import payments.' These
price differentials thus resulted in price losses an exports awl
profits on imports which were absorbed by the country's budget.
Because of the existence of these price differentials,
and especially the negative differential characteristic of exports,
Bloc exports have been termed "subsidized." This is a very special
type of subsidy', however, and results solely froe the exists***
of an arbitrarily high foreign exchange rate. Moreover, exports
to other Bloc countries as well as exports to the West would be
"subsidized" by Communiet countries in this sense, and necessarily
so as long as Bloc foreigo trade prices remained loiter then inter-
nal prices of member countries.
The only Bloc exports 'which would not be subsidized
becauee of the artificially high exchange rate vould be exports
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of those commodities Whose internal price in the exporting
country vas equal to or lower than the export price converted
into the domestie eurreney at official rates. Thus if the Iegel
price of some raw material within the USSR were 130 rubles per
ton and if this commodityware exported by the USSR at $20, or
80 rUbles, per ton a price loss o' 20 rubles would be involved.
2his pride loss is directly attributable to the use of a 250
ruble exchange rate wizen the implicit exdhange rats appropriate
for this commodity is at the level of 5 rubles to the dollar, or 200.
Whether the total of price differential losses borne
by the budget is greater or less than the total of profits depends
on the structure of the internal price system of the Communist
couehry as well as on the level of the exchange rates If the
isolated internal price system is such that, at the official
exchange rate, the purchasing power of the currency is over-
valued, but considerably more overvalued in regard to some
goods than others, then, the structure of the internal price
system, as uell se its level, is distorted from that of the
world market. Under such conditions -- mhidh seem to Characterise
the internal price systems of Communist countries a change in
the exchange rate by itself could decrease the gross price
differential loss and profit, but would not eliminate a net
profit or loss. A realistic exdhange rates would be one
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representing the average relationship between internal ruble prices
and world prices in dollara or sterlinig for goods entering inter-
national trade. Given a distorted internal price structure, how-
ever, the variation of individual ruble-dollar price relationships
around tbe average would be large and pradbly skewed., resulting
in sone net price differential for the sum of price losses and
profits on trade.
The 1961 revision of the official exchange rate of
the ruble, which was ostensibly an appreication of the ruble in
terms of Western currencies, vas probdbly undertaken for the pur-
pose of reduoing the gross price differential profit and loss to
be borne by the Soviet budget on account of foreign trade. By
redefining the gold content of the ruble, its relationship to
the dollar was changed from the equivalent of 250 to $1.11, or
from 4 rubles to .9 rubles to the dollar. Ostensibly the value
of the rnble was raised by 4.4 times. Since the USSR revised
its interrial price level simultaneously, however, by dividing all
prices by 10, the exchange rate of the ruble as a measure or
relative purchasing power was in fact depreciated. The new
exchange rate, however, apeears to be more realistic as a
measure of relative price levels. While considerations of
prestige mere prObably not absent in setting the value of tbe
rtible higher than the dollar, the degree of overvaluation has
certwinl5r been considemftblyreduced if not wholly eliminated.
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In setting the foreign exchange rate or the rUble
at a more realistic level, the amount of price differential pro..
fits collected on imports by the budget, and price differential
losses paid 'by the budget on exports, would be considerably
reduced. In fact, at the new exchange rate differences between
internal and external prices will reflect almost exclusively
distortions in the Soviet price structure. Soviet planners are
therefore in a position to note the commodity composition of their
foreign trade which involves the most extreme price differentials
and to examine the reasons for these differentials in the interests
of economic efficiency and maximum productivity. Although in the
past Soviet planners have been little concerned with relative
costs in determining the composition of their foreign trade,
pressure on growth rates vill increasingly lead toward ration-
alisation, of sectors of their economy.
4. Non-Commercial Teansactions
Before 1957 the countries of the Communist Bloc
maintained a single schedule of exchange rets, the rates being
all consistent with one another and with the rate of 4 rubles
to the dollar. The rates were applicable to both commercial and
so-ealled noncommercial transactions. The distinction between
these two rests on the difference between transactions involving
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commodities and services exchanged with someone outside the
country and transactions involving goods and services sold to
and consumed by a foreigner within the ccuntry's borders.
Commercial transactions include the international purchases and
sales nf commodities and commodity transport. Boncemmercial
transaetions inolude receipts and expenditures by international
tourists and by embassies, receipts and expenditures for
passenger transportation and international telephone and
telegraph services, and individual and institutional remittances.
Because Bloc credit transactions -- borrowing and 'ending -- relate
to goods and are directly effected. in goods, commercial exchange
rates apply both to the receipt of the credit and to the payment
of interest and principal.*
Deginning in early 1957 Bloc members individually
announced new official exchange rates for noncommercial transac-
tions. In most cases, these new rates represented a depreciation
of the Bloc currency in terms of Western currencies (for example,
Western tourists were able to buy Soviet rubles at the rate of
10 to US $1 compared with only 4 to 03 $1 before 1957) and,
except for Poland, an appreciation of Satellite currencies in
terms of the Soviet rale. Same Satellite currencies were
appreciated, others depreciated, in terms of other Satellite
currencies. The reason for the new rates for noncommercial pur-
poses in relation to the West seemed to lie in an attempt on the
4---Tiloc credit transactions almost always are credits to finance
the exports of the lending country. The commodities involved are
usually valued at the prices prevailing in the trade agreement be-
tween the two countries concerned. Similarly, repayments are
effected in goods at the prices of the current trade agreement.
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part of all Bloc members to increase earnings of Western currencies
by encouraging tourists from the West. The new rates in relation
to other Bloc countries seemed to represent an attempt to make
Intra-Bloc settlements of noncommercial accounts more equitable
by relating the cost of currencies to their various purchasing
powers.
Whereas Bloc commercial exchange rates were all
Internally connistent with one another and with Free World
currencies, these new noncommercial rates in themselves involved
each Bloc member in a system of dual rates. The noncommercial
exchange rates proclaimed by any one country represented one
internally consistent set in relation to all Free World countries
and a second internally consistent set for all Bloc countries,
but between the Bloc and the West they were not consistent. For
example, the Polish zloty exchanged at a rate of 24 to US $1 for
these purposes and the Soviet ruble at a rate of 10 to US $1, but
the noncommercial rate between Poland and the USSR was set at
1.5 zioties to the ruble rather than 2.4 zloties which would be
consistent with the dollar rates. These discrepancies could be
maintained only because of strict controls over the uses of
domestic currencies by all Bloc members.
All transactions among Bloc countries are finally
settled in goods. When, for example, Soviet specialists or
technicians are sent to a Satellite country, the latter spays the
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USSR for their services eventually by exporting commodities to
the USSR. Each Bloc country maintains with every other member
a noncommercial account through *ahich the value of these non-
commodity transactions is recorded. At the end of each year
these accounts are balanced against one another, the net debit
or credit being transferred to the commodity account for settle-
ment.
Because of their nature noncommercial transactions
Involve purchases and sales at derestip prices rather than at
foreign trade prices and because the internal price levels of
individual Bloc members are not only unrelated to one another but
vary considerably, the previous system of clearing noncommercial
balances at commercial exchange rates put at a disadvantage those
countries whose currencies were least overvalued or uhose-inter-
nell prices were relatively low. Since the Soviet ruble was
appreciated in term of only 1 Satellite currency but depreciated
in terms of 5, it seems likely that the net effect on Intra-Sloc
commodity flows of the the noncommercial exchange rate revisions
mould have been a reduction in Soviet purchasing power in the
Satellites.
In 1961 after the revision of the Soviet official
egcbange rate, the distinction between a commercial and non-
commercial rate for transactions vith Western countries was
e11m4nated, the new rate applying to tourist and embassy
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schedule of noncommercial rates vis..a..vis other Bloc countries vas
retained? however, the only change being the appreciation of the
ruble by 10 times to reflect the change in internal. Soviet prices.
Table 3
Foreii Exchange Rate for Non-Comercial Transactions
for Currencies of the Soviet Bloc
count
Unit of
Currency
Rate of
change -
In terms of
USS1
In terms of
3. Ruble a!
Albania
Lek
150W
100W
Bulgaria
Lev
1.17
0.89 gf
Czechoslovakia
Crown
14.34 ly
11.6 2/
East Germany
Ostm9.rk
4.2 Eti
3.9 pi
Hungary
Forint
23.48 RV
14.0 g/
Poland
Zloty
214.00 d
15.0 2/
Rumania
Let'
15.00 14/
9.7 W
USSR
Ruble
0.9 2/
a. anuary e r ex or 0330
rates. b. As of 3. July 1957. c. As of 3. January 1961.
a. As of 1 January 3962. e. As of 1 January 3958. f. As of
1 April 1957. g. As of 11 Feburary 3957. h. As of 13. May 3960.
se
The 3957 adjustment of intra-Bloc noncommerc.ial rates
represented the first step taken by Sloe countries to relate
exchange rates of relative purchasing powers. As such it also
represented a retreat from the philosophy of "insulation and isola-
tion 0 and from the concept of an absolute internal economy unrelated
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to that of the outside world. The 1961 revision of the basic
commercial rate of the ruble in terms of Western currencies was
the second step in the same direction. At the least these moves
are evidence of a recognition of the impossibility of absolute
insulation without complete cessation of all economic intercourse.
Settlement of noncommercial transactions on an equitable basis
requires the use of an exchange rate which reflects relative pur-
chasing power. A meaningful exchange rate can serve many other
useful purposes, however, and is essential for determining the
relative merit of an expansion of domestic output as opposed to
an increase in imports of a given good. An economy committed
to high growth rates must be Increasingly concerned with all
aspects of economic efficiency, including the efficiency of its
foreign trade operation.
B. Trade with Eastern Europe:_ from the Stick to the Carrot
1. The Period of ,the Stick
In tbe early post-war period Soviet foreign economic
policy vas dominated by two related goals: the rapid restoration
of domestic economic strength and the creation in Eastern Europe
of a Soviet-controlled buffer area to protect the exposed frontier.
The immediate post-war years were a period of plunder, the USSR
1.ak1,ng as the victor's spoils in former enemy countries productive
equipment of all kinds, dismantling factories, transport facilities, and
worshops for transfer to the Soviet Union. In addition to such
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war booty, the USSR took as reparations title to much German
property located in Hungary, Rumania and Bulgaria, thereby
obtaining control over several hundred producing Amterprises.
These former German assets provided the basis for the Soviet-
Satellite joint-stock companies, formed in 1946-1948, through
'which the USSR acquired control over a major share of Satellite
mining, manufacturing, transportation and finance. Reparations
deliveries from the current output of these and other plants
were important not only to the restoration of the Soviet economy
but provided the mechanism for Obtaining a high degree of con-
trol over economic activity in Eastern Europe. East German
reparation deliveries during 1945-50, for example9 amounted to
about $9 billion 'while commercial exports to the USSR aggregeted
only $5.5 billion.
After the initial period of plunder when Soviet
exploitation of resources and capital assets had threatened to
destroy the economic foundations of Eastern Europe, the pattern
of Soviet treatment shifted to one more consistent with its
long-run goal of consolidating its domination of the area.
Through reparation deliveries and export orders, Communist party
pressures and the presence of Soviet advisors in key ministerial
and production posts, Satellite trade vas redirected from its
traditional Western orientation into Soviet Bloc channels.
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Satellite economies were developed in such a 'way as to make them
dependent On the Soviet Union for markets and raw materials.
Priority development of heavy industry and neglect of traditional
agricultural consumer goods production narrowed the basis for
Satellite trade with the West. The economic reorientation of
Eastern Europe was formalized by the formation in 1.919 of the
Council for Mutual Economic Assistance (CEMA) to coordinate ia-
ternal ecommic plans and foreign economic relations of the Soviet
Bloc.
Th e shift in the pattern of trade and production of
Eastern Europe subjected the Satellite economies to severe strains.
In addition Soviet exploitative policies and autarkic development
plans overtaxed the productive resources of the area and caused
much resentment against local governments as well as against the
USSR. In 1953 the new Kremlin leadership, recognizing that the
stability of the area was threatened, began to relax the more
burdensome controls and lighten its iron demands Soviet'advisere
wore withdrawn, discrimieatory pricing practices were revised and
the dissolution of the joint stock companies was initiated. The
Soviet leadership also urged some modifications in Satellite
economic plans to provide some concessions to consumer demand.
The adjustments made in Soviet-Sateilite relations
were not adequate, however, to reverse the growing disproportion
between the industrial capacity being creatyl in Eastern Europe
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aM the raw materials, befell and power resources necessary to
support it. The Soviet Uhion thus either had to divert increasing
quantities of its own raw material resources to bolster the lagging
Satellite economies or risk &Itellite economic reorientation toward
tbe West. The Soviet Union chose to do neither, and-as a result,
tbe initial measures taken were wholly inadequate to avert the
further deterioration in the economies of the Satellites which
contrfbuted directly to the Polish and Hungarian upheavals in the
fall of 1956.
2. The Period of the Crrrot
Following the 1956 uprisings the USSR sought to
restore political and economic stability to the Satellites by
offeriag major economic concessions and by removing the more
blatant inequities in Soviet economic dealings with several of
the Satellites. Concessions included debt cancellations,
eliminating discriminatory pricing practices, and the like.
Weet important, the Soviet Union agreed to assist the Satellites
In overcoming dislocatione caused by the Polish and Hungarian
events and generally to assist their economic recovery. Thus,
the Soviet Union extended large emergency credits in the form
or commodity deliveries and foreign exchange (see discussion on
credits below). It also negotiate& supplementary-trade agreements
notably with Bast Germany and Bulgaria, aseuring those countries
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of additional markets for the products of depressed industries
and guaranteeing them additional supplies of industrial raw
materials and foodstuffs generally in short supply.
Following the attainment of relative economic
stability in the Satellites, the USSR in 1957 and 1958 renewed
its efforts to achieve economic coordination in Eastern Europe.
New long-term economic plans of the Satellites for the period
1961-65 were to be dovetailed with the new Soviet seven-year
plan (1959-1965). Economic coordination was to be effected on a
sector-by-sector basis, with priority going to the development,
on a national or regional scale as appropriate, of an adequate
raw material base for the Soriet Bloc as a whole. In support
of the economic coordination program, the Soviet Uhion negotiated
five-year (1961-65) trade agreements with each of the Satellites,
in which it undertook to be the principal supplier of Satellite
Import requirements for industrial raw materials, fuels, and
foodstuffs, and the principal export market for Satellite
manufactures.
The USSR has since made continued efforts to
strengthen the Satellite economies within the framework of the
CEMA integration program, increasing supplies of raw materials,
furnishing economic development loans and emergency credits where
needed, encouraging joint Satellite investment projects, etc.
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That the Soviet leadership is nom far from satisfied with the
progress of the Satellite economies and the integration program
is evident in the decision in June 1962 to create a new Executive
Directorate to oversee CBMA and the appointment to that body on
a full-time basis of the men who have been the chief economic
planners of the USSR and some of the Satellites. Indeed, the
appointment of top-level planners would appear to indicate that
a major effort will be made to correct the "unproductive expendi-
tures a material resources fiiht2h7be1d back . . . growth .
to assist the limping agricultural economies of the European
Bloc, and to strengthen the Soviet Bloc economy in general.
Given Khrusbebev's self-imposed economic compeiltica between East
and West, the task of making the CE MA economic grouping more viable
becomes even more urgent in the face of the rapid strides .being
made by the European Common Market: .
3. Economic Assistance
Varying use of the carrot and stick by the USSR
with respect to its European Satellites is perhaps bast exemplified
by its economic assistance policy (or lack thereof). During the
first decade following World War II when unrequited Soviet imports
(reparations payments, mar booty, profits fres Soviet-Satellite
joint-stock companies, etc.) could be counted in the tens of
billions of dollars, the USSR sporadically extended credits to
the Satellites as an ad hoc response to particular situations.
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TI e bulk of the economic assistance extended by the Soviet Union
during the period 1945-1955, which amounted to about $1.5 billion,
consisted of credits to Boland and East Germany, in the latter
case, apparently in response to the unrest in East Germany in 1953.
During the year of the revolts and in the succeed-
ing years, (1956-57) the USSR provided economic aid to the Satellites
amounting to about $1.2 billion,* or almost as nuch as that
provided in the previous decade. In addition, the USSR wrote off
Table 4
Soviet Economic Credits and. Grant3 Extended
to the EUropean Satellites
1945-1962
Million US$
Country
1945-55
1956
1957
1958
1959
1966
1961
1962
Total
Albania
166
48
93
247
Bags:eta
198
92
72
44
162
568
Czecboslovskia
48
14
62
East Germany
363
20
260
235
475
."/
1,353
MIngarY
43
41
262
35
381
Poland,
614
300
914
Aumanla
.94
95
?
.........
4.1????ma
4?.?
189
olloarmwo
1,466
548
656
314
93
162
475
fl./
3,714
a. Theexter?WariaRiThi?t?ditoermaninThir-ry?W-v-al-uid
at $310 million. It is believed that this was part of the $475 million
credit extended in 1961.
7?17 Excluding Soviet credits for the purchase of Soviet holdings
in joint-stock companies.
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various debts for Soviet aid extended before 1956 and for the
repurchase of Soviet shares in the joint Soviet-Satellite companies
estimated at a value of $1 billion. Also, the Soviet Union agreed
to renegotiate to the advantage of the Satellites previous agree-
ments concerning prices for "commercial and noncommercial
services," costs of Soviet troop maintenance, and certain
transfers of Soviet property. The estimated value of these
additional concessions was almost $1 billion. Other benefits
which have accrued to the Satellites since 1956 include more
favorable loan repayment terms.
The 1956-57 period thus represented the pinnacle
of Soviet largesse with respect to Eastern Europe, and it was
essentially a rescue operation. Nevertheless) despite the decline
In credits to the European Satellites since that time, these
years marked the end of gross Soviet exploitation of the area and
the beginning of Soviet recognition that its awn self-interest lay
in the economic well-being of the Soviet Bloc as a whole. With
the exceptian of aid to East Oereanr, practically all Soviet
economic assistance to the Bloc since this period has been in the
form of economic development credits to the lesser developed
countries.
4. Trade
Spurred by the "closed Bloc" policy of Stalin,
Soviet trade with the European Satellites increased rapti4 in
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11?4 111
carA91012001-1
3946 or less than one-third of total Soviet trade to more than
$3 billion in 1953 or more than half of total Soviet trade of
0,700 million. More importantly, the orientation of the
Satellite countries' trade shifted radically toward the USSR. Ay
3953, the share of the USSR, ranged from one-third of the foreign
trade of Hungary and Roland to nearly three-fifths of Bulgarian
and Albanian trade (see Table 6). The failure of the Soviet
Union to provide anon:rending market for SatallitorOnvorts or a
reliable source of raw materials is reflected lathe decline of
the Ahem of the USSR in the Satellites' trade between 1953 and
2955. Since then, however, Soviet-Satellite trade has undergone
a substantial increase, averaging more than 11 percent annual/y
through 1.961 When it reached $6.5 billion (see Table 5). The
growth of Soviet-Satellite trade has been particularly-rapid
since the, beginning of the Soviet Seven-Tear Plan Period (1.959-
/965), and is expected to be maintained throughout the period,
engendering an, even greater dependence of the Satellites on the USSR.
Table 5
Soviet 7rade with the European Satellites
1955451
122/ 12g 122/
Exports 1,792 1,763 2,550
Imports 1,663 1,815 1,915
Teta/2/ 3,455 3,583 10465
at
1222.
2,320
2,950
2,206
2,539
4,526
5,470
12--13-131-22.--VE
19601961.
3,118 3,420
2,839 3,066
5,937 6,1186
a. Because of rounding,
omponents may not add to the totals shown.
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Table 6
SovietShare in European Satellite Trade
1953, 2955, 1960, and 1965
Percent of Total
Estimated
Country
2953
3Q5
202
3.965
Albania
57
ko
53
n a.
Bulgaria
56
53
54
Czechoslovakia
36
34
38
East Gamow
n a
38
43
45
EungarY
22
29
36
Poland
33
32
30
35
Rumania
us
49
In recent years, the bulk of Soviet trade vith the
Satellites bas been conducted vith the more highly Izidustrialized
countries of East Germ, Czechoslovakia, and Poland; trade vith
these eau:Aries accounts for more than tvo-thirds of total Soviet.
Satellite trade. These three countries as veil as BUngary pro-
vide the USSR vith about three-fourths of total Soviet imports of
machinery and equipment. These imports supply a substantial
share of total Soviet requirements for the pima goals of certain
sectors, e.g., transport, matallurgys.chemicalso By the same
token, theee_gre.the-vountrie's 161ch account for a large share
38
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of the Soviet fuels and raw materials exported to the Satellites.
Soviet trade with the lesser developml Satellites of Rumania and
Bulgaria is of a different nature, involving generally the export
of Soviet manufactured goods in -exchange for raw materials.
Geperelly speaking, hovever, Soviet-Satellite trade can be re-
presented as an exchange of Soviet fuels and raw materials for
Satellite maehinery and equipment and finished consumer goods*
C. Trade with China: From the Carrot to the Stick
From the very beginning of Communist rule in China,
Soviet-Chinese trade increased at a rapid pace. Throughout most
of tbe decade of the 1950's China was the USSR's most important
trading partner and Soviet economic policy toward China was
reflected in the economic, technical, and military assistance
provided to Chimmbytto USSR. The keystone of Soviet-Chinese
economic relations vas in the 291 major industrial projects
schedaled to be built in China through 1967 using Soviet machinery,
equiluent? and technical assistance.
Such Soviet support as has been provided for China's
drive to became a major industrial and political power has been
motivated by a desire to bolatar an alliance designed to enhance
the strength and vcrld power position of the Soviet Union and
the Bloc as a vhole. Thus p until recently, the economic relation-
ships between the two countries could be characterised as one of
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mutual accomodation. The intruaion, however, of ideological and
political differences into Sino-Soviet economic relations led to
the ness withdrawal of Soviet technicians from China in mid-.1960.
Tbe resulting mistreat between the two trading partners, =Whined
vith rapidly 'worsening economic conditions in China and the
apparent refusal of the USSR to provide mere than emodicum of
ecomomic assistance, (or the refusal of China to make the
ideological obeisances which might be the price of such, aid)
caused Sino-Soviet trade to decline sharply. In 1961 this
exchange vaa only two-fifths of the 1959 peak.
In view of the aihitious industrialization program
envieaged by t1 Chinese leadership, Soviet financial assistance
to China cannot be characterized as having been extensive. While
the value of the equipment involved in the projected 291 indus-
trial installations has been estimated at $3.3 billion, the pay-
ment for much of this equipment was apparently scheduled out
of current Chinese export earninge. During the first half of
the 1950's the USSR extended China some $1.3 billion in financial
assistanoe, only part of which wee designated for economic pur-
poses. Practically all of these credits had been utilized by
the Chinese, by 1956 and the Soviet equipment movipg under the
technical assistance program since that time has had to be
financed out of current Chinese export earnings. No other
assistance vas provided until 1961 .hen the USSR, recognising
4,o
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that Mana could not settle its accumulated trade indebtedness of $320
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million, funded this debt .over d period of rive years. A
providing $40 million vorth of sugar on credit, however, the ;JSSR did
nothing to facilitate China's anuisition of badly-needed commodities
and foodstuffs in 1961. Thus, Jae total of Soviet credits extended to
Chi= since 1950 has amounted to about $1.7 billion, a sum roughly
equivalent to Soviet credits and grants extended to the small. Asian
Bloc countries of Mongolia, North Vietnaut, and North Korea.*
Table?7
Soviet Trade with Communi. t China
1950-1461
lion Tt
Year
levorte
%Mal
33a7ance
1450
388
188
576
+200
1951
476
332
808
+ 144
1.952
554
414
968
+140
1953
698
475
1,173
+223
1954
759
578
1,337
+18].
/955
748
644
1,392
+104
1956
733
764
1,497
-31
1957
544
738
1,282
-194
1950
634
881
1,515
.247
1959
955
1,100
2,055
-145
1960
817
848
1,665
-31
1961
367
552.
418
4E14
41-2rsubstearbiaThrease in extensions of credits and grants to
these countries by both the USSR (about $500 million in 1960-61) and
China (about $300 million) emy have been attributable to Sino-Soviet
competition for the fealty of these countries. The outcome of the
competition with respect to NOngolia appears to have been resolved in
favor of the USSR as testified by the resent adherence or Iftgolla to
CRNA.
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The statistics of Sino Soviet trade reflect the
eagariasof Soviet-Chinese economic relations (see Table 7). These
show a relatively steady increase in the volume of trade between
these two countries until 1959 and then a sharp decline beginning
in 1960. As indicated in the table, the level of trade in 1961
marked, a 10-year low in Sino-Soviet exchange. Reflected in the
trade balance figures is the Chinese utilization of Soviet credits
In the early period and repayments beginning in 1956. According
to Chinese budget figures, repayments by the end of 1960 amounted
to scam $800 million, leaving about $900 million yet to be repaid.
The commodities exchanged in Soviet-Chinese trade re-
present essentially an exchange of Soviet machinery and equipment
for Chinese raw materials and consumer goods.. This pattern re-
flects Soviet-Chinese trade tbreughout the period until 1961
when Soviet exports of equipment and Chinese exports of food
dropped sharply as a result of Chinese economic difficulties.
In 1961, Soviet exports of machinery and, equipment to
China dropped by some 000 million and amounted to less than 30
percent of total exports while Soviet exports of petroleum,
maintained at the same absolute limit, rose to almost 50 percent
of total Soviet exports. Soviet imports of food dropped almost
to zero. imorts of manufactured consumer goods also declined
somewhat, but accounted for almost two-thirds of the total in a
smaller volume of total imports frail China.
1;2
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? IV. Trade with the Free World
A. The Traditional Pattern
1. plcaiZgom_eadiVS.....igit_to_nof Trade with
usnwest
Soviet ecanam c intercourse with inftstrialized
non-Communist countries has always represented a time-saving
device, for trade has made possible a rapid shift from an
obeolete to a modern, more productive technology in a large nuMber
of industries. So long as same part of the Soviet economy lags
technologically behind the West, the USSR will always have available
a ready device for buoying its growth rate. In shifting to a more
advanced
?????
i.e., more productive -- technology, the Soviet Union
borrows all the resources, including time, that must go into the
research and development of more efficient techniques.
Soviet trade with the Industrial West today com-
prises the same type of exchange with the same kind of problems as
that of the late 1920's. Soviet aviculture' goods and raw materials
are exported to pay for the technology embodied in Western machinery.
Xn addition Soviet exports mist earn sufficient foreign exchange
to pay for the services of Western transport facilities and certain
indUstrial raw materials not produced in sufficient quantity within
tIle USSR. Any economy whose resources areiconsistently as faly
utilized as are those of the USSR is sUbjedt to overt or repressed
iaflationary. pressures. In the case ,of the :USSR repremJ La-
flation has long been manifest in the chronic tendency of imports
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to outrun exports with the accompanying chronic necessity for
an export of gold.
Tl e fact that the commodity composition of Soviet
trade with the Industrial West has remained virtualLyymeltered
over the past three decades, despite great changes in the volume
aM composition of domestic output, is indirectly the result of
these chrOnic inflationarypmessures. The Soviet economy, subject
to full resource utilization, high investment and rapid growth,
is taut; it is an economy of shortages, one which we would des-
cribe as a "sellers' market." Because of pervasive and persistent
shortages, no energy need be devoted to selling or marketing;
rather, buyers seek out sellers, often on a black rbet '4th the
offer of Messily high prices. Although the Soviets have prawn
themselves to be experienced bargeiters in a situation of bilateral
moricrpoly, they remain inexperienced sellers in a competitive
enrket of differentiated products. Thus, although their own out-
put of highly fabricated goods, especially producer's goods, is
now a much larger proportion of total product than it was 3
decades ago, their exports to the developed countries of the West
continue to be composed almost entirely of raw materials. The
composition of their exports has been stable because they
undble -- or unwilling -- to develop the selling and service
organization necessary to market their highly fabricatediumducts.
It is easier, and therefore in the short-run yields a greater
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return in net foreign exchange receipts, for the USSR to continue
to export the great staple raw materials.
2. Preference for Predictable Markets
There are in the West highly organized. markets (for
uheat or cotton, for example) where the total volume of the commo-
dity perchased and Gold is so great, and the numbers of buyers and
sellers active in the market so large that Soviet exports can
normal.lyte absorbed without causing a flurry. In dealing in such
markets Soviet selling costs are kept to a M111110111M and their net
foreign exchange receipts are that much larger. Moreover, because
Soviet exports are a small part of the total supplies traded on
these markets, the USSR can expand significantly the amount it
offers for sale there without depressing price. These sextets
are additionally attractive to the USSR because the ability to
predict with same certainty* the quantity that must be sold in
order to earn the necessary foreign exchange is a great advantage
for a planned economy.
This same stability and predictability characterizes
the market for petroleum, aluminum, tin, and dianonds, commodities
nffered in increasing quantities by USSR in recent years.
These are atiededstAtredsmrkets where prices remain stable over
relatively long periods of tine and where the quantities of the
commodity handled are subject to fairly rigid direct or indirect
controls administered by the sellers. In order to .in access
to' such markets, the USSR has often bad to lower prices enough
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to attract marginal buyers. These bargain prices have caused con-
siderable concern in the West that the USSR vas attempting to
disrupt the order of the market. Actually, however, a careful
study of Soviet behavior in these cases indicates tbat after
Soviet sales at bargin prices have attained the desired volume,
the USSR hes quietly raised its prices to the level of the market.
It seems quite likely that no one was more surprised than Soviet
exporters when in 1958 Soviet sales of tin were so large as to
cause the temporary suspension of the International Tin Agree-
mut. in contrast, Soviet market research in such fields as
aluminum, diamonds, flax, and, atne'seems tO have been of mnehtigher
quality. Additional quantities of these and other materials have
been successfunyearteted In the West, either with no depressing
effect on price or with only a temporary price reduction.
3. Chronic Problems of Finance
Despite expanding raw naterial sales, Soviet fOreign
exchange earnings have consistently fallen abort of the require-
mmrts of their import program. Since 1950 the USSR has been
forced to sell nearly $2 billion in gold to settle its interna-
tional accounts. Soviet gold holdings and Soviet gold production are
state secrets of the highest order, known prObablycely to a very
taw of the Kremlin leaders. Although Soviet spokmasnlhave done
r)thing to discourage Western apeculation of an immense hoard of
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gold in Moscow which is annually enriched by a huge flaw fran
current output, the fact remains that Soviet behavior in interna-
tional markets is not that of a countzipossessed of a large
reserve. The assiduousness with which they bave cultivated their
reputation in international commercial circles, the promptness
with which they have filled contracts, the eagerness with which
they have pursued new trade contacts bespeak their lang-run
interest in internatianal trade with the West. The vigor of their
bargaining over price, their attempts to tie imports to exports,
their recent search for medium-term credits of increasingly long,
dhration? their pressure for most-Zavored-nation treatment fran
the West, above all the unpredictable composition of their raw
mterial exports which suggests an annual harrying search for
additional foreign exchange earners -- all these bespeak an attempt
to conserve what gpld they have. In addition, gold production
appears to be a relatively expensive operation within the USSR,
rankirig gold sales at the fixed price of $35 an ounce an exceedingly
expensive means of settling international accounts.
Itt thus appears that Soviet eagerness to wall more
to the West is a genuine concern about the an of financing
their imports. Despite this concern, however, Soviet trade
?Triclinia have given no indication of knowing what to do about it.
The only devices for increasing sales in the industrial countries
of the Free World of which they woos to be aware are participation
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in monopolistic agreertmnts or bargain prices. They have gime
no Indication of a willingness to make the Investment in time and
resources neceesery for successful marketing of their highly
fabricated goods at competitive rather than cut-throat prices.
Oh the other 1n4 the ;tromptness with which theyhaveraised
prices once this device has produced the desired result is a
strong indication of their interest in minimizing the cost of
acquiring foreign exchange.
B. The Economic Offensive
Since the mid-1950's the expansion of Soviet economic
relations with the underdeveloped countries of the Free World has
been 12 most dramatic of the many dynamic developments charac-
terizing total Soviet foreign trade.. Until the shift from a
defensive to an aggressive foreign economic policy, Soviet trade
with these areas amounted to only about five percent of total
Soviet trade, and to one-quarter of Soviet trade with the Free
World. By 1962, however, trade with these areas had grown to
15 percent of total trade, and to nearly 45 percent of Soviet-
Free World trade. The rapid expansion of commmlityexchange
between the USSR and these areas was acconeanied by an equally
rapid expansion of other contacts, economic, cultural and
political. The number of Soviet technicians working an various
developmental projects in underdeveloped countries has grown to
nearly 7,000 while the number of students and trainees from these
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areas in schools or institutes in the USSR has similarly mush-
roomed. Whole armies have been provided with Soviet military
equipment and trained in Soviet military techniques, and delega-
tions of various sorts constantly travel back and forth between
the Bloc and the underdeveloped countries.
All this is a eery great change. Before the onslaught
of the economic offensive, Soviet interest in these areas was
probably equally great, but its ability to implement the interest
was limited by domestic priorities. Economic contacts were
largely confined to commerce, and commerce was primarily the
purchase. of certain materials -- rubber, cotton, wool for
*OM*
cash. An export surplus in Soviet trade with the Industrial
West was used to finance imports primarily from the outer
sterling area.
The Soviet economic offensive is an integral part of
Soviet foreign policy to extend Soviet influence. The uncommitted
and politicalkynmetable countries of the Free World, most of
vhichhave recently emergmi from colonial rale with a legacy of
anti-Western sentiment, have offered the Communists the "weakest
links" through which the political and economic encirclement of
Europe and the political isolation of the US could be accomplished.
The immediate Soviet ambition has been to eradicate Western
influence in these newly independent areas and simultaneously to
render them increasingly vulnerable to Commies. At the same
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time the Ccemunitte have hoped to create economic pressures in
Western industrialized countries which are presumed to be depen-
dent on underdeveloped areas for markets and sources of supply.
The economic offensive has employed a variety of
techniques to accomplish its ends. It bas been characterized
by a. pragmatic eclecticism in which offers of trade and various
forms of aid have been combined with propaganda, subversion and
political support. It has provided a vide variety of arms and
militery eqpipnent on credit, the signing of the military agree-
ments being ftaiowed very promptly by the shipment of the equip-
ment and dispatch of Soviet technicians to train the recipients
in its use. The USSR has offered lines of credit fer economic
development, typically $130 million at 2i percent for 12 years.
Most of Soviet foreign aid has specified repayment in either the
exports of the country or in convertible currency, the form to
be determinelbynegotiation at the ties repayment is due.
Soviet economic aid has been used to construct projects as
sizeable as the Aswan Dam or the Bhilai steel mill, and as
modest as small cement plants or work shops. A significant
proportion of total ald expenditures to date has been used to
finance the services of Soviet technicians and specialists of all
kieds. Soviet geologists have surveyed the natural resources of
countries from Ghana and Egypt, through Iraq, Afghanistan anl
)1edia to Nepal; Soviet advisors have been active in key govern-
mute]. Minietries and Soviet engineers have erected a great
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variety of industrial installations and trained indigenous vopula-
tions in their use.
The economic offensive has been supported by a propaganda
barrage equally diverse in its composition. Radio broadcasts in
the tongues of Africa, the sums sast, Asia and Latin America
have multiplied in number, printed matter has been distributed
directly to literate populations, books and periodicals in native
languages have been made available to local dealers at token prices
and wsprint has been sold to yOblishere at prices which could not
fail to curry favor. In addition a progrmm of scholarships for
study in the USSR has brought nearly 6,000 students from Asia,
Africa and Latin America to the USSR since its inception.
Although the USSR has served as the leader and prime
mover, this program. to yin the underdeveloped countries from the
Wast is a Bloc-wide effort. The USSR accounts for about three-
%afters of the total effort, while the European Satellites have
supporbed the Soviet economic thrust and Communist Ohina has
ergaged in a smaller foreign aid program of its own, largely
restricted to Southeast Asia. The countries of Eestern Europe
appear to participate in the aid program both on their awn
account and as subcontractors and suppliers to the USSR.
Since 1959 and 19600 the peak years of the Soviet
economic aid programs the emphasis in Soviet foreign aid has
ahifted back to military aid and technical training. From the
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Apr= fir Rttata2240118 : q1A-RDU9srlap4a8216=1)201-1seen
with minimum costs. First, countries seeking arms are often
deeply embroiled in a dispute, domestic or foreign, and therefore
in the state of turmoil in which Communist agitation gains most
adherents. Second, the sale of arms, on current or deferred
payment terms, costs the USSR little. If the military equipment
sold is obsolete in the USSR, as has often been the case, its
opportunity cost is zero, for it has already been superseded by
an improved model. If the equipment is in current production*
then the amount provided to the underdeveloped countries is likely
to be such a small fraction of total output that its opportunity
cost is slight. In contrast, the opportunities for domestic use
of the resources going into a modern integrated steel plant, Which
are foregone when the plant is sold on credit to another country,
would be much more significant to Soviet economic planners.
Perhaps of prime importance is the potential impact of
Soviet eillimalressistance to underdeveloped countries on the unity
and cohesiveness of the Western flied powers. The prospect of a
politically as well as an economically United Europe has not only
become more imminent in recent months, but more formidable from
the Soviet viewpoint for two reasons. The first is Britain's
recently evidenced willingness to place ties with the six con-
tinental countries of the European Economic Community ahead of
existing ties with mothers of the Commonwealth and the European
Free lisade Area, both of which were created by the British.
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British participation will mean a more potent EUropean Community,
econoodeally and politically. The second lies in the fact that
Communist parties all over the world are deeply divided into 2
groups: those who favor traditional, Stalinist policies and those
mo-caassioists of the Coumunist movement who support Ehrushelevis
revision of the Doctrine. The approach to Western unity could not
come at a ore uncomfortable time for the Kremlin leaders,
struggling as they are with a fracture in their erstwhile monolithic
body politic. Thus Mbeeow, while acting to reinforce the economic
end political bonds existing in Eastern Europe, would place a
special premium in any current development which midht promote
diviseirness among the Western allies. If the provision of arms
to Xndonesia could so examebate the West Irian issue as to cause
a plit between the Dutch and their Western allies, Moscow would
undoubtedly consider the r.seward ample to cover its costs. And
if the installation of medium range missiles an the island of
Cuba could make the US _11(Wcttuf- ih the world arena, economic
calculus would be considered irrelevant.
Soviet Bloc trade with the underdeveloped countries has
been atimulalad both indirectly by the existence of Soviet aid
and the fact of more extensive contacts and directly by Soviet
and Satellite offers to buy and actual purchases of the major
exportn of these countries. The Soviet Bloc has sometimes
contracted to "bm, nearly the entire annual production of the single
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or most important export of a country dependent on export receipts,
and has timed the offer to coincide with a period When the world
price of the commodityr Was especie14 depressed. In this way it
has become the major trading partner of Guinea, Egypt, Nhli and
Cuba. It has further signed long-tarm trade and payments agree-
ments providing for the barter of raw material exports against
Soviet fuel and capital goods. Such agreements are especially
attractive to the underdeveloped countries Whose imports of capital
and consumer goods are dependent on export receipts Which have
fluctuated rather violently with the world price of their export
commodity.
As a result Soviet commodity exohange with the underde-
veloped countries has grown at a rate of 30 percent ayear since
1955. Cotton, rubber and sugar account for 68 percent of total
Soviet imports from these countries. Soviet exports Show a
similarly concentrated commodity composition, with machinery and
petroleum representing one-half of the total. Poughly two-
fifths of Soviet exports to these areas represents credit financed
exports moving under the aid program bile about one.fifth of
Soviet imports represents repayment of past credits, mainly
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Table 8
USSR Stade with Underdeveloped Countries in 1961
Millions of Dollars and Percent
des...wallall..4101......1.01.elowneerarem?00.0.11011,
Value
Percent
11?1?Mill!CONIMICIIMPI?11
Total Exports
? 319.2
100.0
Machinery and Equipment
Complete Plants
wo-.9
17.2
Petroleum and Petroleum Products
3.19.6
3.46
Rolled Ferrous btale
49.4
6.0
Wood and Wood Products
58.8
7.2
Food
83.6
10.2
Other Xhrchandise
206.1
25.2
Total Imports
950.7
l0000
Cotton
122.0
228
Ebbers Natural
Wt.8
23.6
Food
4?342
43.4
Non-farrous Metals
30.0
3.2
Other Merchandise
i70.7
18.o
INS;01.1494.1111=13..
The patbzrn of Soviet ttade within the underdeveloped areas
in part reflects the concentration of the Soviet economic offensive0
rive countries have received 70 percent of total Soviet economic
aid while the entire program embraces two dozen recipients. The-
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Economic Credits and GrantsEktended by the USSR to
Underdeveloped Countries12/
JantarY 39511-11Tune 1962
Killion US$
11?01?110111.191?1.....MMIN
Wen
allas
Latin America
400
......amnaprommwoormonewsemermso
Argentina
100
Cuba
300
Middle East
?12.
Iraq
180
Syrian Arab Republic
150
Turkey
10
United Arab Republic
510
lemon
25
Africa
420
Ethiopia
100
Ghana
95
Wines
65
Mali
50
Somali Republic
55
Sudan.
25
Tunisia
30
Afghanistan
Burma
Cambodia
Ceylon
India
Indonesia
Nevi
Pakistan
Iceland
'Yugoslavia
505
10
5
30
810
370
10
35
ao
5
75
a. Data are rounded to the nearest riveo
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greater importance of Latin America in trade than in aid reflects
the lack of receptivity on the part of countries in the area
(excepting Cuba) to Soviet aid offers. Soviet interest in the
area, however,Windatd in, the volume of commerce. The con,.
centration of aid and trade among individual countries 10 14 part a
reflection of a few large aid contracts. During the years (2956-58)
when Sdviet materials mere being delivered for the construction of
the Ebdlai steel plant, India imports from the USSR more than
tripled in value. The period of heavy deliveries of Soviet goods
for the Aswan Dam began in 3961.
Table 10
Distribution of Soviet Foreign Wade in 1961 and Aid
with Free World Underdeveloped Countries
in 1954-62
vooseatereimIlowomm
Nallion of dollars and Percent of Total
Area
Ebreign Trade (1961)
Economic Aid Deliveries
Value
_122442
PercentValue
Percent
?
?.
Tbtea pi
1,769
100
882
100
Latin America
667
38
52
6
Middle East
368
23.
269
30
Africa
122
7
68
8
Asia
502
28
has
47
Europe
109
6
75
9
a, BeTarairar-'roundco-a-r?ponent---smaynot add to the totAs Awn.
- 57 -
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Concentration of Soviet aid in a few countries reflects
also an increasing selectivitr on the part of the USSR. Although
aid has always been concentrated among a few recipients, in the
early* years of the program, its scope and distribution were
probably more limited by lack of receptivity on the part of the
underdeveloped countries than by Soviet choice. As the program
has grown, as projects have been successfull,y implemented with
no more than normal delays and missteps, and above all since
the Soviet sputniks have endowed the USSR with a new aura of
strength and respectability, the number of countries willing to
accept Soviet aid has also grown. 2he degree of concentration,
however, has remained about the same. At present the Soviet aid
program le concentrated in countries of strategic geographic
location like Afghanistan, strategic international significance
like India, CT countries considered ripe for ?socialism" like
Cuba. For example, since 1960 when the Castro regime in Cuba
adopted an "anti-Imperialist- foreign policy, and nationalised
the means of production, more than one-quarter of total Soviet
aid extensions has gone to Cuba alone.
Soviet foreign aid has -become an accepted tact of life ,
44-caa/tAt, Ug474:-,
231 the underdeveloped world; in tact, it is generally/lability it-?"4 j'"
'
to provide up-to-date industrial equipment and training of all
kinds. Since it hes established itself, the USSR can now afford
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
'Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
to be more selective in dispensing its munifimance. It seems
likely that in the future the Soviet economic aid program will
ebb and flaw in intensity, continuing at less than remit levels
until the USSR sees a new opportunity for an important potential
addition to the Communist fold.
- 59 -
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
APPENDIX TABLBS
Approved For Release 2000/04/18 : CIA-RDP79T010419A002600010001-1
Appro d F r Rtl se:Am:mm(189. MA-411MF'79ff111005)0CP26,0001 001-1
gl 1m ri
'4"? :" qiICI M O 0*ICIP.1 t1743% N t".'
roU
%003 ^0. 00$40; 8.;
tgol gM EP
4 44
gl 1m? 9w: 9R (?-at 09 c!?? c:0
141 as va moq kA 3Y ?ki
44 44 44 44 aa
0
0
0
42
;:f3
lkt! ^9 c?9 179 c"?
-4'. dm
SI :4\4 r& t;
0, 11 9cm tr,m
^
4* rg* ct 91 Si' -4; Ei
C-4 (S1
4
19 179 aZil (1:7 . ? 174' Ia.%
ag tco
te% ga 3W
44 44 074
WW a,
(no,
gtr. 91 -19 91 t".*4; '"\I! ?;""?
I
A M M a 04 0 ig C6.3.
&a aa ,,,,,,, AA -IPA .4'A AA
Cl
. ro? 0 ? 4 CO. ." .9 ? ? 9 Cr1?
? ag g 3g 111 1g
au dtw ob ob, a IP. is
MM MM UNI^ tAtiN LAW%
ilhiJiIIIIJiII
GO
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Table 12
Commodity Composition of Soviet Exports
1955-1961
?
73 ......eni...........?????momememAttlietanglai.W 1 ..ThMartt., ''' 'AA...1:Zr
mo =M.* 4...a....1.1.1. Am...* ...........-...
3
. ..._ 2_
22_ 1756 __
2.0j_ ___L.2,8 22.22_ 1960
< A .0
M
a Value Percent Value Percent Value Percent Value Percent Value Percent Value Percent Value Anent
-11
O AA
-'Total 7Apert3 ti, 3,426.6 100.0 1ALLI 100.0 122121 loox IlLE211 100.0 LA122,1 100.0 5,561.6 100.0 ilv.za
x -71-----
%lag)) chinery and Equipment 22212, siiak 624.4 na, 0.221.3.21,2 /A,8_111 1.3.68.1 2145. 1,141.2 204 564.6 Li
U) a)
O Complete Plants 276.8 8.1 299.6 8.3 321.9 7.3 339.9 7.9 569.1 10.5 568.5 10.2 355.8 T5.9
K3 K3
C)
&Vele, Lubricants and c)
25 Related Materials 329.0 2j. 428.2 11.8 .61.1.1 14.8 651.2 15.2. 797.8 Via 902.5 16.2 1 046.1 grA
44 '
cl; Coal and Coke 97.8 2.9 142.8 4.0 249.5 5.7 219.8 5.1 229.1 4.2 242.1 4.4 284.9 !.7
.. Petroleum and Petroleum co
CI Products 230.1 6.7 284.4 7.9 397.6 9.1 429.9 10.0 567.0 10.4 657.9 11.8 757.8 y.6
5;
330res and Concentrates 115A Iit 130.02.6 gad 4.2 190.0 4.4 215.2 4.0 242l2 4.4 252.6 F4.2
7:1-
0 0
O
3
1 Iron re
.4 81.6 2.4 86.5 2.4 124.9 2.8 137.4 3.2 154.3 2.8 175.0 3.1 187.8
CAD
gftlie Metals and Manufactures lea& 12.6 Au 3.5.0. 2.2.41 ilta ....11 16.1 743.1 ma 837.2 1.2.4 W...1.2 k2.21
a
4=. Ferrous Metals 321.0 9.4 385.7 10.7 439.6 10.0 494.5 11.5 547.2 10.1 642.3 11.5 711.7 E.1)
to
> Rolled Ferrous Metals 192.2 5.6 233.6 6.5 267.9 6.1 329.9 7.7 366.2 6.7 428.8 7.7 478.2
c) >
c) c)
K3 Mon-Ferrous Meals 110.7 3.2 157.3 4.4 202.9 4.6 197.6 4.6 195.9 3.6 194.9 3.5 211.1 23.5
CD Aluminum 19.4 0.6 31.8 0.9 43.8 1.0 56.6 1.3 38.7 0.7 44.7 0.6 58.2 cD1.0
c)
1
c)
in 6.2 0.2c)
7.1 0.2 37.6 0.8 44.5 1.0 38.4 0.7 24.6 0.4 12.2 c)0.2
c)
_.% c)
_.%
2:See footnote at sad of table.
0
Aical
'iiood and(Wood Products
i
CD Lumber
8
._.extile Raw Materials and
co Semi-manufactures 346.1 10.1 329.2 la 305.0 7.,2 223,:8 6.8 308.0 la 358.6 6.4 364.9 gll
297.9 8.7 272.4 7.5 255.5 5.8 238.6 5.6 248.1 4.6 288.7 5.2 283.8 g.7
4*
X4Consuner Goods iTa Via 476.8 1,31 917.7 22,2 665.4 1241 953.5 1/12. m...2 16.2 I 006.5 ate
C3 C)
11
".4 Food 386.4 11.2 369.2 10.2 773.6 17.6 507.7 11.8 755.9 14.6 699.0 12.6 790.4 5173.2
-1 Grain 283.5 8.3 226.7 6.3 566.0 12.9 358.8 8.3 487.2 9.0 467.8 8.4 473.8 337.9
co
c) E3
4. CD Otlaer-Consumer Goods 111.4 3.3 107.6 3.0 144.1 3.3 257.7 3.7 157.7 2.9 203.2 3.7 216.1 ;313.6
_.%
> Other Merchanlise 164.8 4.8 179.3 2.7.9. Etta 4.1 EU 4.1 gia 4.1 204.4 la .2.19.2 2.31
a
a
tn.) Ulm:Specified ?2EA 22,a 660.2 2041 ZIA 12.0 478.4 11.2 647.4 21:2 528- ..2.:1 ,,,..1 ck?
0 ?
CD
CD 4. because of rounding, composenets Nei atria to the totals shown.
-.%
a
a
Table 12
Commodity Coupositioa of Soviet Exports
1955-1961
(Continued)
Million US$ and Percent of TOol
1$57 mit_
Value Percent Value Percent Value Percent Value Percent Value Percent Value Percent Value Pe4nt
mi 2.1 82.1 2.3 2zik
161.7/2,2. 231.1
94.3 2.8 86.0 2.4 135.1
2.2
111.2
2.6
211
240.9
2,.?.
3.1
136.9
3.2
122.1 2.2 lam 212, 163.5 42.7
2?.9 4.8 05.1 161-7
150.4 2.8 182.8 3.3 206.5CD
go,
8
? Cotton
a
0
I.-1.0001.0009n
Table 13
Commodity Composition of Soviet Imports
1955-1961
-a
3
m--- Million US$ snd Percent of_wl
sa. 13
ni -----1226.--.. 122/ 101---- -----1W.......... _1*..2.1-- ---____23---
9. <
M Vsame Percent Value Percent Value Percent Value Percent Value Percent Value Percent Value PerRent
CD 11
cu
(Motel Imports a/ 14241 100.0 Ia.E4i 100.0 alma 100.0 iietka 100.0 2421u 100.0 24.311:26 100.0 2422a loo.o
0
Ochinery and Equipteut
c)
g Transportation Equipment
8
t?Puelss Lubricants and
co Related Materials
_.(1, Coal and Coke
,1$1 Petroleum and Petroleum
XI; Products
C,
-a
..,,Ores and Concentrates
UD
-I
?Base Metals and Manufactures
2e24a
386.3
222.
12.5
825.5
424.2
250.0
8.2
256.4
126.9
4.1
118.8
123.1
4.0
137.5
251.3
8.2
374.6
204.1
ill
288.3
71.0
2.3
145.2
16.1
0.5
88.4
133.1
4.3
143.1
47.9
1.6
32.4
43.5
1.4
46.2
24.8 940.4 3.10.2 ma& Ria 3,321,2 26.6 1,675.2 9.8 1,729.0 *Li
11.6 407.3 10.3 427.2 9.8 542.4 10.7 658.1
la 208.1 LI 212.2I212 Eal 4.6 237.,
77.0
8.6
1.8
85.7
135.2
3.1
145.6
403.5
2.1
331.0
326.5
la
1135.0
183.4
4.2
265.2
127.8
2.9
222.0
133.1
3.1
169.9
39.5
0.9
41.8
54.5
1.3
74.3
_22.28,
1.3.
mu
11.7

534.3
4.2
217.0
1.7
93.6
2.6
123.4
26
280.2
21
50.5
6.6
342.0
3.2
160.4
3.1
163.5
0.6
22.5
1.3
53.0
1:2.
;37 .7
3.3 88.7 2.3
3.8 119.4 34
10.4 1222:1 ma
8.0 Ma Li
-L17-
CD
4' Ferrous Metals
U3
> Rolled Ferrous Metals
CD
C3
IN) Ron-Ferrous Metals
CD
c) Tin
c) copper
CD
-.%
4.0
2.4
4.0
0.9
1.3
a
a Chemicals 2aa.in.,/ mi. 2.1
a
-,
2.% See footnote at end of table.
163.5
4.2
119.5
3.0
127.6
3.2
45.5
1.2
44.2
1.1
7.0.11
12
1.7 93.5
2.9 143.7
.6...2, 314.0
a./
5.2 373.9
2.4 178.8
3.3 172.0
0.8 34.8
1.5 71.9
2.2 1.19..j.
Cg5.9
,742.8
8
.A.2.8
").o.4
00.9
C3
tv
o
0
0
Table 13
Commodity Composition of Soviet Imports
1955-1961
I> (Continued)
73
-0
Million US$ and Percent of 4tta
Am...er ...m.0.12?401Crab
a le9 5 122? M7 120.____
1.?5_2___ 1960 __2_1_96-1
m
11
91
X
awbber atd Rubber fto
lets
o)
a)
Wood and Wood Products
m
Ceextile Raw Materials and
a
a Semi-manufactures
it Cotton
g Wool
gkonsumer Goods
U Food
C/ Other Consumer Goods
.4
Other erchandise
m M
c)
Unspecified
cm
Value
Percent
Value
41.4
1.4
124.8
Z.,2
3.19.
ma
166.4
21,11
216.3
20.1
0.7
54.0
89.7
2.9
90.0
0112
21.6
Liglia
517.1
16.9
487.5
144,8
4.7
336.8
308.6
10.1
365.8
106.5
.8.12
Percent
12.
19.
6.o
1.5
2.5
22.8
13.5
9.3
10.1
Value
Percent
Value
127.7
1.1
21
8.1
182.2
)494.,?,
347.8
104.8
309.3
122.9
127.7
211,2
480.4
433.5
3,22a.
3.1
3.2
32
135.2
107.7
1,161.3
12.2
11.0
10.1
559.9
601.5
397.6
m
Percent Value Percent Value Tampa Value itAls
0
_ 2,2 , 1.2. Aa
4.2 IOLA .196.2 g/2,i
o)
2.4 A.2 1.....2 lo4.8 2..12 124.3 v.i.
116...._
0
m
/11 394 LE 364.4, .6,A 30.4 0.2.
3.1 163.9 3.2 179.9 3.2 130.1 4.2
2.5 100.8 2.0 118.0 2.1 103.8 21.8
2.6.1/ 1,436.5 28.?2 1,577.3 28.0 1,782.6 %.1.6
12.9 542.7 10.7 611.8 10.9 776.0 z3.3
13.8 893.8 17.6 965.6 17.2 1,006.6 117.3
21. 450.7 fia 378.8 .6..a 3!e1.3
23 2211.? 2.2 107.2 2.1 2541 LI 327.8
?
>a. Because of rounding, components nay not add to the totals shown.
a
a
a
a
a
a
a
a
1.- 1.000 1.0009ZOOV6P
-0
-0
.4319.0e,yeslesoluontssevaoniweaaW
CD
Table 3.14.
Commodity Composition of Soviet exports to European Satellites
1955-1961
1955 1956
1957
1958 125.2____
m a
9, Value Percent Value Percent Value Percent Value Percent Value Percent Value Percent Value Pent
(To --.1r"....-
fota1 Exports W 1,792.1 100.0 li.Vizi 100.0 2,549.9 100.0 11222., 100.0 2,950.5 100.0 3411/1 100.0 3,420.1 100.0
.....nr-,
&achinery and Equipment iO4.4 112 218.1 1.113 220.2 8.6 248.4 .1.:_70. 368.5 Ea 414.2 lu. 459.2 ila
K3
c) Complete Plants 129.7 7.2 65.4 3.7 50.4 2.0 51.5 202 87.5 3.0 108.6 3.5 111.3 i/i.3
c)
c)
c)
awls, Lubricants and c)
2zRelated Materials 120.4 LI 163.9 la MA 12.1 321:11 ia....0 351.3 1.1....2 413.7 21.12 486.4 ta
co
i.../ Coal and Coke 64.3 3.6 90.1 5.1 176.8 6.9 153.9 6.6 162.5 5.5 171.2 5.5 204.2
Petroleum and Petroleum
*0 Products 55.1 3.1 72.8 4.1 135.6 5.3 146.3 6.3 187.1 6.3 240.7 7.7 280.2 Eb.2
>
Q
...yea and Concentrates 102.3 la Mil 6.o 153.2 6.0 163.9 7.1 197.0 6.3 206.6 6.6 218.4 i6.4
I3---
CAD T
-i Iron Ore
c) 81.6 4:6 86.5 4.9 124.9 4.9 135.2 5.8 151.3 5.1 170.8 5.5 184.1 J.4
?Base Metals and Manufactures al22,11
.Dh
CAD 122 02.2 17.11415.216j.3. V.5.2 .. a.1 22.?.2. EA .._,..1 &a titi p
?
c) Ferrous Metals 164.3 9.2 193.0 10.9 273.4 10.7 345.8 14.9 392.3 13.3 451.7 14.5 509.7 ts.9
CD
K3 Rolled Ferrous Metals 97.0 5.4 118.2 6.7 173.1 6.8 239.7 10.3 280.8 9.5 328.2 10.5 375.2 gi..0
CD
c)
Mon-Ferrous Metals 85.3 4.8 109.2 6.2 141.9 5.6 109.4 4.7 128.2 4.3 132.4 4.2 145.7 &.3
c)
c)
_.% Aluminum 13.3 0.7 13.7 0.8 25.0 1.0 24.4 LI 21,7 NZ 30.8 54 4547 0-3
c) Tin 5.9 0.3 -4.5 0.3 13.5 0.5 8.1 0.3 8.8 0.3 6.3 0.2 7.8
c)
c)
--lbaliemicals
_.% ga 2.0 .12/7 _AWL AWL 1,41, 52.8 2.3 58.3 2.0 63.2 2.0 Lk? a.2
I>
Million US* and Percent of iitel
a.
1960 1964
See footnote at end of table.
CD Value Percent
ET
u) wood and Wood Products 311 1.1
CD
K3
c) Lumber 4.0 0.2
c)
C)
Textile Raw Materials and
-N Semi-manufactures
_&
o0
.. Cotton
kesmaer Goods
4.1142 ALI
233.8 13.0
at2
14.6
12.9
1.3
Ch Food
262.3
Grain
230.4
(.0
a Other Consumer Goods
23.4
0,0ther Merchandise
c.o
68.0
Unspecified
a
C1)
a a. Because Of rOtill
a
0
12:2
Table 14
Commodity Composition of Soviet Exports to European Satellites
1955-1961
(Continued)
1957
Value
Percent
Value
Percent
Value
2.0
84.6
la
8..2z2
14.3
0.8
43.9
1.7
46.7
262.2
14.8
1111i
221
243.9
229.7
13.0
215.0
8.4
208.3
241.2
13.6
667.9
26.2
423.8
207.1
11.7
597.6
23.4
349.2
121.9
6.9
457.0
17.9
269.8
34.1
1.9
70.2
2.8
74.7
82.1
4.6
81.1
?La
66.1
316.0,
1112
ALE!
12.4
13
13
Million US0e2..Rdiertof491FILi
1958 1959 i6o 1
11
Percent Value Percent Value Percent Value Pacent
87.. 04/ 117.0 2.
CD
2.0 49.6 1.7 58.6 1.9 68.8 02
CD?
Eta 241.8
90 204.1
18.3 660.2
15.1 586.4
11.6 353.7
3.2 73.8
2.8 at2
12.1
SLR
8.2
283.2
22211
6.9
234.0
7.5
231.4
22.4
575.7
'13.3
19.9
497.7
16.0
428.6
12.0
352.6
11.3
279.0
2.5
78.0
2.5
84.8
910e
its!
3?2,2 12.3
489.8
K3
C)
g 8.6
a
it 6.8
Co
?c3.1.2
4732.5
8.2
0
2.5
(I)
ca4.
omponen S may no
1.- 1.000 1.0009Z0
Table 15
Commodity Composition of Soviet Imports from European Satellites
1955-1961
-a
Million US and Percent ofa.
Trital
11 ___ ------Mi---- 1957 al 12 2
_ 1264
22.-- ----.---
S';' Value Percent Value Percent Value Percent Value Percent Value Percent Value Percent Value Perient
(T 0
Eotal Imports 2./ 1 662.8 100.0 21212.1.2 100.0 2.1,914.8 100.0 2,205.7 100.0 &laza 100.0 Raaa 100.0 0,654f 100.0
ryachinery and. F.quipment 733.644.1 .p...12 26.11. 72,12, ma 863..6 3.2....1 1,040.0 ALI 1,286 0. 82 bata
- la. 6
1
g Transportation Equipment 274.6 16.5 269.3 14.8 302.8 15.8 339.7 15.4 422.3 16.8 532.2 18.9 455.2 14.8
c)
K3
a a
4=Fue1s, Lubricants and a
Flo Related Materials 233.9 14.1 OA 12.6 184.6 11 190.1 8.6 209.10. lia glo, iff 1984 al
4b.
't
g Coal and Coke 121.4 7.3 116.6 6.4 86.4 4.5 74.1 3.4 83.0 3.3 90.9 3.2 91.2 4.0
p" Petroleum and Petroleum
,Products 112.6 6.8 111.2 6.1 98.1 5.1 116.0 5.3 126.1 5.0 124.8 4.4 1o6.9 c$.5
I::' 5;
:50re5 and Concentrates 152.9 2..s. 152.5 8.4 140.7 L.3, 160.8 La 122.0 4,8 102.4 1.6 21.2 its.
0
Ise* Metals and Manufactures 37.2 2.2 22:.?. 2.2 3271i. 1.6 2241. 1.6 2?22. 2.2 ..:_fl Inli 126.3
.P. Ferrous Metals 11.0 0.7 13.2 0.7 17.4 0.9 25.6 1.2 44.8 1.8 80.3 2.8 109.7 3
a .6
ROLled Ferrous Metals 4 8 0.3 5.9 0.3 11.2 0.6 10.1 0.5 9.6 o.4 21.8 0.8 35.2
CD
tg .Ph
C)
CD
K3 Non-Ferrous *tale 26.3 1.6 26.4 1.5 13.0 0.7 9.4 0.4 11.4 0.5 14.6 0.5 16.5 53.5
c) Copper 0.3 negl. 0.2 negl. 0.1 negl. 0.2 nogl. 042 negl. 0.1 nag]. 0.1 anel
c, K3
c)
Chemicals
c) ALI 2 a 2 74.1..).i 2.2 A.?. 1.8 41.8 1,2 2.2,Aco
a 2.1 08 Ra 83.8 soli
a Rubber end Rubber Products 3.2ta 12 3.1 0.8 RA 0.9 .1.21,? 12 at.?. 0.8
-4, 21,2 0.8 24.2 00.8
c)
spe footnote at end of table.
Table 15
Commodity Composition of Soviet Imports from European Satellites
1955-1961
(Continued)
3 Million US sod Percent of
CD
4=k
a >
a
K.1 a
co a
a K.1
a co
aa
_% a
a a
_%
a
aa
_% a
. a
_%
1956 41?1111?NOMNIM..., 1957 1958
3.959 1960
-11
CD
potrai Exports42.1
Table 16
e Percent Value Peicent
ci ? 010??????????? on.
7I48 100.0 734.0 100.0 544.1 100.0 634.0 100.0 354.5 100.0 817.1 100.0 167.1 3R0.0
Cal-4,---
Ofachinery and Equipment.?...t.
229.6 MA 304.7 41.6 g/16 9....2 318.0 121 22/1 62.6 20,2 ?la 108.1 6
c)
c) Complete Plants 141.5 16.9 216.9 29.6 209.0 38.4 166.2 26.2 399.8 41.9 373.8 45.7 78-9 11..5
c)
8
.--114vo1s, Lubircants and 8
CO Related Materials 32i2 10.6 86.o laa 2221, 16.6 2gA. 14.6 mu 12:1 1.23.1 114 l
_3 420.7 a
.1 co
ii Petroleum and Petroleum ? ?
31 Products 79.0 10.6 86.0 3.1.7 90.4 16.6 92.4 14.6 117.7 22.3 113.1 23.8 120.7 069
31.
io
Ores and Concentrates 0.2 Ma' 0.2 ma. 0.2 BE22:- 1.2 0.2 L..1 0.1 1.2 0.1 - 0
-.1
C.0"0
-"se Metals and Manufactures e8.u.8 78.1$E4 114).8 au Va 12.1 $4.5 la, 69.8 II 41.2 3a...2.
a
" -i
a Ferrous Metals 60.5 8.3 32.4 6.0 60.9 9.6 48.0 5.0 59-3 34-7 29-4
4=. 75-7 10.1 I..8
co Rolled Ferrous Metals 53.7 7.2 43.7 6.0 21.4 3.9 36.8 5.8 29.4 3.1 39.2 19.3 c:.5.3
4=.
> CD
a
a Non-Ferrous Metals 12.8 1.7 27.9 2.4 8.4 1.5 25.8 2.5 6.4 0.7 10.5 1.3 6.5 )10..8
K.11.6 60.4
CD Aluminum 0.1 meg]. 0.1 meg].. negl. negl. 9.2 1.5 0.2 meg].. 2.6 003
c) K3
o)
?Chemicals 4.8 0.6 2.1 ...9.1. 2.2 0.6 12 o.6 342 0.4 211 1.2 2:1 01.6
a
"
a a
?Wood and Wood Products 3.2.2 1.6 10.8 2..a 6.0 1.3. 212, 0.1 o.6 0.1 o.8 0.1a .412 8113
" a
-0............
Commodity Composition of Soviet Exports to Communist China
1955-1961
Table 16
Commodity Composition of Soviet Exports to Communist China
1955-1961
LSee footnote at end of table.
potrai Exports42.1
potrai Exports42.1
LSee footnote at end of table.
LSee footnote at end of table.
CD
a.
CD
fl) C? onsumer Goods
C,)
CD
K.) Food
a
a
a
Table 16
Commodity Composition of Soviet Exports to Communist Chius
1955-1961
(continued)
122.____
Value Percent Value Percent Value Percent Value Percent Value Percent Value Percent
La 0.8 6.0 0.8111 1.4
1.0 0.1 0.7 0.1 0.9 0.2 1.1 0.2
1958
1959
Million US aud.Percent of oti
1960
a Other Consumer Goods 5.3 0.7 5.3 0.7 6.8 1.2 8.1 1.3
/96IL
nme.ea?
0
Value Peracent
6.6 91.1 ita 0.6 ?:TA
m
0.5 0.1 aegis negl. 63.8 S7.4
1%3
C)
C)
6.1 0.6 4.7 0.6 3.8 21.0
c)
_& .N
orther Merchandise 2.13, 1.1 la o.8 3.:_26. 211 11.2 1.8
ad-
165.5 AU 26742 214 214
Ounspecified 322.4 239.1 ..-atk 120.6 22.2 120.9 2211
P3^ a. Because of rounding, components may not add to the totals shown.
C)
-a
C)
C)
C)
1%3
104
C)
C)
C)
-a
C)
C)
C)
-a
)3.?????allmuc.
Table 17
Cormodity Composition of Soviet Imports from Coenunist China
1955-1961
-0 ...-
3
< _3_,,22,___ 1956 1957 1958 ---_-__10-9-.--.
a
a_ Value Percent Value Percent %raw Percent Value Percent Yaw Percent
-n 01.1043016.0.. 4.49.11M?90?Millin?
0
Elitg 100 11 0 (.4't 2 100 le 0 MA 100.0 883..2 100.03. 1._ cu_LIO. 100.0
=
arMacbinery and Equipaant 1.12:2 1.6 22 1.2 6.4 22 ia 2:2, 12.4 1.1
a)
cf,
(I) Transportation Equipment 10.3 1.6 9.2 1.26.4 0.9 4.3 0.5 12.1 1.1
K.1
a
sFuels, Imbricants and
a Related Materials 2...,22 0.8 2.1 21,1 1.:2 .22 3.42 sla 2.8 242 2.6
.a.
---4
? Coal and Coke 5.0 0.8 2.1. 0.3 1.9 0.32.8 0.3 2.7 0.2 2.6
.H Petroleum and Petroleum
0?Products .. ., nee.. nee. .. - 0.2 neg3.. 0.1 neg3..
F.
i30ree and Concentrates 62.2 la 72..1 2:2 821.2 12.2 AIL) 8.4 /la ??ia 61.2
O
...,i13Base Metals and Manufactures 8_212. 22.8 na 10.2 2.8.12 L2 68.3. Li 62.5 id ati
CD
-I
0 Ferrous Metals 26.3 4.1 27.3 3.6 6.8 0.9 19.2 2.2 7.6 0.7 12.8
a- Rolled Ferrous Metals - 4.7 0.6 2.1 0.3 8.3 0.9 0.3 neg3..
4b.
co
> Non-Ferrous Metals 56.2 8.7 50.4 6.6 51.7 7.0 48.9 5.5 54.9
a Tin 47.9 7.4 32.4 4.2 45.5 6.2 39.3 4.5 41.7
a
K.1
gebmaicala /.1 1.2 32:2, 3..../ 14.0 3.42 ma 2.0
a
a
-Wood and Wood Products
a 0.4 liega. 22 neat .9A mfg. 1.0
c'Eriee footnote at end of table.
-1 Total Imports a/
Killion US
Value
848.1
gzi
0.1
5.0 48.9
3.8 34.8
Percent
0
190.
a
Percent Value P.Nc-ent
100.0 251:1.
Li.1 rota.
CD
? No.
a
a
a
2 -
0.3 2.5 030.5
C)_
742_ 143.11 1720.41
11 42-9 =It
1.5 817 21.6
a
5.8 34.2 cD6.2
4.1 22.4 24.1
(7)
6.6 cAS
a
c0.3.
cr---
1.0
13.:2
1.12.
0.1
1.0
0.1
Table 17
Commodity Composition of Soviet Imports from Communist China
1955-1961
)=. (continued)
73
73
.????=01M.abmgmess.,
(1)
955 1956 1957 1958 1959 <
-11
9, '1
Value Percent Value Percent Value Percent .Value Percent Value Percent Value Percent Value Percent
???????amosmasimmonimiNVIIM
1,
Million US$ and Percent oflotal
X
a)
c7Rubber and Rubber Products 21 0.1 22.,2 La zu 242. 28.1 la all 2.1 11.6 1.4 ilt c7;/43.6
0
CD Textile Raw Materials and a)
K.) Semi-manufacturee 2212. 22 giL6., la LiItp. 6.6 MI ila %,.?. LA 041 Li g.,2 g?, 4.2
a m-..
C)
aa
Cotton - - - . 52.3 4.8 4.0 8.0 81.5
4b. Wool 2-3.6 3.7 23..4 ..8 23.9 3.2 21.2 2.4 21.9 2.0 131 2.3 10.4 s21.9
C)
.Ph
31Consuner Goods 245.0 1111 316.5 41.4 294.8 1212 42111 VIA ftla 2822 516.9 61.2 46.1.2
0..:2
ill! Food 183.5 28.5 209.5 27.4 137.9 18.7 230.1 26.1 219.1 19.9 127.9 15.1 17.4 vg
33 Other Consumer Goods 61.5 9.6 107.0 14.0 156.9 21.3 251.2 28.5 424.0 38.5 389.0 45.9 343.8
0 33
TOtbar Merchandise 170'1- 26.4 190-21 Met 184.3 25.0 162.5 18.14 2.E12 121/ 21:1au
-.1
(.0 -0
0.3. Legae Oil WA. 1.6 0.2 4.1 isti 1.3. o.6 16.8 2.0 Ra i'lli
c;IUnspecified
_%
..-40.---
li!il. Because of rounding, eoMP04#Pts may not add to the to as shown.
U, C)
> 4=k
(I)
a >
a
r..) a
co a
a r..)
a co
a a
_% a
a a
_%
a
a
a
_% a
.
a
CD
0-
-11
0
(D-4ota1 ExportoaJ
FIFFuelso Lubricants and Recn -
a)
lated MMterials
CD
K3
C)
C)
c)
"Ores and Concentrates
o4
0.0 Manganese Ore
F.1
.33Ease Metals and Manufactures
-0
CD
a
a
4=k
CD
a
a
Cr)
Wood and Wood Products
a
a Lumber
a
Coal and Coke
Petroleum and. Petroleum
Products
Ferrous Metals
Pig Iron
Rolled Ferrous Metais
Non-rerrous Metals
Tin
Aluminum
a
a See footnote at end of
a
table.
Table/8
Commodity Composition of Soviet Exportm to Industrial West
1955-1961
- iiliUSI.onandPercentfotz2.
"0
lwr 1958 1959 1960 12?4.___
0
Yalu? Percent Value Percent Value Percent Value Percent Value Percent Value Percent Value Peet
a
21131 100.0 297.2, 100.0 690.1 100.0 669.6 100.0 8,5.5100.0 971.8 100.0 4,2g12,2 1.).0. _
x
bla
85.1 (26.1
c)
ibz2
7.7 1.4 16.2 2.7 21.7 3.1 16.2 2.4 14.6 1.7 14.9 1.5 13.3 41.3
gaa 1.?. 22A lla 1E12 16.4 22.:1, 14.2 A,..5_ 11.2 211.3 11.5 118.6 21,2
fr........
Ig:g z..11 2.9 11.7 65.8 ?..z 33.1 4.9 47.0 5.5 70.9 3:i 13,.g:8 ,T,7.6
.7 5.a 30.3 12.4 1.9 23.8 2.8 34.7 ....1.A
-0-3 -
7.9 1.5 13.4 2.2 17.8 2.6 10.3 1.5 11.8 1.4 18.9 1.9 24.0 -42.3
CD
-I
1.8 26.5 4.4 47.1 6.8 62.3 9.3 48.5 5.7 40.3 4.1 37.7 23.6
10.0
1.0 0.2 21.9 3.2 52.2 4.8 23.7' 2.8 13.1 1.3 1.8 c)
.p.0.2
2.8 0.5 17.2 2.9 14.5 2.1 20.8 3.1 15.2 1.8 7.3 0.8 6.6 CD o.6
>
a
32,a la,a 101.8 4312 145.3, 21.0 143.7 11,1 323,3 31115, 245.8
27.2 5.0 39.0 6.5 49.1 7.1 53.3 8.0 55.0 6.4 57.1
45.1 8.3 62.8 20.6 96.0 13.9 90.4 13.5 252.7 17.9 188.7
12.8 2.4 22.4 llt 28.6 4.1 31,2 Lk 311? 314
5.9
19.4 214.0
.324.
112.4
.221/ 95.3 16.0 14 16.8 152.9 18.4 _gm RA. Ina 1.8.2
73.2
ITV .1 Mk- -83=3 9.8 99.0 10.2
6
.1
-o
-o
3
(I)
Table 18
Commodity Composition of Soviet Exports to Industrial West
1955-1961
(continued)
-a
Milian US$ an4.,. Percent of 411
m
1959 1960 1961g
......2g.6___ jja.. ___ 2251._
91 LL
x value, Percent Value Percent Value Percent Value Percent Value Percent Value Percent Value p_e_er2Lt
(I)
CT
MTextile law Materi'als std 73
w
cc, Semi-manufactures OA 12.0 5.8..4 2,12 42.0 6.1 32.ta I.L2 60.5. /41 72,1 :6,2 52.1 atz2
I?3 A)
a Cotton Fibers 47.4 8.7 34.5 5.8 26.6 3.9 22.0 3.3 39.2 4.6 50.3 5.2 34.7 J,3
a
a
8Consumer
Goods
4=.
al Food
? ? i Grain
g.3
>4r
33? Other Consulter Goods
o
-o Furs and Pelts
-.1
CL)
-I Other Merchandise
a
a Unspecified
4b.
CD
ORR
OA
.12:8
70.0
12.9
47.5
8.8
37.8
7.0
35.6
6.6
68.4
12.6
52.14.212
MIS 2,2:1 135,2 aLjt 32V1 18.4 1:7ll7 20.3. 169.1 Mat Ella
77.4 1.3.0 96.3. 13.9 85.0 12.7 126.4 14.8 117.2
54.1 9.1 68.2 9.9 63.1 9.4 99.1 11.6 85?3
39.6 6.7 39.8 5.8 38.4 5.7 45.3 5.3 51.9
36.2 6.1 35.7 5.2 34.1 5.1 39.9 4.7 44.2
DA. ma f13.2. 12.0 21A 12:2 120.1 14.0 146.1
35.8 6.0 212, 12 g..?. 4.3. !1,./ -2:1 22:1
>
a a. Because of rounding p components may not add to the totals shown.
a
I?3
0)
a
a
a
_%
a
a
a
_%
12.1 358.1
8.8 128.2
5.3 49.2 4.6
c)
4.5 41.4 3.9
1119. 228.4 *11
4.o 6.6 6.2
a-
1.- 1.000 1.0009ZOOV6P
Table 1..9
Commodity Compos:i.ti= of Soviet Imports from the Industrial West
1955-1961
a
rota ImPorts al
c,PANachinery and EquixarAnt
g Chemical Equipment
a Transport Equipment
41=Base Icktals and Manufactures
Co
33I
-0 ^ Non-Ferrous Metals
Copper
co
?Wood and. Wood Products
a
Textile Raw Materials and
> Semi -manufactures
a
a
? Wool Fibers
a Synthetic Fibers
a
a
8 Consumer Goods
a
a
7' Other Werchandi_ge
F Metals
Roiled Ferrous Metals
Pipes
Unspecified
Value
14307
3.81L5.
101.4
222.1
12.3
8.1
1.3
41.1
40.2
41.32.2
324.4
18.4
7.3
43.1
0.11.1?????????1.113,01.11.14
iEggs)AILL42y.d Percent of
1959
1960
Percent
Value
Percent
Value
Percent
Value
Percent
Value
Percent
Value
Percent
100.0
Value
100.0
2788
100.0
67.2
100.0
622.2
100.0
756.5
100.0
1,0696
1,092.2
42.2
229.2
21143.
2.4a
194.1
221:2
22.1.
456.4
1s2a
474-4
0.3
.524?
0.1
7.4
1.1
19.5
3.1
77.8
10.3
135.4
12.7
131.9
23.5
145.7
25.2
97.3
14.5
76.7
12.3
91.6
12.1
121.1
11.3
66.1
12.4
gla
21.8
161.9
26.0
219.1
Els.
im!
37,1
241.6
2.9
.12.0
74.0
12.8
_4111
104.2
15.5
106.3
17.1
175.9
23.3
252.1
23.6
186.5
1.9
65.9
11.4
88.8
13.2
97.6
15.7
94.4
12.5
135.7
12.7
96.5
0.3
2.6
0.4
5.3
0.8
1.1
0.2
68.9
9.1
101.9
9.5
80.8
9.5
9.3
49.1
45.9
8.542.1
7.9
40.5
6.3
6.o
55.6
54.1
8.9
8.7
43.3
35.7
5.7
4.7
45.1
38.2
4.2
3.6
55.3
32.0
11.4
ill
31..0
zit
alt
10.2
il2.4
.?4.252.2.6.21
?42
LS/
/IR
61.2
29.1/
8.1
81-4
4.3
20.2
3.5
34.4
5.1
27.1
2.7
10.2
1.3
48.1
4.5
37.1
1.7
15.4
2.7
15.0
2.2
18.9
3.0
20.1
2.7
12.9
1.2
26.3
10.0
64.3
11.1
64.6
2.
MI
UAL
ICU
1.1.
46.0
id
1315.
ata
22.+,
az2
10.1
/0.19
11.3
81111
111
115.2,
10.8
118.6
10.7
2L/
1/1.11
Lk
10.6
AL/
8.8
1.2
as
2.2
312
i;. Because of roundingo components may not add to the totals *Wm.
1961
Peilent
180.0
fe.1
at.8
5.1
tal
K32.4
coo
a
86.a.
0.
ota
ir
7-4,1
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.6
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0
Lb .3 LI git, g. i
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di1yCx:anyzit:Loa
,ftosiamemkarall?WOMICIP...aueligniNe,ernsimrweog
(t,
a_
Value Percent Value Percent
0
Xt? otal Imports el. Esa 100.0 ,e."6.,2 100.0
wA)Cotton 11L2 8.4 211 355
Niatura3. Rubber z:13. 28.0
a
a
Pood 103.4 !.?2.11 211
a
e? on-Ferrous Metals 0.2 nes 2.1 0.6
Other Merchandise at6
Unspecified 20.0 12 a2.22 15.4
viet Imports
1955-196)
te Italdert;e1,relc d
>
mr..1.,,,awmo.Nwormawommemmo?a?wavomm,,,,,am,002 ,,,,,,,fiammoomm,of MAI:Lan US r% ,rj, .., =1'4 0 I' tyl.....2..I
___1271._.. ____i___,..._ ........_ .A.A2.
a
Value Percent Value Percent Value Percent Value Percent Value Pewent
o
ilaia 100.0 aii2 100.0 27/1 100.0 7-R42 100.0 2a2a ar2
co
122.6 21.2!,2 135.2 M...2t 311.6 12,12 139.4 Ais 122.0 FAI
w
.?.72? ati, 1.31.4 211 144.0 &49. 151.8 god 224.8 EtLs
a
INA za. 3.03.6 .1.2z5 115.0 20.0 232.4 31.8 403.2 stai
8
2.6 s.s.2 20.. La IA1 8.6 45.8 al 2...2 ...2.
INA 26.6 kati nto 145.4 2s.....1 160.1 p_.1_,.2 ma. 136.i
C)
la, 8.8 La 2,/ La 2.4 21 21/L6. FL.9
-0a. Because of rounding, compon. add to the totale shown.
?-?1
C^ D
4=k
a
co 4b.
> CD
a >
a a
K.1 a
o) K.1
a o)
a
0
0 0
-% 0
0-%
0 0
0 0
-% 0
I -%
I
1
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for.14421Cggli..-C91
? ? ? ? ? ? ?
cu Cu curte-armoptoialtr%
? ? ? ? ? ? ? ? ?
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A ? ? ? 440;,....z 0
rree World-Total
A
one4cocotAnn-d- A t...c040%,^AvDco
? *?? ???? ? ? ?????? ? ?0
A3NRgIVMA MelgM-gR4'
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Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
SHISCIZD BIBLIOGRAPHY
affat
Allen, R. Soviet Beanpole Wartime (Public Affairs Press), 1960.
AMbrey, H. Coexistence: Bcomomic Challenge and Response (National
Planning Association), 1961.
Berliner, J. S. Soviet Beanpole Aid: She New Aid and Trade Policy in
Underdeveloped Countries, Praeger, 1958.
Cho:al.:km, P. A. Organization and Techniques of Foreign Trude of
USSR tTraoslated from Russian by joist Publication Research
Service: 1863-N; COO 2657-N), Moscow, 1958.
Goryumov, V. P., et al, eds. Foreign Trade of the USSR vith the
Socialist Comatries (translated from the Russian by the joint
Pdblications Research Service), JIGS No. 969.M, CSO No. 28911W1),
October 1959.
Rayner, M. The Challenge of Coexistence: A Study of Soviet NICOMOMIC
Diplomacy (Pdblic Affairs Press), 1961.
Mikeeell, R. and Behrman, J. Financing Free World Trade with Sino-
Soviet Bloc (Princeton University Press), 1958.
Rove, A. and Donnelly, D. Trade vith Communist Countries,
Hutchinson, 196o.
Spulber? N. The Beano/nice of Communist Baste= EUropes Wilay, 1957.
U.S. Congress, joint Economic Committees 1959 (Comparison of the
United States and Soviet Economies, Part I and II).
U.S. Department of State, The Sino-Soviet Economic Offensive in
Leos Developed Areas. Pdblications No. 66320
Approved For Release 2000/04/18 : CIR-IMIS79T01049A002600010001-1
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
U.S. Department of State, Commmnist Niemand* Policy In the Lees
Developed Axton. Pablicatim No. MO. Washington, D.C.: U.S.
Governmemt Printing Office, 1960.
Waselaki, J. N. Commmnist Ecomomdc Strategy: The Bole afloat
Central Europe (National Planning Association), 1959.
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Apprgtead For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Aysenberg, I. Novyy Valyutnyy Mars ROblya New ftehange Rate of the
Buble)0 Noscov 1961.
Frays L. I. Neshionarodnyye Raschety 1 FinansirovanlyeVissalsmsy
Torgovli Sotsialistichetkikh Strum (International Settleseets and
Financing of Forego Trade of the Socialist Countries), Rogow
1960.
Crenbiz4 D. IL, ed., Pravovoye Regulirovanlye Vneshomyibrgavli SISSR
(Legal Regulation of USSR Foreign Trade), Nbsoov 1961.
Kovrianykh, N. F. and Stegenow, S. kt., eds., Vneshnygya Torgovlya
Stria Harodnoy Dendkratii (Foreign Trade of the Feogle's
Democracies), kbscov 1961.
Lavrichenko, M. V., Ekononichelkoye Sotrudnichestvo SSW so Streamed
Axil, Airlki, i Latinskoy Amaral (romoomic Cooperation of the
USSR with the countries of Asia, Africa, and Latin America)
Ministry ,of Foreign Trade, USSR %mamma Torgovlya la 1955-1959
godlri StatisticheskiySboraik (Foreign Trade of the USSR for 1955-
1959$ Statistical Handbook), Moscow 1961.
Ministry of Foreign Trade USSR Vnesbnyaya Torgovlya se 1960 gods
Statisticheakty Obzor (Foreign Trade of the USSR in 1960, Statis-
tical Survey), Noscov 1961.
Ministry of Foreign Trade USSR Vneehmaya Torgovlya ea 1961 mg,
Statistichelkiy Obsor (Foreign Trade of the USSR in 1961, Statis-
tical Survey), Nbscov, 1962.
- 81 -
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Approved For Release 2000/04/18 : CIA-RDP79T01049A002600010001-1
Semen?, S. D., Ekonomicheskoye Sotradalchestvo i Vaalmorpomosbeh,
Siren Sotelelisticheskomo Lampe Otomaosic Cooperation and Mataal
breistance of the Socialist Camp Countries), *meow 1959.
Sladkowskly, M. I., Oche*" lkomomicheekikh Othoebmi S8R s Kitezrma
(Outlines of the Economic Relations of the USSR with China),
Moscow 1957,
Selected James of the Soviet smartbly periodicals, _AfttgaVie
la!an (Forego Trade)* Voteosy,Eknmonal (Prdblems or
Economics)* Dwell I Kredit (Money end Credit)* aroma" Mammas
1 Mashdonarodnve Otmoshenlya Norld Moon/mar and Iwbmnmettomal
Relations), and others as sell as the newspapers Pravda, Isvestiya*
and Eki.j.oe.cgat.ftp_acheGasata.
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:taL RECENT RECORD IN SOVIET ECONOMIC GROWTH
CHAfTER N
TRIMS IN MB FROWCTION OF CONSUMER GOODS
1 October 1962
.t3Y
STATINTL
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,
COWEVIS
. rnooavoaao o o 0 0. a 1
,
60
00060 060
ao.f.0000lLa; Co ? 99 Ca 5
0 0 0 0 41C, 0 dr ? 0 0 0 Knit outerwear 7.4
33
Oftit underwear 10.5
5.8
WHosiery
a
8Leather footwear 5.9
CD
C)
C)
Ma. Percentages were derived from data contained in the following sources: data for 1951, Promyshlennoste
CD
c) SSSR, Moscow, 1957, pp. 328, 343, 351; data for 1958-61, SSSR v tsifrakh v 1961 godu, Moscow, 1962,
c)
c) pp. 127, 128; percentages for Jan-Jnn 1962 were reported in Pravda, 23 Jul and data for the Seven
Year Plan (1959-65), Pravda, 8 Feb 59.
c)
cib. Percentage increase over Jan-Jun 1961.
c)
?c. Lower limit of the range.
101. Production was 96% of previous year.
e. Production was 98% of previous period.
Average Annual Increase
1952-1958
2.8
8.1
Annual Increase (Percent)
Jan thru jun
122 1962 b/
3;959-1965
7.1 4.8 0.7 2 4.2 2/
7.4
7.7 5.6 3.9 3
dJ
decrease 1.9 1.2 8
2/
10.2 6.5 decrease decrease
6.9 7.4 5.2 6
9.8 7.7 3.3 6
4.3 4.1 3.7
9.4 7.5 5.5 4
8.4
4.0
7.4
10.0
5.6
5.4
Co
0
0
CD
-1
a
a
.1)k
CD
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previously achieved in 19600 but the rate for light industry continued
to decline. The 4 percent increase achieved during the first 6
month period of 1962 and the 5 percent achieved in 1961 are well below
the 6 percent average increase needed to fulfill the Seven Year
Plan, l!t/ and are far short of the 7 percent average annual increase
achieved during the previous seven-year period, 1952-58.*
A. !Mxtiles.
Recent trends in Soviet output of textiles show that fabric
production increased at the relatively high rates of 6 percent and 5
-Percent respectively during 1959 and 1960, but that the rate of growth
dropped off sharply in 1961. increases in the production of fabric
for recent years and that planned for 1965 can be seen in the following
tabulation:
Year
2/
Production of Fabrics
Index (1958.1oo)
(million square meters)
1955
5,402
93
1958
5,823
100
1959
6,178
106
1960
6,467
111
1961
6,505
112
1965 Plan
8,135
140
a. Figures are from Table 2.
-e average-ennual rate of increase for the period 1952-58 was computed
from an index of production of finished commodities and weighted by
retail prices of 1955. The computed index is slightly lower than the
official index of production which is a gross value index in factory
prices.
-9-
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de
'1:12c cline in the rate or growth in the textile
Ged ist'filage part to shortages of raw materials and to other
in Lndustrv i'See Bectton ILp pa 16)0 The testae industry still
oependent on supplies of agricultural raw materials even
gh rellemicel fibers are increasing in the total supply. Shortfalls
Pst-cultutral production of fibers are being felt by the industry,
r ported by plant managers who complain of lagging supplies. 12/
'Alle shortening of the workday from 8 to 7 hours apparently contributed
e increasing strain on the LAillSt17 LA 1961. In addition to
,.oeae er?bie the textile industry is exhorted by planners, retailers,
ce alike to broaden the assortment of goods and to raise
qi01 quality, the accomplishment of which would tend to slow the rate
growth of the industry but wouli increase the effectiveness of
output in satisfying consumer lemand.
flu=ing
the period, 1950 through 1961, the total production
ile fabrics in terms of square meters almost doubled, as
Table 2. Moreover, markel shifts have occurred during this
peviod in the distribution of textiles according to type, in part
indx atioa of a broader assortment. Cotton fabric, which comprised
84 percent of production in 1950, declined in its share of total
.!:dbric to 75 percent by 1961 because of gains in other fabrics,
7)articu1ar1y fabrics of rayon and synthetic fibers. Woolen and
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Tale 2
Soviet Production of Textile Fabrics for Selected Years 1/
1950 through 1961 mad 1965 Pim
milliaa_mare meters
me. es.mrsp,T run M{iM'Aa'0%,i=.8m.,,IME`Ntt:R. ?9.1,..6,0,60,2/PO.AftWellsan.0.1.eate?VMSVIVIOCM.MOia*.MMer.
eottom 2,885
Wool 197
Bayou., synthetic,
and silk 106
Linea 260
1.448
.12/
1955
2/
p58
2/
1959
2/
1.22
.41
1261
2/
12221411
4,370
1,308
4,615
4,838
4,874
5,700
320
385
415
438
455
635
431
690
663
675
683
1,215
281
440
485
516
493
585
5.402
5.821
6.178
6.467
6.505
8.115
a. Production of fabrics iu 1950 and 1955 were converted fran linear to
square meters using the following coefficients: cotton 0.74; wool
1.27, rayon, synthetic, and silk 04.82; and linen 0.92. These
coefficients, derived from official data for 3.958 which were reported
in both linear and square meters, in ElnE2ssatta,mystvo SSSR v
1952_4odu., p. 2450 do not account for possible changes in the widths
Zeta:twice during the earlier period, but such changes if they
occurred wore probably small.
b. Warodapye_yhozywtvo SSSR 111.120 4odit.!? p. 321.
c. 1E1K-
d. SSSR v tsifran :y 12.61,1e1E, P. 127
WaVait",?Erviit ?1959.
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JAnen fabrics made nominal gains .l. Table 2 shows the production of
the major groups of textiles since 1950 and goals for the Seven Year
Plan.
I a both quantity and quality, the Soviet Uaion still has
far to go to reach production levels of textiles in the United States.
Total Soviet production of textiles (measured in square meters) in
1961 was only a little more than half the American volume**, a level
that is nnt adeqaate to supply -- at anything approaching the
censumption staadards of many Western countries -- the needs of a
appulation more than 18 percent larger than that of the United States.
Seale of the factors that contribute to the relatively poor
qaality of Soviet textiles, cam be enumerated. Fabrics generally
eve lighter in 'might and narrower than those produced in Western
aountries. Thread counts are lower, and yarns receive less twist0
Th roes irregularities found in yarns and fabrics result from
thc use of raw materials of low qaality and from a lack of precision
A n the spinning and veaving processes. A group of US specialists
Chexea ii the percentage distribution of fabrics according to type were
aa follows (based an data in Table 2).
Tape of Fabric
Cotton
Wool
1742,y031 p Synth tie I) end s lk
83.7 74.9
5.7 7.0
3.1 10.5
lJnen 7.5 7.6
la 1961 Soviet production of fabrics mum 6,505 million square
aeters (See Table 2) whereas the ,US production easequivalent to
32,100 mil/ion sqpnre meters. 16./
-
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viiPaavegs FaarM to& ?MASI PitaM citIg9 1419A44240 WA/
as follows: 17/
Mills are somewhat concerned about the quality of the
raw cotton they get, but they have to use what is furnished
and turn out as good a product in maximum quantity as they
can. Since they have little, responsibility for the product
after it leaves the plant, they have no strong incentive to
be concerned about anything more thanemeetiug mWetun standards.
C. ClealmAgd_Footwear
Much greater amounts of clothiag and footwear have been
reaching the Soviet consumer in recent years than in the earlier years
of the poet-World War II period. The amount of sewn rnents
distributed annually through the retail stores in 1960 had more than
tripled the 1950 level e o alcoet 8o Percent above the 1955 1evel.Agalfw
of fabrics, on the other hand, have increased such less rapidly --
only 31 percent since 1955 -- reflecting a trend away from home-
sewing and in favor of factory-made clothing. Sales of these
commodities in the state and cooperative stores in recent years
were as follows: (million rubles)
si 70/ hi hi
Commodity
1222
.2.2a
Sewn garments
2,172
3,939
Fabrics s/
3,950
4,566
......e.111.0?11111.1.1e101.161???
4.2513 2.,L62
5,582 7,051
5,619 5,982
a. tiarstime)5140zyartv,0 sgpR,y1958 godp, me 724. For 1990
only, sewn garments Include fur goods.
b. Bared!eye khonyeetvo SSSBJFJOZIodel?, p. 690.
c. Most of the fabrics sold in retail stores probably are SOWS
into clothing either at home or by private tailor/1 or
seamstresses.
* PiGductioi-liata for the garment industry is incomplete. When It is
reported, production of sem garments is based on value added which
excludes the cost of materials. Before 1959 sewn garments were reported
as gross value of production. 18/ The data for retail sales provide a
more continuous series which may be more meentheul for making compavisoae.
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floiAet-made clothing is notoriously shoddy, reflecting the
yiocie quality of materials and waft:unship and the inexperience of the
Aes guats. Much of the factory-made clothing, according to trade
ficials, is unsalable due to n/ow grade sewing, poor finishing,
ard s mplified, old-fashioned, and unvaried styling . . . with
ious defects". AV During a 9-month period in 1961, the Ministry
ii Trade, REUSR, rejected ha percent of the production of the garment
ludustry? reclassifying the goods as seconds. ?2,/ In the knitting
rades? output of hosiery has doubled since 1950, and knit outerwear
and underwear have increased even more rapidly, albeit over a
latively amall base. (See Table 3)
Although production of leather footwourbes more than doubled
1950, neither the quality of materials end workmanship nor
tbe assortment have improved appreciably. In order to meet production
quotas, footwear manufacturers produce somewhat standardized models
:112, a narrow range of sizes as a means of achieving production goals.
stomer complaints concern shortages of particular sizes and the
generally cheap quality that means ultimately a lack of durability.
As for materials, artificial suede and other simulated leathers which
are used to extend the supplies of genuine leather are far less durable
materials, although composition soles probably are an acceptable
oubstitute for leather. A further lack of durability results from
construction methods ; vt often either are outmoded or are geared to
ximum outpat rather than to producing a high-quality product.
-13-
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Table 3
Soviet Production of RbItted Garments and Leatbarrootwear
Selected Years 1950-61 and 1965 Plan
million amen or minion mire
1.11 W
1229, 1222 .120, 2.222 2,960 la; . Alsie
sr.se.elore,gestalAWASNIMInical.26,..mer.10ra,wede.amer.,,.....,
Comm:witty
Leather footwear
203
271
356
'390
419
442
515
Knit outerwear
47
85
97
104
112
117
160
&1t underwear
150
1
346
399
439
472
488
780
Hosiery
473
772
888
926
964
1,000
1,300
a. EETENInnoat' Ego, Moscow, 1957/ PT. 343, 351.
b. SSSR v taifrakh v 12611Lodu, pp. 127, 128.
c Pre?r?vda&eb 159
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D?
The production of consumer durables is increasing rapidly,
heugh the output is still small for household appliances except
Zor sewieg machines and radios. Hausehold refrigerators, meshing
machines, and television gets which have come into production La
large nuebers only since 19500 are scheduled for rapid increases im
the Seven Year Plan (See Table 4). Many other appliances that are
common in the US -- such as dishwashers, clothes dryers, and food
reeer - are virtually enknown to the Soviet panc.
atecks of household appliances by the end of the Seven
:tear Plan in 1965, according to Soviet estimates, mill include 7.6
million_ refrigerators, 12.3 millioa sashing machines, and 40
million seeing machines. 21/ If these levels are reached by 1965,
Soviet officials estimate that there will be one refrigerator for
every five urban households, one washing machive for every three
erten heumeholds, and one sewing meehine for every two households
Chothurbaa and rural). Although this inventoey coapares unfavorably
eith presemt US inventories, It approaehes the current level of
availability of these appliances im the Mt and some of the other
Buropean countries. ge/ Radios, because of their value as means
oV propagaada dieseminatioa, enjoy a relatively ugh priority in
coesumer production and are priced fairly cheaply. Stocks of radios,
according to official Soviet estimates had grown by 1960 to a level
which provided 48 sets per 100 families. Stocks of television sets
provided only 10 per 100 families. 23/
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Teble 4
Soviet Production of Consumer Durables
Selected Years 1955-61 and 1965 Plan
rrare 0..B.47.1.8V,R49.42.116...76.61611216.14.3110.41.0MMAII.,400.7. no.
1950 2221 2221
Sewing machines 502 1,611 2,686
Refrigerators
Washing machines
Radios
Television sets
1.2 151 360
0.3 ti7 464
1,072 3,549 3,902
12 495 979
thousatwis
W12.112/131 2/
22226O 1 221 g a
20941 3,096 3,292 4,550
426 530 686 1,450
648 896 1,236 2,570
4,035 4,165 4,229 60000
1,277 1,726 1,949 3,300
nettesammems.,nactv...412.?....timia=--,. 0.106waraalleir...7.2use....almare ,acsoramon.roassuValUdicamts.a.aleXareVarvanr..vouweeamir..-?
a' aE21M212-a2z
b. SSSR tsifrakh v 1
a. liyia_vdt..7 FRE 1959.
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Although consumers in the USSR are anxious to own appliances
aEd other durable goods, they usually must wait many months for delivery
and are often dissatisfied when they finally obtain them. Few of these
items would be salable in retail markets in the United States.
Appliances on the whole are poorly designed, crudely built, and
subject to breakdowns. Soviet refrigerators have a small amount of
anably7; space in relation to their size and weight. The washing machines
are simple in design usually with roller wringers operated by hand;
some have motor driven centrifugal spinners; and a small part of the
production have simple timing devices. Electric sewing machines have
been so unreliable that many housewives are returning to treadle
machines stile a good portion of the newer models rust in warehouses. EY
Even in the urban areas the usefulness o' appliances is limited by the
undependable nature of the Soviet supplies of electric power.*
Both the availability and quality of Soviet appliances
have been influenced adversely by the preoccupation of planners with
heavy industry. Instead of plants which specialize in appliances,
production has been relegated to subsidiary shops of plants that
specialize in other types of machinery. Production is pimply organized,
there is little coordination among producers, and inadequate
* Problems oTrzatic flow of current and fluctuations in voltage
which have been reported result ia part Sr= inadequate wiring and
improper distribution of current. More than 800,000 voltage
stabilizers for use in operating home appliances were bought during
1959 alone. g2/
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,pocia]iz^tica has led to high eoses. Until these deficiencies are
-,'tified. Soviet consumers will find that household appliances, on
,
whole, axe scarce, expensive, and of pcor quality.
Curreat Growth Problems and Prospects
Strains now being felt by the consumer industries apparently are
esused by factors which are numerous and complex. The sharp decline
the rates of growth of the textile, clothing, and footwear industries
la 1961 coincided with the period following the shortening of the
eerk day from 8 to 7 hours, but other factors including shortages of
materials, ed failures in investment also contributed to the
line. Jew great has been the effect relatively of each of these
Actors canaot he determined, but collectively they are probably
:i'6aponsible for the lower rate of growth.
A- Materials Shortages
i:Iroviding increasing quantities of raw materials is one of
the factors limiting the groeth of light industrial production
ent and ie. future years. JUdging from past experience in
A;eeduction of textile fibers by Sovietagriculture, fulfillment of
.?
e in likely to fall short of tle Seven Year Plea goals. Moreover,
rca if goals are reached the output of natural fibers will basely
support the plaaned increase in textile fabrics . For example, the
Se- - Tear Plan requires that production of cotton fabric increase at an
?10.1al rats W! 4,2 to 4.7 percent, whereas the plan for output of cotton
::lbers yew:area an increase of 3.8 to 4.9 percent. 2:6,/ Soviet planners
do reconizo that Soviet agriculture can no longer, as it has in the
Ft7st
supply fibers in adequate quswitIties to support the planned
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expansion of the textile production. Thus future goals for textiles
are based on the assimption that rayon and synthetic fibers can be
produced in quantities adequate to supply the requirements of the
industry over and above that which agriculture can produce. Production
of rayon and synthetic fibers is scheduled to grow at the rate of 22
percent annwelly during the Seven Year Plan. 37/ Wbolen plants in
partivalskr are to rely on large quantities of synthetic fibers, and
cotton mills are to use synthetic fibers suitable for blending.
Production of agricultural textile fibers in recent years
has been slowing down; plans frequently are underfulfilled, particularly
in years of adverse weather conditions. The following tabulation of
production of textile fibers shows the output of cotton in 1960 and
1961 Was lover than the level achieved in 1959; annual increases
In wool have declined for the past three years; and produation of
flax fiber: fluctuates from year to year.
Year
..N.M?tl,MA
thousand metric tons a
Cotton
Oinnedly
Wool
Igrase).
Illivaltamt_hetic
Flax fibers
1955
1,290
256
110
381
1958
1,450
322
166
438
1959
1,550
356
180
364
1960
1,430
357
211
425
1961
1,510
367
250
403
a. SSSR v tsifrakh, 1961,Nassim.
to Converted from the weight of seed cotton at 33.3 percent
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Although no figures arc avilable currently on supplies of
xtile fibers reaching the textile mills, shortages of raw materials
reportedly are responsible for production failures in some areas in
1961 and 1962. Ey Evezt so, the 'USSR exports large amounts of cotton,
mainly to the East European satellites, an export volume which varies
between 20 and 25 percent of Soviet domestic production each year.
Although increasing requirements at home appear to strain the ability
of the USSR to continue such extensive export, these commitments
appear fairly rigid as indicated by theemport pattern of the past
10 years. 22/ Cotton imports on the other hand have increased
somewhat in response to growing demands of Soviet light industry,
but exports still are far greater -- actually twice the size of
imports in 1960. 19./ Wool is alao in short supply because of
failures in domestic production. Soviet production of wool in 1960
and 1961 increased by 1 percent and 3 percent respectively, compared
with an increase of 12 percent in 1959 (See tabulation above).
The fulfillment of future goals for light industry thus depends
in large part on a lagging agricultural sector for supplying increases in
natural fibers and on a heavily burdened chemical industry for
supplying rayon and synthetic fibers.* Should agriculture and the chemical
industry fail to meet the requirements of light industry, the official
* A sharp ialetion in the growth rate for rayon and synthetic fibers
was announced for 1962 -- from 20 percent implied by the Seven Year
Plan to 12 percent. 31/
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prograa for increasing the supplies of textiles and clothing to Soviet
consumers would be placed in serious jeopardy. In this event, Soviet
planners would have to look abroad for large quantities of textile fibers
with which to supplement domestic supplies.
B. hew Level of Tedtmtlegx
The low level of technology which characterizes much of
Soviet light industry can be attributed in large part to the fact that,
in the allocation of investment funds and resources, light industry
has been given a low priority. The Seven Year Plan prdvided some
improvement in the allocation of funds for light industry relative to
other main branches of industry (See III C below), yet this higher
level of investment apparently is not great enough to constitute
a significant rise on the priority scale. Allocations of funds
for the Seven Tear Plan period and the preceeding 7-year period for
the light and food industries are compared with allocations for other
selected industries as follows:
1959-1965
2/ 1952-195812/ 1959-1965 IV in percent of
Branch of Industry (billion rubles), rubles,'201:1).2,9_5
Light and food
4.o
8.0-8.5
200-212
Machine building
6.6
11.8
180
Ferrous metallurgy
4.1
10.0
245
Oil and gas
7.2
17.O-17.3
235-240
a. DS Joint Publications Research Service: TS: 14,600 Ca ital
Construction: A Statistical Collection, 26 Jul 1962, p. 18.
b. In pricesof 1 NI 1955 adjusted to the new 1961 rate of exchange.
l9
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Thus, the share in investments of the light and food industries
(representing personal consumption) is less for both the 7-year
periods than the shares respectively of the machine building, ferrous
metallurgical, and oil and gas industries, and the increase in the
Seven Tear Plan for the light and food industries is less than that
in two of the heavy industries enumerated.
Because light industry has been starved for resources over
the years, technological improvements have been slow to develop and
as a result, labor is used extensively, including much hand labor.
The number of industrial workers in Soviet light industry, ranks
high in the total of industrial workers for all of Soviet industry,
being exceeded only by the number of workers in the machine building
and metalworking industry. Of the 18.6 million Drpitiveumwwc.s.....1 capAlg46
in Soviet industry in 19600 light industry employed 3.4 million or
18 percent. 2/
Even lv the textile industry, which is more advanced in
the mechanization of processes than are the clothing and footwear
industries, much '...arger numbers of workers on the whole are used for
given operations than in US textile industry. The size of the
industrial labor force for textiles in the USSR is far greater
than that of the VS textile industry, but the Soviet output of
textiles is only about half as great. Ratios for the two
,
pronmeuenuorkers (rabochiy) employed in Soviet light industry in recent
years were as follows:
(thousands)
1955 2,158
1958 2,515
1959 2,579
1960 3,311
The increase of 792,000 workers in 1960 over 1959 reflects mainly the
integration of the producer cooperatives into the state industrial system.
Source: ly(1?2gsole khousyEtvo 126.0.1edu, p. 217.
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countries have been reported by the Soviet writer, S. A. Kheynman, for
cotton fabric in 1958 showing Soviet production at 56 percent of US
productioa,Aut the Soviet labor force reportedly was 87 percent greater
than its US counterpart. 3y
Measurements of labor productivity in the various branches
of light industry are difficult to make because of the lack of data;
figures on the Soviet industrial labor force, in particular, axe
scarce. However, some comparative research in labor productivity
has been made by both Soviet and US writers. A comparison of the
productivity of labor in the USSR and the US has been made by the
Soviet writer, A. Eats, which shows that the Soviet output per
production worker in the textile and footwear industries, ranged
from 38 to 44 percent of output per production worker in the US,
when comparing US ratios for 1956 with Soviet ratios for 1957.
Data from the Kate study are as follows:
Branch of Isch9lEx
ei Unit of
Measure
22101 .per Worker
us USSR USSR in percent
Sl956) (1957).. of US
Cotton fabric
linear meters 20,052
7,712
38.5
Fabrics of rayon,
synthetic fiber,
and silk
linear meters 19,668
7,512
11/
41.5
Wool fabric
linear meters 3,411
1,443
42.3
Footwear
pairs 2,527
1,112
44.0
a. V. A. Zhamina, Edr., Ekonomicheskoye sotsializma c
1962, p. 200.
b. As reported in the source. Using the data for output per uothor
as presented in the source actually yields 38.2 percent.
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The ratios obtained by Kats, however, are high when compared
with results obtained by Western researchers. To the advantage of
Soviet statistics, the Kate ratios are based on output offabric in linear
meters which ignore the fact that the VS fabrics are wider than Soviet
fabrics in all cases. Thus, comparatively, the US output per production
worker is understated for each of the various fabrics. The measurements
made by Gertrude Schroeder for 1956* based on output of fabrics in
square meters shove Soviet output per worker much lower then the Kits
figures. For example, the Schroeder comparisons show Soviet output
of cotton fabric per worker to be as low as 23 percent of the US
output as againut 38 percent derived by Kilts. Similarly, the ratio
for mom, synthetic, and silk fabrics vas 27 percent compared with
42 percent derived by Kats. In opite of the wide variation,
however, the low output per Soviet worker shown by both of these
measurements, reflects the large inputs of labor and the relatively
low level of technology of Soviet light industry.
* The output per production vorker in the USSR and the US vere
reported as follows: (1956)
Ratio
Commodity Unit USSR (USe100)
Cotton fabric
square meters
24,838
5,798
23
Rayon, synthetic
and silk fabric
square meters
22,524
6,164
27
Wool fabric
.square meters
4,377
1,815
41
Footvear (except
rubber) pairs 2,672 1,046 39
Source: Gertrude Schroeder, "Sem Measurement Problems in Comparing
U.S. and USSR industrial Labor Productivity". eaper presented at
the International Conference on Labor Productivity, Lake Como, Italy,
1961.
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Aacognieing the general backmardness of their consumer
utrie, Soviet officials aspire to emulate the technological level
or the more advanced consemer industries abroad, mainly that in the
United States. Procurement of textile plants and machinery from
14i/2e-tarn eeeefacturers plays a major role In expending the capacity
f the Soviet consumer industry, particularly the textile industry,
and has the added advantage of contributing to the technological
advanceaent of the tadustry as well. Furthermore, the purchase of
mechinerv abroad lessens the preesure on the machine building plants
at Italia end at the same time saves costly reseerch and designing
time 'byemaking possible the outright copying of the mcst advanced
exedeas pranced by Western industry.
Mthough Soviet purchasing officials have Indicated a strong
leterest ia and preference for US textile processes, mainly those
uelmg synthetic fibers, they also are purchasing textile machinery
fran firms in West Germany, the UK, Italy, and Japan, in addition to
that imnorted free the East European satellites. Imports of machinery
for light industry, largely textile machinery and eqpipment? has
iecreased rapidly in recent yearn, the total in 1961 reaching 57 million
elhlea as compared with 20 million rubles in 1958. W By contrast,
the tBSE?appeare generally less interested in importing technology
end equipment for other breaches of light Industry, such as the
garment keiteear? and footwear braachee that in general are even
more beekvard than is the textile traneh. Plaened Improvement in
the teChnology for light industry thus is centered primarily in the
epleming and weaving of textiles.
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0, fnvestmeut of Capital
Plans and Performance
, _ _ _ ? _ ?
Lerner amounts of investment ftlas have been allocated
to Soviet light industry for the construction of new plants, the
expansion of existing plants, and for is and re-equipment
than have been, invested during earlier plans. Investment in state-
owned enterprises of light industry, as originally announced in the
Seven Year Plan, totaled 3.3 billion rubles* or 2.6 times the investment
of the preceding 7-year plan (See Table 5). Still this allocation
of funds apparently was not sufficient to support the expansion
progran scheduled for light industry. In 1960 Khrushchev called
billion
for additional investment funds of 2.5/to 3.0 billion rubles to be
allocated. not to light industry alone, but "for the development of
the textile and footwear industries, (and) their bases for raw
materials and machinery construction . . ." .g/ The division of this
investment atong the various industries -- light industry, agriculture,
and the chemical and machine buJIAIng Industries -- was not announced
but directly or indirectly, light industry will profit from all
these investments.
In Doric of 1 ally 1955 adjusted to the trey 1961 rate of
excbanao. 'Tne
producer cooperatives were still operating outside of state industry
when the Seven Year Plan began and thus their investment plans are
ant reflected in the original plans for investment in light industry.
By the end of 1960, the cooperatives had been integrated into the
state system presumably adding their onsIl share of funds to the
investment t:ands allotted to light Industry. .56/
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Table 5
Capital Investment in Soviet Light Industry
.9;14 1$.n.1.0.1`05,
Million
ni
Mewed
Investment
Ratio
of Planned Investment
1959-65
to Actual Investment
,Ikiblee
Actual
Investment
_Mtg..-
1959-65
1952-58
'fetal light Industry I)/
1,260
3,300 ,51
2.6 to 1
Text13.es rii
900
2,500
2.8 to 3.
Cotten
385
780
2.0 to 1
awn, evnitnalti and silk
74
710
9.6 to 1
Wool
3.33.
385
2.9 to 1
Other 'textiles sil
310
625
2.0 to 1
Enitwear and hosiery Li/
53
185
3.5 to 1
8121A magnesite Si
89
178
2.0 to 1
Leather footwear It/
218
437
2.0 to 1
a. In prices or 1 July 1955 adjusted to the new 1961 rate at exchange.
b. Teketlyriart...Emplillsontosty no 3., 1959, p 9.
ko originally armounced. Investment subsequently has been increased0
d. str.oiteltstvo, no 9, 1959, pp. 2, 3.
e. ReaMuni.
fc Estimte baze.d.o inforaaticei contained in
shveypalia przgyshlissnost jp no 6, 1959, p. 3.
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The 1961 investment plan 'which provided the spectacular
tnerease of 54 percent (reflecting both the new allocations of funds
and the trannfer of investments from the cooperatives) vas under-
ruifilied, according to official reports, and an increase of only 18
percent achieved over the previous year. The plenned increase of
33.5 percent for 1962 17/ does not appear to be especially high
considering the need to make up for the investment failures in /961.
Because of failures in bringing new plants into
production on schedmle, a re-evaluation of the construction program
as early as
aas undertaken/ 1960. The nunber of new textile plants scheduled
for conntruction were reduced and emphasis shifted to the expansion
of existing plants and to modernization of machinery anl production
processes no For example, nyw textile plants originally planned
for construction in 1960 were reduced from 36 to only 15. 1?/ The
rising cost of expanding the capacity for production is most
pronounced in the construction of complete new plants (as opposed
to modernization) where the costs of building and ancillary facilities
are added to those of machinery and eqpipment.
241,-Ftial-%,cPRt?PF-FIMRP,P=
According to official planning figures, light industry
is becoming more cepital-intensive. A reflection or the cost of
expanding the industry is seen in a shift in the marginal capital-
output ratio. For the Seven Year Plan in relation to the preceding
* Induntry officials note that reconstruction of plants in light
industry takes one-fourth to one third the investment of capital as .
does the conntruction of new plantn ;. for equivalent increases in output. 32/
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7-year period, the marginal capital-output ratio, derived fran Soviet
over-all plans for light industry is calculated from official data as
0.40 in contrast to 0.16 for the earlier period, as shown in the
following tabulation:
a/ E/
Increments to Production Capital Investment 2/
Period _SEillion RdastALL (Billion Rubles b/) Ratio
1952-58 7.64 1.26 o.16
1959-65 (planned) 8.33 3.30 o.4o
.901.1.10311,441111.60110. 1111,01..*11.111., WM.-TM
a. Tekstil'unITLyalstqlennostl, No. 1, Jan 1959, pp. 2, 3.
b. In prices of 1 July 1955adjumbadto the new 1961 rate of exchange.
c. Derived.
Although the ratio for light industry as a:whole for the
Seven Ter Plan is more than double that for the earlier period,
ratios for individual commodities would probably vary considerably.
For example, in cotton textile production the change would probably
not be as great as in anew and expanding area such as the processing
of synthetic fiber into yarns, knitgoods, and fabrics. Thus, the
relatively high ratio of capital to output reflects the changing
technology in textile processes, the substitution of capital for
labor, and, in part, the lag between new investment and the resulting
gain La output, rather than a definite decline in the marginal
productivity of capital. In this branch of industry, major increments
to production may be forthcoming in subsequent periods beyond the
Seven Year Plan,
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Plapving,and_Administrative Weaknesses
Centralized planning for consumer needs, as it exists in the
LOSR, has been established in a clImate of scarcity; whether such
planning can work efficiently where the supply of goods permits a
greater degree of consumer choice is yet to be proven. So far there
is little evidence that Soviet planning can cope effectively with the
problems of growing consumer requirements without broad revisions of
present practices in production and supply.
Iaventories of consumer goods at the production plants and
in the trade network have increased rapidly, almost doubling in the
period 19554960. Stocks of wool fabric, sewn garments, and leather
a
footwear have grow tiparticularly rapid rate during this period,
although stocks of cotton fabric have grown very little, a development
which suggests that cotton may be more acceptable in quality or
price, or 'both, tham some of the other commodities. The following
tabulation shows the growth of stocks in wholesale Us& organizations
ayAd in industry for important
consumer
125.2
items in recent
years: (in
mAllion rubles)
Commoaitx sit
Cotton fabric
271
267
282
Wool fabric
151
185
289
Silk fabric
154
223
274
Sewn goods
84
155
324
Leather footwear
96
106
214
!arodoye khozyaystvo v SSSR v 1960 odu, p. 699.
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Although recent organizational changes in planning and
tration of light industry have improved its operation, many
problems remain. Through the decentralization of Soviet industry in
1957, the pinioning functions of the Ministry of Trade for light industry
vere transferred chiefly to union and republic planning bodies
gospnans)*Itebile the regional sovnarkhozes took over the administration
of the industry and assumed only limited planning functions. itil/ Later,
in 1960, the producer cooperatives (collective groups of artisans and
handicrafters) operating outside of state industry were placed under
the administration of the local sovnarkhozes, a move which further
increased state control over consumer production.121/
Such administrative changes, while improving the direction
of the industry added other problems, particularly in coordination.
Production goals and allocations of materials, in large part, are
controlled at union and republic levels, whereas the administration
and management are mainly the responsibility of the sovnarkhozea.
In practice, plant managers claim, the USSR Gosplan sets up the
aggregate goals for production taking no account of the increased
cost of changing the assortment, such as providing more working
cepitel,ldbor, n&,. the like. Thus, plant manna= An 11123, the
assortment in response to orders from the trade organizations may
run the risk of failing to meet over-all plan goals. Because of
------
Exceit for long-term planning which in April 1960 was transferred
from Gosplan, USSR, tothe State Scientific Economic Council
(Gosekanomovet), USSR. 42/
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this, plauts tend to narrow rather than to broaden the assortment of
goods produced.
The distribution system for consumer goods in the USSR is
notoriously inefficient because of the inadequacy of fends, lack of
modern merchandising eqpipment, and because of organizational
'weaknesses. Consumers are accustomed, but not necessarily reconciled,
to alternating gluts and scarcities of goods. In recent years a weber
of changes have been introduced in planning and administration,
particularly in the state trade system, in order to meet more
effectively the requirements of consumers.
eiece 1957, details of assortment, design, and quality
have been worked out by sovnarkhoz officials, and factory managers,
workeeg with the trade representatives. y.,1/ Orders for goods by
wholesale and. retail organizations on contract include detailed
specifications as to the kinds of goods and the delivery dates.
While individual store ma era have thus gained some voice in
determining the kinds of goods they will carry on their shelves,
strict obseryeece of contract terms often_ increases the burden
of tho produeors.
'While the assortment of goods is planned regionally or
Locally, the aggregate goals and the allocations of materials to be
used are planned centrally. Plant nanagers, thus are obliged to meet
output levels set by Goeplan (with :penalties for failure) while at
the working level they are at the mercy of the trading organizations
who pleee orders, but who also can :the:we these orders according to
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ueed, and ultimately to reject the goods if they fail to meet
specifications. yil Such a multiplicity of organizational authority --
interdependent, over-lapping, and tangled in detail -- presents a
range of problems of coordinatica which planners have been unable to
solve in the past and which may be expected to increase in intensity
as the assortment of commodities expands.
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leading
e V8611, witch now ranks c?s efworld power, the consumers share
the tfftal product of industry is still too small to satisfy their
ic requ
ements, in spite of the gradual rise in the level of
lAving that has been achieved, line.er the existing system of
o-kities for investment funds and other resources since 1950, light
bas grown more slowly then total industry and slower still
cexigmrnd with 'Cue machine building branch of heavy industry. Nevertheless,
by 1960: light industrial production had grown to 2.5 times the level
1950, almost doubling the output of textiles, more than doubling
ieAe output of leather footwear and hosiery, and increasing at an even
faeter rate the output of kmitwear and sewn garments. Still these
ewaa far from adequate when measured either by consumer
g_atisfaction or by the official standards for optimum consumption.
Peesently light industry, growing at a rate below that needed
to reach the 1965 goal, is producing half the textiles and only a
tittle more then half of leether footwear needed to reach the norms
vhich Khrushchev has pledged to achieve by 197o., Even the production
required by the Seven Year Plan, should it be reached, is still far
ohort of supplying the prescribed norms as shown by the following
data per capita.
k961
Te..mttles (square meters) 29.9
Leather footwear (pairs)
4.965Jsm
35.2
2e0 2.2
...Cs.na_iti_oit_ual Nora
58.1
3.5
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Tor apparel Soviet coasumers are receiving much more factory-
?tiling them ahey did in earlier years. Retail salts of sewn
almost 80 percent above
1960 mc2e / the 1955 level, mhereas, sales of fabrics
ferg1t70;-14
e- period increased only 30 percent, indicating that as the
of factoryenade clothiag increases, the need for sewing at
heae aed by private seamstresses and tailors is diminishing
eieles the radios ard sewing mecines which are fairly common
out the USSR, many urban householders in recent years have
eenuired their oen television sets, refrigerators, at washing machines.
aeaever, the appliances are of poor design, by quality of construction,
ee - undependable operatioa to the exteat that many of then would not
be salable in Weatern markets.. By 1965 Soviet officie]s estimate
households
et for each 5 urban / ehere will be one refrigerator; for
each 3 urban households, one mashing machine; and of all Soviet
houneholds, uetaa and rural, half will have sewing machines. Few
alants -pzciaLize in household appliances, production being relegated
dtead to subsidiary shops of machine buildirg plants that specialize
other types of achiaery.
Soviet 11ahe industry recently has suffered a decline in rate of
eeowth, falling from an increase of 9 percent In 1959 to an increase
ok 4 percent during the first 6 months of 1962 over the corresponding
aeriod in 1961. The preseat rate of growth thue is below the 6 percent
average annual iacrease required to meet the 1965 goal and is also
below the 7 percent achieved annually in the preceeding 7-year period.
Cortributing heavily to the decline in rate of growth are shortages
of raw materials aad failures im achieving the investaent plans.
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,q0vte sgrj.culturc mew be uaaale mdeepately to meet the
tz of Uo textile inaostrv ia the future Is a probability
rL 7
pixnaiv4g ofYJefi_alt appareatly accept. The output of agricultural
ff,:bera recently has inoraased et a decliming rate, increases for
both cotton &Ed wool falling in 1960 and 1961 far below the increase
acal;?eved In 1959. Light industry thua must rely more heavily on the
oonaagricaltural types of textile fibers -- rayon and the various
tyoes of synthetic fibers which are now being developed.
The low technological level at which Soviet light industry
operates is reflected by high inputs of labor and a relative la lov
Jawastment of capital. Light ledultry's share of investmaat, even
7dlem coMbined with the food industrools still below the-,%-ATCS
respectively of the maclOsae buildtag, ferrous aaaallurgicalo and oil
e.viV1 gas iRdustries for both the Seven Year Plao and the 7-year period
aroceedtao it. Because of its techno:agical lag, the Soviet liabt
?Joalustry compares poorly wIth that the US, the annual output per
Soviet production amountine to lem than balf of that of his U6
.counterpart. .1') help in raiaing the level cf techuology, the USSR
is importing modem machinery and Piquipmitnt frali 11.11/8L Western
countries -- mainly the US, the UK, West Germ", and others as
well as fraa the Fast European satellites.
On balance, the Soviet consumers' lot hso improved gradually
over time, but the prospects are that future gains &Liao vill be gradual
in spite of the growing desires of connumera for more and lietter goods.
Soviet light industry, which continues to build gradually oa
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heverats of pis' veers, is becoming increasingly burdened with
woblems of expansion. TO increase the capacity for production and to
aviae enough raw materials to support it, is the tlsk of the
-ecent and of the future.
Irr
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JIVIA
! )0 o Mogcow. 14'; Oc.Wber 1959
10 Deceffber 1959.
rravda. 9 Auguat 1960,
.r.loted in the New.York_Time, 21 ne 1961,
'A'Ommunist. No. I, 1961, -r:f
6, TekGtiL1nava promvithlennost' No. 10, 1960, p, 1.
7 Trud i zarabotnaya plata, No. 1, 19591 pp. 9-16,
..._ _
11 ftavda, 1 Jun 1962 and Pravda, 25 Sap 1962.
_ .
9, Pravda, 19 Uetober 1961,
1,(L Pravda, 6 My 1460.,
Planovoye khozveyetvo. No, 6. 1965, pp 51-63.
12, Tovarovedeniye promyahInnirkh i nrodovol'etvennykb tovarov, MORcow,
,.rp Y. ? ?
1955 Pp- 368-174 anct U. S, Eureau of Census, Facts forinduatry,
? ? __?
"Woolpm and Wortd Woven Goods". M22T. 3-1-8 Supplenwnt,
.3 4arch 1959,
:vestlya, 14 October 1960.
11, Pravda, 8 )br-Ilerv 1959
5kst11'neya nromytihlennoa',o 12, 1961. pp. 1-4.
16. 1? S. Bureau of (encu, Stat1-;ticE,1 Abstract of t13.1. United States.
1.962, p. 797,
17. 14. S. Departmnt of Agricultuy,e, Foreign Agricultural Service,
totton in the Sovfat Union. ;1"un 1959; p. 10,
_
Sovetqkw _torgoviya, Februar7 1960, p. 26,
19, Sovetskaya torgovly.a" March 1962 p,
pp. 10-13,
Pi. Planovoye khov,ve.y!'Atvo. No< 12, 1.9s9, p, 23,
22, U. S, rlepartmert of Commerce. "Pu;'dn'l and Defews Services
kdmini)14tration) M. HouReholci. Appliances,, September 060, p. 105.
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T,CPrgaTTIY.1 ? 4o, 1I 1961. ? 44.
_
torgovlyA, 30 January 1962.
27 May 1960.
-
_Pravda. 8 14'.,bruary 959.1.
9'eksti1Enava promvIsleancat'. Bo. 12, 1961, pp. 14.-
1S Joint Publications Reearch Service:
4IES/7JC-349 Voreignyrade of _the USSR, 1956, 4 november 1958, pp. 22, 40,
3EMS 526-D, Foraiga7rade.or theUSSR,_1958, 17 February 1959, pp. 21 , 37
11-.1S 6220 Ieoreign Trade_of 1 bf.i_USSR,_1959, 14 november 1960, pp. 24, 41.
H349 Foreign 7-C-rad4. of the USSR. 1960, 5 April 1962, pp, 27, 49.
)Lbid,
3A, PrRviia. 8 February 1959.
32, Narodnoye khozvaystvo y 1960. godu, t, 217.
SO A. Cmgaulastslya poilmodetva prOikvod?t1 ai?ttruda,
31n,?,shnays. torgovlya soyuza SSE za 1959 god, passim.
bay tnr,croviwi, fAnyuza SSR za 1960 god, passim,
Tekstil'naya promyRnilunost' no, 10, 1960, p. 1.
SSSR v tsifrakh v 1)60 godu, Pt =;10 312.
Pravda, 7 December 1961,
Ekonomika strciteltatva. 1950p 13
9
39 Flanovoye khozyaystvo, No. 5, 1957, p. 1.
40. Ekonomika stroitelsirva, No, 1.1, 1960, 1, 13.
41. SSSR v tsifrak v 1950 aodu. VDo 310, 312o
. . "
2.
Planovoye khozvaystvo No, 1, 1960, p. 91.
k3, Pravda, 28 Novimber 1958.
_ _
44. Ibid.,
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