ORGANIZATION, ACTIVITIES, AND RELATED MATTERS REGARDING THE COUNCIL FOR ECONOMIC MUTUAL ASSISTANCE DURING 1957 AND EARLY 1958

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00246A027300050001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 62
• Document Creation Date: December 22, 2016
• Document Release Date: April 6, 2010
• Sequence Number: 1
• Publication Date: May 23, 1957
• Content Type: REPORT

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ORGA1IZATIDN, ACTIVITIES, ANI RELATED;. MATTERS
.REGARDING THE COtNCII. FOIE ECON?Ib
MUTUAL ASSISTA1CE'DURING.1957
AND EAY& 1958
GLANDES'-IN.E . SERVICES
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?
ORGANIZATION, ACTIVITIES, AND RELATED MATTERS
REGARDING THE COUNCIL FOR ECONOMIC
MUTUAL ASSISTANCE DURING 1957
AND EARLY 1958
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TABLE OF 2ONTENTS
Subject
Page
THE ORGANIZATION OF CEMA
3
The Plenary Session
3
Ad Hoc Meetings of the Country Representatives
6
Deputies of the CEMA Representatives
6
The CEMA Secretariat
9
Standing Committees
11
The Working Committee for Economic Problems
18
Observer Countries in CEMA
18
A
CEMA RELATIONSHIP TO GKVES 19.-
EFFECTIVENESS OF THE CEMA ORGANIZATION 19
METHODS OF SOVIET CONTROL OVER CEMA 21
CEMA LONG-RANGE PLANNING ACTIVITY 23_
? CEMA ACTIVITY IN UNDERDEVELOPED AREAS 21y--
CEMA RELATIONS WITH CAPITALIST CQ? NTRIES 26
INTRA-BLOC CEMA PROBLEMS 28
THE WORK OF CEMA DURING 1957 29
From January 1957 Until trc Eighth CEMA Plenum 29-
The Eighth CEMA -Plenum 31-
Coordination of National Economic Plans until 1960 32
Activity of the Deputies During the Second Half of 1957 33
Coordination of Long-Term Plans 36-
CEMA Fil;:i_e,s on Bloc Deficits (1958-1960) 37
CEM A Co?Z ;acts with Tnternat? onal Economic Organiz6rtions 41
A&e ,d., of the Meeting of Deputies on 18 October 1957 42-
The Mee -.-.ng of the Standing Committee for Foreign Trade 42-
The Wolrk of the Standing Committees 47
CLASSIFICATION AND HANDLING OF CEMA DOCUMENTS 49
ANNE= NO. 1 CHARTER OF THE MEETING OF THE DEPUTIES OF THE
REPRESENTATIVES OF THE CEMA COUNTRIES
A= 40. 2 TABLE OF ORGANIZATION FOR THE SECRETARIAT OF CECZA
AM= NO. 3 CHARTER OF THE CEVIA SECRETARIAT
S-E-C-R-E-T
51
55
58
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ANN* S-E-C-R-E-T
ORGANIZATION, ACTIVITIES, AND RELATED MATTERS
REGARDING.THE COUNCIL FOR ECONOMIC
MUTUAL ASSISTANCE DURING 1957
AND EARLY 1958
THE OBJECTIVES OF CEMA
1. The Council for Econ(nic Mutual- Assistance (CEMA) (Sovet Ekonomi-
cheskoy Vzaipomoshchi) is an organization of which the following
eight states are members: the USSR, Poland, East Germany, Hungary,
Rumania, Czechoslovakia, Albania, and. Bulgaria. There are official
and unofficial purposes which CEMA is to implement. The official
purpose of CEMA is to facilitate economic coordination among the
member countries; to make the member countries' economic efforts
more productive by eliminating wasteful competition and by central-
ly planning the overall effort of the Soviet-Satellite economic bloc
tnwa_rd the ultimntP anal_ which Is to outproduce and economica.,j,y
replace the capitalist counies 'Iie unoi ficial function of CEMA
is political Fu"e"pxg_ind,tcatesxthat a strong effort is
eb ingg made to stri the individual cou #~r es of their national
economic independence and to make them depgndent,on the other member
countries. A typical exanple of this objective is the recent empha-
son restricting the specialization of certain industries to those
countries best qualified to-develop and produce this specialty. For
example, East Germany (DDR) has been designated as the CEMA member'
country which is best suited to develop the chemical industry, so
other member countries will be prevented from investing in the field
of -chemistry. Thus, the Polish chemical industry will-suffer be-
cause its future development will be restricted. Poland, therefore,
will be dependent on the DDR for its supply of chemical products.
The specialization policy and similar CEMA policies create an economic
situation which makes the Satellites completely dependent upon one
another and on the Soviet Union. N~ ~tur ly, h _1nter pendency..o.t-
bloc countries.will discourage future- attempts,.atpolitical fraction=
`tzation and. 'will aid " in-'keeping the bloc together ,as . a harmonious
political, economic,'and military unit.
THE ORGANIZATION OF CEMA
The Plenary Session
The plenary session is
- scheduled-for 15 April 1' 8 most likely in Bucharest.
2. The highest authority and the directing body of CEMA is the
Council Plenum, wh_cz_mects at least once a year. Eight such plenary
sessions already'have taken place and the ninth plenary session is
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a meeting of the chairmen of the State planning committees of the
eight CEMA countries, conferring together with their respective
staffs. Each State planning committee chairman has a minimum of
one advisor, and a staff of from five to ten persons. Important
questions which must be discussed in closed circles are taken up
at sessions where only the principles, plus one or two advisors
each, are present. The Council Plenum, is called into session by
the Secretariat of the Council after coordination with the CEMA
country deputies and with the offices of the CEMA standing com-
mittees.
3. The plenary session of the Council provides general policy guide-
lines., or directives. These guidelines are contained in the
protocol of the plenary session. Every standing committee receives
a copy of this protocol, and since there are guidelines for each
committee in the protocol, this constitutes a direct means of
guidance from the Council to the standing committees. Directives
are issued outlining the functions and activities of the CEMA
Secretariat and instructions are given to the deputies of the CEMA
countries authorizing them to supervise and coordinate the policy
decisions made by the plenary session. The subordinate organs of
CEMA are the Secretariat, the deputies, and the standing committees,
which must comply with the policy directives and instructions
issued at the plenary session. However, among the subordinate
organs it is not entirely clear as to which body is responsible
for directing the activities of the others, and serious juris-
dictional disputes have arisen.
4. Typical of the substantive matters discussed at the plenary session
is the problem of specialization and development of specialized
industries in the respective CEMA member countries. Each country
has been' designated to pursue its own specialization in those
industrial branches which it is most qualified to develop. For
example, the C. was instructed to develop its machine construction
industry; the DDR'was designated to develop, the chemical industry; and
Rumania was instructed to develop the petroleum and gas industry.
At each plenary session the extent of compliance with the decisions
of the previous plenary session is discussed.
5. Insofar as the member countries themselves are concerned, the
decisions of the plenary session have the legal status only of 25X1
recommendations. One problem thus far has been a tendency to dis-
regard principleeelaid-down in the plenary session of the Council
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and failure to take them into consideration in drafting national
economic plans or in carrying on trade. There have been many
instances of noncompliance with the decisions of the plenary
session by various individual countries. For e~cample, the Dot
promised to_deliver to the CSR a certain tyke and quantity of
production in the field of machine construction. On the basis
of this DDR_ promise of delivery,: the CSR stopped the production
of a particular type of machine tools. When the DDR failed to
produce the promised goods, the CSR had to initiate a new program
of industrial investment to Pro duce the required machine con
struction equipment. As a result. the CSRhas_suffered losses both
in time and money. The CSR representative-in CEMA has made a
complaint in Moscow concerning the DDR's failure to fulfill its
obligations. Another such complaint was made by the Poles when
the CSR failed to deliver certain _.item$ _ f mijit6j:yr pxo4luction.
A similar complaint resulted when the DDR failed to deliver a
large quantity of canned foods to Bulgaria. Another example of
lack of cooperation amongCEMA, countries occurred when
expressed an interestTin:buyingcertain machinery from'the Soviet
bloc. The CSR, the DDR,and Poland were actually underbidding
each other in order to clinch the deal.
6. The following topics will be discussed at the. plenary session
of April 1958:
a. Coordination of long-range plans.
b. Coordination of specialized industries, i.e., decisions as
to which country is to specialize in a particular field of
production.
c. Participation of the Standing Committee for Foreign Trade
in the coordination of long-range plans. Every'standing
committee.is.obl.ged to present a report concerning ite
particular endeavor for,the present year and the coming
year. Now they are also obliged to present a report in
which the long-range planning activities of standing com-
mittees are indicated.' The Standing Cbmmittee for Foreign
Trade has neglected to pay attention to long-range planning.
An effort will be made at the plenary session to correct
this deficiency.
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d. Discussions concerning the Soviet proposal to make CEMA
decisions a matter of law in the member countries. N. M. Siluyanov
stated that the proposals for the agenda of the Ninth CEMA
Plenary Session, in April 1958, are now being discussed in
the CC/CPSU and.will be submitted to the Soviet staff of the
USSR Deputy for presentation at the plenary session)
Ad Hoc Meetings of the Country Representatives
7. In addition to the annual plenary sessions there also are less formal,
ad hoc meetings of the CEMA representatives, i.e., the chairmen of
the State planning committees. These meetings concern themselves
with partial questions or more detailed questions that could not be
clarified in the general framework determined by the plenary session;
and which must still be clarified individually. These meetings alsoi
concern themselves with matters which may have come up in the stand-' '
ing committees which are beyond the competence of the standing com- 1
mittees, or concerning which no agreement coup be reached. The
meetings also frequently discuss problems concerning the creation
of new committees, or the determination of tasks to be performed .by
newly created committees. This group has executive power and can
make decisions.
Since the chairmen of the State.planning committees cannot remain
in Moscow and must return to their own countries, each appoints a
deputy who becomes the permanent delegate from his country at the
CEMA headquarters in Moscow. The statute for the deputies is
given in Annex No. 1, page 5ij The present deputies are as
follows:
USSR - N. M. Siluyanov
Poland - W. Slusarczyk
East Germany - K. Opitz
Hungary - D. Osztrovszky
Rumania - " Gheorghe Cioara
Czechoslovakia - V. Balaban
Bulgaria
- Spc.ciu Ruka sic, possibly Shahin Ruka
- W. T. Belomyshev
a _r r D V Jib
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9. 1ach of the deputies- has a staff consisting of a few cdvieors,
secretaries, and interpreters. The size of these staffo ranges
from six to ten people. This staff se'rves as the country secre-
tariat or permanent representation of the member country at C
heedquertera in 1bscow. The individual deputies are responsible
to the country representatives (chairm-an of the State planning
committees) who appointed them. It is the country reprboentativeo
themselves who are responsible to the other plenary seooion members
for matters concerning C 1MA decisions. They attempt to carry out
these decisions by giving appropriate directives to their deputies.
10. The deputies of the MIA countries meet in conference once a woeL~.
Sometimes, when there are urgent questions, they reset twice or
three times a week. These conferences are presided over by a
chairman who maintains his chairmanship for three months,. after
which time the next deputy who follows in alphabetical order be-
comes chairman. In the deputy conferences, as well an in confer-
ences held by the Secretariat and standing committees, the Soviets
usually carry the most weight and are generally considered by the
other members-to be the guiding power.
4
11. In these conferences the deputies make decisions and work out
then discussed and must be accepted unanimously before it can
established by decisions of the plenary session of the Council.
Decisions made during the weekly conferences usually begin with
a resolution presented by a member country. The zesolution is
specific proposals for accomplishing the general objectives
become a deputies' decision. Before such a resolution is ac-
.
eepted by the individual deputies, they discuss tea merits of
the resolution with their advisors, who frequently obtain a
country. Prior approval of the respective State planning com-
mittees is net required, however, before a resolution can become
a deputies,decioion. At the end of the deputies conference,
a protocol, is drawn up and is signed by all of the : ?A deputies.
1nough copies are made so that each deputy can send one to the
chairs of his State 'planning committee. The State planning
committees then keep the decision in mind when planning for their
national economy.
1P. At their conferences, the deputies also deal with proble~re arising
in the field of jurisdiction of one or more of the standing com-
mitteeo. Such discussions may involve establishing or clarifying
the statute of one of. the otending?com ittees, or investigation
and clarification of a dispute. CAM country deputies have no
L.._.~:
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e2secutive power with regard to the standing committeeo. They ctn
?not issue orders, to them. However, they do play a role of coordi-
nator when problems arise in the standing committees.
13. Then points of diepute'erise which the standing committees cannot
resolve themselves, the committee concerned will inform the CI-IM
Secretariat. The C Secretariat informs the deputies. The matter
is then discussed and clarified by the deputies. Each deputy
reports the resulting suggestions, expresses opinion, and givuo cJ1vi(po
to the chairman of the State planning coaittee of hio own country.
In eomz cruces this also 'mar involve consultatio l with the minioter
of his government responsible for the matter uer dipcueoion. The
chairmen of the State planning committee may initruct the deputy to
adhere to, or to revise, positions previously taken in diocujoion
of the problem. Then the matter is sufficiently clarified, the
final decision will be made by the representatives of the CM
countries, who will inform the MA Secretariat. The DM Secra..
tariat will then direct the decision to the 'standing co ttee or
committees concerned and also will inform the deputies.
14. In many cases disputes within secretariats of the standing cc
nitteea are not handled in ';.he way just described. The country
repreoentative in the secre?aritt of the standing committee sy
refer the matter directly to the m:.nieter in his country reoponoibls
for the matter under discuteion. The minister may then settle the
dispute at the next meeting of '.--re standing committee, or he w-V
refer it to the chair. .n of the State planning committee of his
country for decision. If the chair= of the State planning -cow
slittee cannot se the the matter hm;,elf', he mV take it up at tha
next plenary oeooion or at the next meting of the representativeo
of the CEVAT countrier.3; _TX this direct approach is .used, frCO the
secretariat of the eta ~U.ng camittee to the minister, the miniotor,
or the chairman of the State planning committee, may decide to cm-
' ou1,t the deputy and to ask hie opidton. However, the opinion of
the deputies is purely advisory, not binding.
15. In the deputy conferevice:., the Policth delegation tries to adv ncco
ito own national interests. Someti to the conferences become vor
heated discussions when t e Poliesh national interest is being
diorogarded., The Polish deputy has held up meetings for hours
because he did not wish to give in on any point which was re a
as detrimontol to his goverwent's interest. He receives very
detailed guidance from the Polish State planning Co ttee and is
?ocger to comply with hio country's policy directives when repro..
oenting his country in the oeosiolo of C=" deputieo in Noocow.
&ecioiono of the deputies'confer:nces mot be based on unanimity.
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If there is not unanimity among the deputies the conference
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stalemated because of a veto b one of its members.. Then the
ve o m ar 3:s:ask~d to Gorier aga n with his own country, i.e.,
his own State planning committee, and the subject matter is again
taken up at the next conference session. Usually a compromise is
made because the vetoing country has either received new instructions
from its State planning committee or the other deputies are willing
to compromise in their demands.
16. The CSR deputy on occasion expresses his national interest and takes
issue with some of the Soviet proposals. More frequently, however,
the CSR deputy sides with the Soviet representatives and agrees
with their proposals. The DDR delegation usually supports the Soviet
delegation to put proposals across. There is considerable cooperation
between the Hungarian and'DDR deputies, not only in the conferences
of the CE14 country deputies, but also in the sessions of the stand-
ing committees. During conferences they present a unified stand and
sometimes influence the Polish deputy to support them. The Albanian
representative is not taken very seriously. He usually agrees with
the Soviet proposals and plays only a minor role during these meetings.
The Albanians are; usually treated like inun ture little brothers whom
one must take by the hand and guide along carefully. They have certain
? privileges not shared by some of the other countries. For instance,
the Albanians do not need a Soviet visa. They simply travel with their
own passport to Moscow without having to go through the formalities
of requesting USSR or other-Satellite visas. The Bulgarian deputy
frequently tries to advocate his own country's national interest and
is occasionally successful.
The CEMA Secretariat
17. The Secretariat of CEMA, headed by A. A. Pavlov, currently ha a T/O
of 71 persons. 5f. Annex No. 2, page 55 for a breakdown of the T/Oj
These staff members include, among others, deputies to Pavlov, clepks,
and secretaries.' In addition, there are advisors for the z3ub jects
covered by the standing committees. Because of new tasks that have
been written in the working plans, the Secretariat has proposed that
its T/0 be increased from 71 to 108. The increase was proposed with-
out concurrence by the State planning committees, but the State
planning committees have been informed and thus far have neither
objected nor made additional suggestions. The Secretariat meets at
least once a week, or more often when necessary, to perform its
duties. The Secretariat has at its disposal a ruble fund to which
all member countries contribute. Every country pays a set share
into this fund, which is converted into rubles, because the workers
of the Secretariat are paid in rubles. The amount contributed by
the individual countries is.not known. The workers of the Secre-
tariat of the Council are well paid, and they are the highest paid
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CEMA employees. The workers of the secretariats of the countries
are paid by their own State planning committees. The standing
committees also have funds for the payment of the responsible
secretary of the committee and the workers of the secretariat of
the committee. The individual countries contribute to this fund.
The workers of the committee secretariat are then paid in the currency
of the country in which the committee has its seat.
18. The Secretariat, according to its statute, ff. Annex No. 3, page 58_,7
carries out work-that is designed to secure the most effective
activity of CEPS. In carrying out this responsibility, the Secre-
tariat performs the following duties: prepares basic materials
for plenary and. deputy sessions; insures the preparation of basic
materials required for analysis of the most important economic
problems; participates in?the'preparation of basin materials con-
cerning the coordination of plans for the major interrelated branches
of the national. economies of the participating countries; organizes
special meetings to deal with matters which are not under the
jurisdiction of standing committees and which touchion the.'intereats
of a number of member countries; receives from and distributes to
CiMA organs those basic materials on economic plans that are neceo-
sary for CEMP work; presents surveys of the economies of the par-
ticipating countries and statistical bulletins on plan fulfillments;
oversees the work of standing committees and renders any necessary
neip; prepares comprehensive working plans of MIA organs on the
basis of their decisions and submits them to the deputies'.mretingo
for discussions; disseminates to the deputies' meetings for con-
firmation the most important questions of the working plans of the
Secretariat; presents to CEMA organs the most important question
brought out in international economic organizations; and inforzo-S
the public via press releases on results of collaboration and mutual
assistance of the participating countries of CAA.
19. Thus,_the Secretariat attempts to uids and coordinate the activitico
of C T4Aor subordinate to the Council Plenum. However, its
relationship to the deputies and to?the standing committees is not
entirely clear-cut. Both the deputies and the Secretariat appear to
have some of the same functions with respect-to the standing com-
mittees. Both bodies claim to be the one charged with giving
guidance and direction to the work of the committees and with co-
ordination of that work. In actuality the degree to which either
organ performs the function varies with the problem. The Soviet
view, quite correctly, has been that it is difficult for either
the Secretarial; or the deputies to give real direction to the com-
mittees because the committees are composed of high functionaries.
The committees exe made up'of ministers,,State secretaries, or
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division chiefs. So a of the delegates to the committees are Pt y
presidium members. VZoreover, the secretariats of the standing
committees have real technicians, real experts. Therefore, the
moot that either the C Secretariat or the deputies can hope
to do is to perform a supporting and coordinating role.
20. In this role the Secretariat polls the various committees cone
the nature of their plans for work and registers the question
to be discussed. Naturally there are questions which can be ool od
only by the cooperative efforts of more than one standing comaittoe.
For exeple, problems pertaining to the production of certain typed
of machines may involve the Standing Committee for Ka-chine Con-
otruction and the Standing Committee for the Petroleum and Gas
Industry, as that industry may be the customer. The Secretariat
registers the views of the committees dead forwards them to the
deputies, who look them over, send them home to the appropriate
ministers in their governments, and then at the next conference
of the deputies `recomeendations concerning what could be done
better.
21. A. A. Pavlov, the chairman of the Secretariat (Secretary of the
~`oumcil) is supposed to guide the work of the Secretariat and re-
present CET7C at-official 'functions..,- not .only of Soviet Bloc states
'but also those of Tectern countries. It is believed that he
a`ppa[nted y, ~ receives instructions__fro L Pavlov b-nz
been in this position for the past three years. He is a Soviet
and the official senior representative of C] to other inter-
national organizations. Since December 1957 he has been ill
an out of the fi .. He has two deputies, a Pole and a C och; his
duties are being carried out by'one of his two deputies, 0. I.
]Rozaa ki, a Pole. Nozenski.has been in the Secretariat the to sot
and exerts a certain influence which limits the effectivoneoo of
Standim Committees
'22. The standing committees are the most important working bodies of
CDR. It is in these committees that the details of planni g
ana technical coordination are worked out, Kure 'people are end
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in that work than in any other activity of the organization. The
technical competence of the standing committees exceeds that of
the Secretariat, the deputies, or of the country representatives,
for it is at this level that-the specialists work on detailed
problems. The committees are composed of ministers, or, in the
case of less important committees, of State secretaries or chief
directorate chiefs, who meet once or twice a year to deal with
specific, technical problems in their own areas of responsibility.
Each minister serving on a committee informs the State planning
committee of his own country concerning questions on which he
regards reporting to be necessary. Such reporting may go through
the deputy and.the country secretariat, but it may also go direct.
Sometimes the reporting goes both ways. The competence and prestige
of the committee members, and this direct reporting, makes it
difficult for the deputies,-who are below the ministerial level,,
to coordinate and guide the work of the standing committees.
23. These committees constitute a direct link between ministries in
the member countries and CEMA. The Bulgarian Ministry of Agri-
culture, for example, c may_ not address itself directly to the
Council Plenum.' By working through the appropriate standing
committee, however, it may. have its problems considered by the
Council. There are currently thirteen standing committees of
CEMA located in various capitals of the Soviet blot. Each of these
standing committees is composed for all CEMA countries of
specialists from the respective ministries responsible for the
particular specialization. The following is a list of the thirteen
standing committees of CEMA:
a. Standing Committee for Power, located in Budapest.
b. Standing Committee for the Coal Industry, located in Uaraaw.
c. Standing Committee for the Petroleum and Gas Industry,
located in Bucharest.
d. Standing Committee for Ferrous Metallurgy, location unknown.
e. Standing Committee for Non-Ferrous Metallurgy, location unknown.
f. Standing Committee for Geology, located in Moscow.
g. Standing Committee for Chemistry, located in Berlin.
h. Standing Committee for Machine Construction, located in
Prague. The chairman is Polacek, the CSR Minister of Machine
Construction.
j li
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Standing Committee
for Defense Industry, located in Moscow.
Standing Committee
unknown.
for Timber and Cellulose Industry,
location
Standing Committee
for Agriculture, located in Sofia,
provision-
ally headed by the Bulgarian Minister of Agriculture,
Ivan Primov.
1.
Standing Committee for Foreign Trade, located in-Moscow.
chairman is the Soviet Minister of Foreign Trade, Kabanov.
,The responsible secretary is a Soviet, Afanasyev.
The
m.
Standing Committed for the Delivery of Complete'Plant Units,
located in Moscow.
with capitalist countries or with other bloc countries. All trrade,
e fore, is-coordinated in this committee.. The other standing
committees coordinate with this committee. For example, the Stand-
ing Committee for Delivery of Complete Plant Units advises the
-secretariat of the Standing Committee for Foreign Trade what type
of business.it proposes, where it will deliver, etc. At presents.
other committees whenever foreign trade enters the picture, either
24. The Standing Committee for Foreign Trade concerns itself with the
the Standing Committee for Foreign Trade is bein_ ushed_to_coama
up with its lone range plans, which thus far, it has refused to
under^because the other committees have not advised it of
their long-rare plans, which it needs before it can make its
own plans The Standirua Committee for Delivery of Comte Plant
vely_=with Soviet bloc trade with the
West, where co~lete factory installations are involved. It
also handles the delive of industrial roductive units to the
underdeveloped countries
An effort is now being
p e o ex_pana the ction of this standing committee to include
the trade of 6uch_industrial unit deliveriesamong the Satellite
countries.
25. In addition to the thirteen standing committees, there are plans
for two additional ones. In the formation of a new committee,
all nations must agree that it has a justified purpose. This
has already occurred with the construction field, and a new
Standing Com mi.ttee for Construction is to be formad soon. A
new committz^ is also being'considered in the field of trans-
portation. There is a working group for transport questions
which is the predecessor of a Standing Committee for Transport,
but thus far there is no Standing Committee for Transport. The
working group for transport questions governs questions concerning
the guaranteeing of the forwarding of export goods, import goods,
and transit goods. The group is concerned with rail and river
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traffic; air traffic ie of no concern-because there is too little 25X1
of it. The Council for_the. International Cooperation of Railroads
works with the working group in certain. questions, and has drawn
up a protocol making augges ions. on reciprocal cooperation. The
protocol was signed provisionally and_subse_quently turned over to
the , deputies_of CEMA for further discussion. It is planned that
the working group will be converted into a standing committee but
the subject is still under discussion. The working group has its
seat in Warsaw and it is expected that the standing committee will
also be in Warsaw.
26. The difference between a working group and a standing committee is
that every committee has a statute which governs its activities,
All members must agree to the statute before it is accepted. Row-,
ever, a committee may exist for some time before an acceptable
statute is worked out. A working group has no statute in this
sense. It has less competence, i.e., fewer rights than a committee,
oihce the chairman of a working group does not have to be a minioter,
but may be a State secretary or a chief of a chief directorate. The
character of the questions handled is much the same, but the approach
to the problems and the decisions and solution of questions are
different.
a7. Standing committees meet once or twice a year, and usually maetingo
take place in the city in which the respective standing committee hao
its headquarters. The headquarters location is usually chosen on the
basis of the country most specialized and developed in the particular
activity of the respective :ta-ding, committee. Therefore, the chair-
man of a standing committee is usually the minister of the particular
industrial branch o e country in v -ic _ he Iie qu ei rb 'ta o ed
When a conference of a standing committeesi~ca~Yed epax'~e$ia'1i~
are usually the ministers or deputy ministers of the respective
dus-trial branch of the CEMA member countries. These ministers usu-
ally bring along staffs of experts from their ministries. Usually
a standing committee meeting involves a great many persons. For
example, the last meeting of the Standing Committee for Coal Industry
was attended by .tout sixty persons. For less important questions,
such as wood and cellulose, the standing committee may consist of
chiefs of chief directorates or a comparable echelon.
28. At standing committee seseior..s, each country presents its own
long-range plan and. these plans are then coordinated with the
other member countries' similar p1ar.b. One of the primary con-
siderations in the coordination of the long-range plans is the
inspection of each individual country's needs for home-,consumption
and how such needs can be covered by the total production of the
Soviet bloc in the industrial branch concerned. When the total
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production cannot meet the home consumption of the indidual
countries, an effort is made to decrease the home consumption by
placing quotas on the individual countries.. It is a frequent
occurrence among C 1F member countries that their own national
production is not self-sufficient but depende~nt on the production
of other CEMA member countries. This situation has to a large
degree been the result of conscious ,planning in order to make
these countries politically dependent on one another as a result
of their economic interdependence For instance, the DDR is not
able to cover its own consumption of grain and therefore has to
make certain that this grain deficit is being planned in advance
by some other MA country which will supply the DDR with the j
grain required for its consumption.
29. The standing committees may create working groups, expert groups,
sections, and sub-sections which meet to work on problems for the
standing committees., Personnel are drawn from ministries in
the various countries on ap ad hoc basis. Each standing committee
has its own secretariat, usually consisting of a staff of six or
seven persons who constitute the permanent staff of the standing
committee. A responsible secretary supervises the daily work of
each secretariat. The permanent staff members of the secretariat
are usually advisors from the respect?ve ministries of the C1Mt
member countries and each advisor is responsible to the ministry
which employs him. The secretariats ofe the standing committees
insure that the individual countries remain in contact during
the entire year, since.each country usually has a'representative
in the secretariat of each standing committee of which it is a
member. If a question is to be clarified, it can be.done through
these secretariats on a year-around basis. The secretariat also
makes preparations for the-conferences of the standing committee,
conferences of working groups, sections, sub-sections, and expa to.
The secretariat on the one hand performs administrative duties and
.on the other is obligated to try to clear up questions of concern
to the committee. For example,, if there is a point of disagree-
ment between Hungary and Poland, the countries will turn to their
representatives in the secretariat of the standing committee, who
will attempt to bring the conflictimg positions into a cement.
The results are then reported back to their own countr es. Such
questions might arise in the working groups, the expert groups,
or in foreign trade organizations of the countries. Disagreements
would not be referred to the advisor in the Secretariat of CM&
who is concerned with questions related to the committee. He is
concerned with maintaining contact between the Secretariat of CIA
and the standing committee, not with settling local disputes. 25X1
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SECRET
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30. The secretariats of the stand. Lnt; committees can make dec ieior13
where there 16 no disagreement. Principal questions must be
decided by the standing cormnittc:-c . If there is any disagree-
ment among the members of the ;tanning committee secretariat,
then the responsible secretary of the standing committee must
refer the matter to the standing committee. The sessions of the
standing committees are plenary sessions on a smaller scale,
limited to the specialized sector of the economy concern
31. Once or twice a year Pavlov calls a meeting of the responsible
secretaries of the secretariats of the standing committees. The
chair is held by Pavlov or one of his deputies. At these meetings
problems are discussed which could touch on several committees.
For example, the Standing Committee for'Geology tells the Standing
Committee for Machine Construction whether it has included in its
working plan the machine requirements for the Standing Committee
for Geology. If this is not the case, there is a heated discussion
in which each s:Lde will try to present its point of view. This
meeting is called "meeting of the responsible secretaries of the
standing commit??ees".. This meeting has a coordinlating function. It
merely gives advice. Then the CEMA Secretariat also makes proposals.
? It asks the members whether a certain matter could not be accomplished
in one way or the other, and the members of the meeting either agree
or not. The responsible secretaries of the standing committees are
independent from the CEMA Secretariat and the office of the deputies.
They are responsible only to their own standing committees, but
they consider the advice of the CEMA Secretariat and of the deputies
and then make up their own minds.
32. Country representatives in the secretariats of the standing com-
mittees are not subordinate to country secretariats (staffs of
deputies) of the countries from which they come. The members of
the secretariat of a standing committee are responsible .to the
responsible secretary of the committee, to the chairman of the com--
mittee, and to the national ministries which delegated them to the
standing committee.. 'For example, in Mloscow there is the CEMA Secre-
tariat. There is also a. country secretariat for each country; these
are the office staffs of the deputies. There also are several
standing committees which have their seats there and which have
secretariats. The country secretariat can give no direction to
fellow nationals assigned to the CEMA Secretariat or to the secre-
tariats of the various standing committees. It is the function of
each country secretariat to maintain contact between the CEMA Secre-
tariat and the chairman of its own State planning committee,.who is
at the same time the country representative to CEMA.
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33. Each country representative in a secretariat of a standing com-
mittee is responsible to the responsible secretary of the secre-
tariat of the standing committee, and also to the chairman of the
standing committee, but his first responsibility is to his own
country, consequently to the minister of his country who is his
country s representative on t e standing committee 'The-minister
can give him directions as to how he shall represent his country.
The responsible secretary of the secretariat of a standing com-
mittee cannot give orders to the country representative. He can
only hold him responsible for working in such a manner as is neces-
sary for explaining certain problems in his own country. He can
ask the country representative to inquire, for example, if his
country could be the principal supplier of a particular item. He
can make recommendations to the country representative in the
secretariat of the standing committee but he cannot give orders.
34. A fundamental part of each standing committee is the working group.
There.are an average of three or four working groups in a standing
committee. Their meetings are called by the secretariat of the
standing committee on an ad hoc basis. If necessary the working
group can be divided into sections and sub-sections. Only fragmen-
tary questions are considered at working group meetings. For
example, the Standing Committee for Coal Industry.has a working
group for the balancing of fuel and power. The working group will
be composed of persons drawn from appropriate parts of the govern-
ments, mostly from a State planning committee. They will meet for
a couple of days or.a week, as necessary, and then will go back
home. The results'of their work will be presented to the secre-
tariat of the standing committee. Ifi it is a matter which can be
handled simply, concerning which there is no dispute, then it can
be quickly disposed of at the next conference of the standing com-
mittee.
35. Aireetives to the standing committees can come onl from the CMA
plenary session. If differences of opinion arise in the standing
committees which cannot be resolved, complaints are,us_KsRallty regis-
tered by the comple6ining country to the CEMA Secretariat, mostly
regarding. nonfulfillment of some delivery oliga ion. CWVf
Secretariat has no executive power o\%er tie stahding_6ommittee
but can refer the point of contention to the offices ofthe duties
concerned and ice a recommendation Then the office of thedeputy
-direct negotiates with appro his State planning committee cha~irman_m o can
p ministry to jiff-its case or make the
required c4an q. The offices of the deputies are usually only
intermediaries between the standing committees and the C24A Secre- 25X1
tariat.
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0
36. The
defense effort from'a roduction of arm- 25X1
aments point to view is handled by a Standing Committee for Defense
Industry whicr has ite -- uartd sin mloscow. e conferences er-
~~.~
committee and the re resentatives from the res active defense miniw-_
tries-of the member countries of CEMA. Certain closed sessions are
not even attended by representatives of the Council Secretariat.
Everything involving this committee is very secretive7and only persons
who have direct business with this committee are permitted to partici-
pats during the committee meetings. Even the coordination which the
offices of the deputies of the CEMA member countries perform for the
other standing committees is excluded with respect to the Standing Com-
mittee for Defense Industry. Their coordination is done either di-
rectly at the committee level or handled through liaison and conferences
directly with the respective defense ministries. The other standing
committees are require ?to ibmit least an annual report of their
work to the office of the deputies of the CEMA countries. The Stand-
ing Committee for Defense Industry is not required to submit its
report to the CEMA Secretariat.
The Working Committee for Economic Problems
?
37. This committee
is located in Moscow and was created byCF IA s eciff-
cally to evie~ and coordinate the ion Fran a lans of the Artici-
ang countries. It is a working committee of CEMA. It is not a
standing committee, and can be dissolved upon completion of its work.
The committee was decided upon at the 8th CEMA Plenum and made ef-
fective at the end of 1957. A Soviet functionary is now the chair-
man,of this committee. This committee is supposed to continue until
the question of the long-range plans has been resolved. The com-
mittee is made up of representatives of all Council members. The
committee consists of about three or four representatives from each
country. This committee has no office and no permanent secretariat.
They met once in 1957 and will meet again in March 1958. The members
are mainly from the various State planning committees, but they can
also come from' institutes and usually represent a high level of compe-
tence. Because of Soviet superiority in economic questions, the
problems which are presented to this committee are thoroughly discus-
sed in Soviet academies and institutes. The Soviets, therefore, set the
tone for questions that, come up in this committee.
Observer Countries in CEMA
38. The Chinese Communists are only silent observers in the MIA meet-
ings. They take no part in the open discussions. However, the
Soviet Union has quietly suggested, with the support of the DDR, 25X1
that the Council, in making its coordinated plans, cannot simply
overlook the Chinese plans for economic development. The economic
plans of China, Korea, and Vietnam will be taken into consideration.
AMW
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There have been no efforts made to make China a member. 25X1
However,,
there is an effort to cooperate with China. It is lanned to de-
termine what can and should be delivered where, how the econo '
_ top.
should be develo ed ~nd'what one caa
~,. get from Chine in order - to
help equalize a deficit in the Council countries. It has been
suggested that a tropical research institute for the testing of some
kinds of machinery under tropical conditions should be built in
China. China has agreed to permit construction of such an institute
in its territory; the participating countries which are interested
in it must contribute the finances on a share basis. Such specific
cooperative projects have been discussed. For the most part the
discussions with China are bilateral rather than multilateral.
39. The Yugoslav trade attache in PNoscow, Pelizon sic, possibly No
Peligo7, has been negotiating with the Secretariat-about future
participation at CEMA meetings as an observer. Pelizon wanted to
be present during the plenary sessions and during meetings of the
standing committees. He was advised that he should submit in
writing a request for such participation as an observer and that
this request would then be presented during a conference of the
CEMA countries! deputies, who would have to vote on the proposal.
So far the Yugoslav request hats not been put in writing, and there-
fore.they do not yet participate as observers during the CRMA
meetings.
CEMA -..RELATIOhISHIP TO GKVES
40. The USSR-State Committee for Foreign Economic Relations (GK)T%)-
-has no jurisdictional authority with respect to CE.1A. CE11P deputies
and members of the Secretariat are in no way subordinate to it.
Disputes are handled within CEM1 itself and are never referred to
GKVES: However. there is an inforral relationswhich does exist.
CEMA deputies have contacted GKVES on a nunber of occasions. This
contact is at the initiative of the CEMA deputy and is confined to
requests for economic assistance or to discussion of trade questions
which involve the Soviet Union directly. Actually, in such cases
the matter is not r a concern of COLA Rather the CEMA deputy
is acting on,behalfof a minister, in his country rho has appealed to
hiin to handle the matter rather than going through thetrade dele-
gation to Moscow, which would be the usual _ channel for such talks.
Such conversations are never initiated by GKVES-.--
EFFECTIVENESS OF THE CEMA ORGANIZATION
41. The weakness of the CEMA organization is the fact that no one 25X1
really knows who stands above whom. This can also be seen in
the struggle between the deputies and the Secretariat regarding
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the standing committees. This affects the work of the Council. The
increase in the table of-organization is to give more detailed con-
sideration to the problems under discussion and to be able to give
the member countries.more detailed reports. It is not yet clear
whether this proposed T/O will be accepted. The question is prima-
rily financial, since it would mean that the member nations would
have to increase their contributions to the Council. Thus far,
Bulgaria and Albania have indicated that they are limited in their
availtible funds. Every country is checking to see how much more it
would cost to increase the T/O. Probably the Council T/0 will not
be increased in the near future. When the T/0 has been worked out
to a point where all members know where they stand, the Council
will probably function better. The increased T/O can lead.to further
confusion, if more people then do not know where they stand, if the
constitution of the Council is not clarified along with the increased
T/O. Such a constitution could be created at the expense of the
standing committees if, for example, the constitution granted the
Secretariat powers overrthecottees `mere eY?e siren no
real disciplinary powers or measures in CEM&. There are usually
concrete penalty provisions in foreign trade organizations in case
one country does not meet its del ve _ i _ _ ____ ... _ - _ _er:_
Y'y obligations. These pawe
contractsa because it io_not eno to
say that a_eount y does not side by the principles of international
cooperation. Otherwise the contract is abstract and it is.,hard.to.,
find an appropriate control. Some measure of control is maintained
._ t hr6u-&- e`fiPluence of_-Party organs.
42. CEMA is primarily an snstrument of economic coordination of the
Soviet Bloc, but this economic coordination is guided by political
considerations, which are to present a front of solidarity among
the socialist countries against the capitalist threat. Poor
?anizatioastl_etructure ~^ ae well as the national interest of
the member countries, are two major factors which handicap the
efficient functioningof~ CEO. The tension-and friction among the
CEiQA country representatives is most strongly noticed at the meet-.
s of_ s cialis sin t ie o ii committees There~~" i~rgain
ing takes plate and indications of national interests rwail in,
the discussions. At the higher echelons ouch as the offices of
the deputies, the, ,CEMA Secretariat , and the meetings of the chair-
men of there spec ive State plannin commtteei-. there is much
less friction and greater+unanimit
43. Two factors seem to indicate that the future influence of CEMA
will increase. One, there is a tendency to increase the staff cif
all the three echelons of CE1A. 3 candl 'the Soviet proposals .'
which would make CEMA decisions part of each individual country's,
national ylanning, and which wool thus gee ~ ecis3one
a lel foundation for ewers! respective country;, would strongly
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L_u
in-crease thy influence -,f CT !`,r, acn~rdinac_in~ bode There is no
certainty as yet that the :at,=1Lit(' countries will accept this pro-
posal. There probably will. be a considerable amount of resistance.
However, if accepted.and implemented, it will put teeth into the CEMMA
decisions and will increase the stature of CEMA to a great degree,
If the Council could effect its coordination as it plans to do, then
there would be considerable dependence of the member nations on each
other.
METHODS OF SOVIET CONTROL OVER CEMA
k Officially the Soviets do not have any greater rights or privileges
than other countries. In factshowever, the Soviets take the initi-
ative in introducing ma or -, __,
a ortion of _the proposals_.__ After a ._
period of time every member nation is required to report the pro-
gress it has made in carrying through the Soviet proposal. Usually
proposals come from the various member nations and are brought to-
gether in the Secretariat, which passes them on to the meeting of
the deputies. The meeting of the deputies treats each proposal
separately. A decision is then made as to which proposals are main-
tained and which are removed from the comprehensive?study presented
by the Secretariat. As soon as a decision is made, it is brought
before the various member nations. Before a proposal is accepted,
it must be voted on unanimously by all the deputies. Thus, by
? making the largest number of proposals, the Soviets exer:,i;-e type
of control over the Council.
45. The official lanuage:_is Russinn9 and the., Soviets _usuall init
proposals which they have previousl worked out. Since many of
the deputies are not fluent in Russian, the Soviet proposals have
to be translated first into the respective languages before the
various member countries can take a stand or write a position
paper; about the Soviet proposal. The time element involved is
usually in favor of the Soviet delegation, and thus any arguments
or changes proposed by the other members are frequently neutralized
by the Soviet delegations' better familiarization with the topic,
as they have had more time to work on it, and by the limitation
of time for the, other members to prepare their arguments. and
counterproposals. The Soviet delegations have larger and better
trained staffs on th'6_ free levels ofSccretariat_, de uties' offtces)
a>n,,-standing committee offices. The Satellite deputies consider
the Soviet delauty and his advisors more experienced and capable
In the management and planning of the economy within the context
of socialist political-economic theory.
46; The Soviet Union exerts control in the ,political sphere because
of her position as the leadinasocialist -country._ There is no 25X1
direct indication of Party control over CEMA decisions because
the socialist countries espouse the thesis that the Party and the
S
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government are two separate bodies. Nevertheless,the.stronges
ement of-.control which has been exercised in the past concerns
the behind-the?-scene supervision of CEMA decisions by the re-
spective central committees of the Communist Party in the member
countries.
47. For example, since every CEMA country deputy is directly responsible
to his State planning committee chairman, the latter is in a position
to direct and guide his country's CFIA representative's activities.
Since the chairmen of the Satellite State planning committees are
usually members of the Communist Party Central Committees and, in
some instances, candidate members of the presidium,_the chairmt~n
receives his instructions from this hih_ political ,bow...laeefox
although there is no clear evidence of political considerations
entering into the economic coord.nstion of CEMA, a channel for
passing such poltical influence_from the CCCFSU to the chairman
of the State planning committees down to the deputies ofCEMA
clearly exists and presumably is utilized.
!8. In addition, economic experts from the respective Part central
committees of the member countries usually infect the decisions made
a tLe
CEMA P Y
leear sessions. One month after the plenary
r -..-
session, this team of central ^onr^ tree experts looks over? the
decisions made during that plera.rv sessiort4 Another of their
functions has been described 3~ ri~kii recommendations to measure,
that in the ''uture these plenary session,decisions are implemented
to greater degree than has recn the case in the past..
49. There it a tendency to pay tno lithe attention to the principles
of cooperation and coordi,nataon among member. countries when it
conies -:o meeting specific delivery requirements. The USSf ? CEMA
deputy, N. M. Si-Luyanov, stated that there has been an increased
tendency on the part of the member countries to disregard the
plenary session's decisions; ac a result of that,the USSR dele-
gation and the CEMA Secretariat will propose various changes
designed to make the plenary sessign's decisions more controllable
and enforceable. Silu arov stated thatseveral__of the_-e untries
that have failed to receive ~ouiaed deliveries have come to
to complain end that this is a clear indication that the
__principles laid doi?n during t,.(- last plenary session,vere being
disregarded I is plaru~eci for the ,tvrP to_have_ tk~e :C.ou c 1.
plenum decisions becomes a arf s tional_economlc_p aing,
in which the CE14A decisions are to begiven a legal foundation in
the respective countries so that failure of compliance can be
legally enforc=d.TTht Soviets contribute a considerable amount
of the goods to cover the deficits of the member countries. For
example, ii' Ht4ngary does not receive anthracite coal that was 25X1
'promised by th. DDR, Hungary rr'ceives the deficit amount from the
? Soviet Union. This occurs in.-rany cases.
E- -R-P-T
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EC E T
CK"h LONG-RANGE PLUMING ACT =`V I l r,
50. In the past each nation has irad its own Five-Year Plan which has
not been exchanged with other riember nations of the Council. In
the light of decisions of the Council, each nation examined its
Five-Year Plan to determine its own ability to comply with de-
cisions of the Council. If it did not believe it had the capacity
-to deliver commodities suggested by the Council it simply did not
comply with the Council's recc.-r_mendation. Such coordination of
national plans as there was was accomplished for specific com-
modities in the standing committees. For example, one nation
would announce ir.~ a committee that it could export a given amount
of a commodity, and agreements would be made for exchange of goods.
The Five-Year Plan for,l955-6O, for e,carnple, was coordinated only
between two or three nations in the standing committees. The
Secretariat, the deputies, and the representatives to the Council
were not brought into the process.
51. Asa result of decisions taken at the 8th Plenary Session of the
Council there,-. a new concept of group coordination of long-
range national economic plans. Long-range planning is regarded
as the most important work of CEMA. The long-range plans are an
attempt on the part of CEMA to draw up coordinated economic de-
velopment plans for the next ten to fifteen years for basin
industries and major producti.or-, items. A long-range plan is made
for'-ach important branch of industry and agriculture. Thus far
the major concentration has been )r. coal, power, basic materials,
machine construction, and cherni ca,l products. Exactly how corr-
prehensi_ve as to types of prcdaot and industrial branches such
planning shall become has no+, yet been decided.
52. Conservation of materials in sr,.r?t supply, so that more will be
_,}.vailable for essential uses, io a pzrt of the program. For
example, CEMA member countries are Pttenipting to cut down on
the use of coal for heating p.irDuses in order to make more availa-
ble to the metallurgical industries. Certain countries are being
encouraged to reduce their consumption in order to make more
available to countries having the gr--atcst need.
73?
The starting point for plan coordination is the long-range economic
plan of the various countries. Every country is developing its own
economic plan for the period 19.0 to 1975. 1'his_planis to be pre-
sentedto the Working Committee for Economic Problems, which is
located in Moscow. It is the duty of the working committee to
check and coordinate the various long-term plans. The production
of important __commodities is to be balanced against requirements.
If deficits are apparent, import requirements can be estimated.
The prewar years 1938 and 1939 are being used as norms because it
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was in those years that the countries had achieved their highest 25X1
prewar production. The year 1955 is to be the base year for pro.
54. The long-term period, 1960-1975, is to be divided into two staged.
Planning for the first stage, 1960-1965, is expected to be in rather
specific terms, as it is believed that the countries can estimate
their production and their requirements more exactly for those years.
Planning for the years 1966.-19i'5 will be in more general terms. Plan
coordination may lag behind schedule because the member nations
have been reporting difficulties in developing their national plans.
The plenary session of the Council discusses the proposed national
plans- and lays-down - gene ra.%__Guidel.incs_ for -coordination. Details of
the coordination a.rethen worked out- in_ accordance with these. general
guidelines by the standing- ccorrmnittees. The result should be a picture
of the total future production In _siiecific industrial branches,
balanced against consumption requirements of the. individual countries..
In.this way it?is determined which countries will have surpluses and
be in a position to make deliveries to countries having deficits.
56. The coordinated proposals will then go back to the State planning
committees of the various member countries. There the national
economic plans- should be revised so that they correspond more nearl.;,
to the coordinated suggestion;:. Some of these suggestions may contain
recommendaticns concerningT ~l.ec:iai.ization. For example, it may be
recommended that .a country stop trying to develop a particular in-
dustrial branch which already exists at a developed stage in another
CENIA country. Poland might be discouraged from investing in the
development of.optical equipment and chemical industries because
those industries already are well developed in the DDR,which could
export its production toPoland.The purpose of such coordination
is to avoid wasting the economic strength of the bloc by expanding
industrial branches in one country which-already are well developed
in another. Various aspects of planning are discussed below in
the-section on CEMA activities dicing 1957.
CEMA ACTIVITY TAT UNDERDEVELOPED SAS
57. CEMA countries are rendering economic assistance to underdeveloped
areas with the ostensible objective of developing and advancing
the national economies of the-underdeveloped countries. Trade has
been the principle means of increasing contact with the underdeve oped
countries, and although goods are sold to them at prices which
actually are below world market prices, it is believed that such
trade is profitable.
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58. The C1I A counr~ries point to i.o log, prices and easy payment terms
and give assurances that a^s_utance is given without further motive.
Considerable propaganda is 1P,Lde .c c hc? effect that if th-- under.:
developed countries would acccT)t e:cnn.o,nic assistance from capitalist
countries, al__ -sorts of political limitations and stipulations would
be attached to the aid. A ctk call the undo thought mong Ca7A
members when rendering econ-inic aiu to uiuderdeveloped areas is partly
business advantage, the desires to pu3a Western
countries out of
these markets, and partly the desire to exert influence in theunder-
developed areas and to make__them part_ of the Soviet Bloc,sphere _oi'
influence.
59. The major area of interest at thir; time is~ The principal
commodity being sold in this area is electrotechnical equipment.
There is a general emphasis on sale of the products of the machine
.construction industry. In second place as to emphasis _is _the sale
of chemical products. Complete plants have been delivered to Com-
munist China, I and some South American countries.
6c. Unless a dispute arises which has to ce settled a.thi ?Pr ,leveJ~s,
the secretariat of the standing conmit ee eoDcnsiblc. for the
product which is to be marketed determines which country shall
be the principw:ys lies in ;riven area. For example, thea foreign
trade ministries of the member counltr es _advise the CM, 11A Standing
Committee for the Delivery of Complete Plant Units that certain
plant installations are available for export, and inquire what
demand exists. The committee considers availabilities and demand,
on the basis of information supplied by the Standing Committee for
Foreign Trade, and tries to determine which country can deliver
installations best designed to compete with the West in the area
concerned. At this stage there is competition between bloc countries.
.For ex ample, Poland and Czechoslovakia might disagree as to which
one should be designated as the ma or surlier.. If ' the ma or sup
ier cannot supply ever)hing that is eeded, there also be __
sub-suppliers. The secretariat of the Standing Committee for the
Delivery of Complete Plant Units determines which of the co eeing
countries should,be designated the major supplier. In this process
e _ r?e resentative ofthe USSR '1r _t e- _secretariat of the- Stanain
Committee for 'the Delivery of Camplet,e~ Plant Units in some cases
t1 representative of another country, acts as mediator. The same
procedure would be used for- any coa,moai ET,_ but the decision would
be made by the secretariat of the appropriate standing committee.
For example, questions concerning sales of tractors in the Middle
;East would be settled by the secretariat of the Standing Committee
,for MAchine Construction. 25X1
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-at)..
61. When one of the Satellites negotiates with an underdeveloped
country,concerning delivery of specific products, the Soviet Union
often is requested to extend credits to the Satellite. For example,
if Czechoslovakia negotiates concerning delivery of
certain industrial equipment, and wants the equipment but
lacks the funds to pay for it, the Czechs may go to the Soviet
Union and ask'fdr credit. The Soviet Union gives the to
Czechoslovakia , which- in_ turn,passes. it on, to can now
import the desired industrial equipment and as ar as is con-
cerned the creditor is Czechoslovakia, although the latter actually
obtained it from the USSR. Such credits,, granted to bloc countries
to make possible deliveries to an underdeveloped country, are not
counted as part.of the planned credit. agreement between the USSR
and the other bloc country. Thus, figures published concerning
credits granted_bythe USSR to a_Satellite do not contain these
extra credits, which cannot be anticipated in advance and which
are made available as the need arises.
62. CStanding,Commnittee for Foreign Trade has urged increasing
direct . purchases from.the underdeveloped areas, expanding the
variety of goods exported to the underdeveloped countries, particu-
larly industrial goods for which there is considerable demand, and
exploitation of ,possibilities for multilateral trade and payment
accords. It also has urged that there be exchange of views anion,
the ministries cf foreign trade of member- countries and among
foreign trade organizations _pertaining to prices, delivery terms,
market conditions, and opportunities for carrying on trade with
underdeveloped areas. It has suggested that a survey be made of
market opportunities in underdeveloped countries of primary in-
terest to COLA, and has urged trade representatives of the partici-
pating countries to..conclude..contracts with the underdeveloped
nations.
63. The Standing Committee for Foreign. Trade agreed in late 1957 to
increase its participation in trade with capitalist countries.
Those CEMA foreign trade organizations that had proven themselves
in trading with the capitalist markets were to meet with other
interested foreign trade organizations and agree upon concrete
tactics and methods to be used in the future when trading with
the capitalistic countries. The leading functionaries, of the
foreign trade orgu.iizations were to meet at least once a year
end decide upon the most important commodities. Representatives
of foreign trade organizations dealing with machines and equip-
ment were to meet in early 1958. The duties outlined above were 25X1
to be carried out. when necessary, an agreement was to be reached
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regarding the time and place for commodities to appear on the market. /
This would alleviate the concurrent appearance on the market of '
large amounts cf commodities from several foreign trade organizations.
64. Prior to negotiations on large quantities of goods, consultations !v~
should be held faith the CEMA country which purchases or sells the ,; 25X1
largest quantity of goods in question. Information is to be exchanged .~k
on firms that are irresponsible in trading with CEMA countries
.
Representatives of CM4A foreign trade organizations are to determine
the categories of goods that require consultation prior to purchase
cr sale. Minimum limits for sale price and maximum limits f
r
o
purchase price are to be established for certain commodities. /Prior
approval is required before large quantities of goods are purchased
or sold outside the established limits. It is to be proposed that
the ministries of foreign trade increase their control over prices
in order to prevent a wide discrepancy between CEFIA prices and those
charged by capitalist firms Prior to their participation in the
negotiations of orders, interested CEMA forei&!_trade organizations
shall consult foreign trade representatives abroad in order to M
exploit their knowledge and determine tactics to be used during
negotiations with capitalist countries. Where possible, the meetings
concerning trade with capitalist markets should be conducted. with
representatives from trade organizations that handle similar groups
of commodities. .
65. The allocation of market areas to the bloc countries is done in
general categories of products. If orders for a category are re-
ceived by the CSR, these are to be passed on to the country which
has been allocated that type of product. It is attempted to rggis-
ter the request of every order from every underdeveloped country
The secretariat of the committee registers these requests and decides
which country is competent to car ry ,c the order.The point- is
w iced that there would he corif licts if an area which is kbe_. re
_sponsibility of a bloc country requests goods for which another bloc
countr.y is appointed to make deliveries. In such case. the decision
is made that the country whlcn makes the deliveries is_ _ ointed
the major deliverer. This is weakness in the system, since in
most cases the responsible co.l.r.try for an underdeveloped area is
not the major supplier. The c+i. r;.;;ion of this responsibility
is limited only to requests for gads from these countries.' For
example, if an order from goes to its supervising bloc country,
the order is serviced by the competent bloc state, even if it is 25X1
not the sul^rvi or.. Not many areas have been specificall assigned--_
thus far for nro.irvision by a bloc country.
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66. Upon recommendation of the Soviet representative the general emphasis
is on encouraging multilateral negotiations and agreements rather
than bilateral agreements. However, bilateral.agreements are still
about 50 percent of all contacts and are made especially when the
nature of the transaction limits the participating countries to two.
For example, bilateral agreements exist between the USSR and the DDR
in the delivery of cotton to the USSR from the DDR. Such bilateral
agreements are negotiated by the respective ministries for-foreign
trader which then advise theCEMA Standing Committee for Foreign
Trade of the progress and results. All bilateral agreements made
between CEMA member countries are made by the respective minis_tries
forforeign trade. However the agreement must be reported to the
-CEMA-Standing Committee for Foreign Trade. `1' he results of such a
bilateral agreement are also submitted to the office of the CEMA
deputies for their information only, rather than for action.
TNTRA-BLOC CEMA PROBLEMS
67. Thus far the clearing system has had very little use and effective-
ness and the various member nations appear to have a certain fear
of the system. There is a clause which demands that in the mutual
delivery of goods a maximum sum must be stated, and that everything
exceeding this sum must be balanced by free valuta. The finance
experts are usually not consulted in the development of the clearing
system. As a result the clearing system has certain weak aspects.
It must contain certain strict clauses, as well as clauses which
are directed against the West. These are probably the reasons why
there has been such opposition to passing any information on the
clearing system to the ECE.(UN ). ECR made an inquiry to the Council
regarding information on this system in the fall of 1957. At that
time the various ministers of foreign trade were called on to determine
whether there was any objection to advising the ECE of the agreements
in the clearing system. This pr?opose.l was icl~(etcd at that time.
68. Product specialization is limited now only s:o rr+c=hi?,- production
and all its subordinate -Parrs 'Wberr T ~c 3 t c in a particular
machine has been assigned to one country, W ?r are required
to maintain their production at the exi;,ctng level. There are
instances where certain types of products ors cut completely. This
is determined in the secretariat of the Standing Committee for
Machine Construction. The coun".ry representative then must turn
to his ministry and inquire whether his country is in a position
to cut production or maintain it on its existing level, and whether
it agrees with the proposal of the committee. Poland took one type
of commodity out of production on the assumption that this particular
commodity could be supplied by the CSR. The CSR could not fulfill
its commitment. Poland was then forced to take up production again
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and complained about this situation. Poland had made certain re-
quests for some material for the defense industry which it did
not receive. The same situation also existed between the DDR and
the CSR.
69. In the case of the smaller nations, who often insist on the point
of view presented to them from their home offices, they often feel that
their nationalism has been affected. This attitude has become ap-
parent in CEMA discussions This expression of nationalism is
unacceptable to the other member nations, who try to influence the
disputing nation. If Hungary has a nationalistic problem of some
? sort, she may turn to the DDR and ask her to join forces so that
both represent the same line of thought. Thus, if enough n.tion}s
can be won on one side or the other, the weaker has to give in.
THE WORK OF CEMA DURING 1957
From January 1957 until the Eighth CEMA Plenum
70. During the period from January until May 1957 the following questions
were discussed and appropriate decisions made at the meetings of
the deputies of the representatives of the CEMA-countries.
a. Publishing of statistical bulletins
b. Conclusion of an agreement concerning multilateral clearing
c. Table of organization and budget for the year 1957
I/
d. The statutes of the standing committees for economic and scien-
tific-technical collaboration
e. The work of the standing cormriittees
f. Discussion of'a letter from the Deputy of the Chairman of the
Council of Ministers of the People's Repit lic of Poland,
Jaroszewicz, of 12 April 1957, concerning questions on the
activity of CEMA and necessary changes in the methods and
forms of i-ts work.
71. Of special importance were the discussions of the work of the stand-
ing committees and of the letter of the representative of the
People's Republic-of Rumania in CEMA, Birladeanu, at the meeting 25X1
of the.deputies_. At this meeting it was determined that the work
of the standing committees, notwithstanding their brief existence,
is observed to be positive. At the same time it was noted that
essential deficiencies in the work of the standing committees had
manifested themselves. The following chief deficiencies were cited;
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a. In the working plans a great number of questions of frequently
second-rank importance were considered
b. The chief emphasis was assigned to questions of scientific
research and development work, as a result of which the economic
tasks of the coordination of the national economic plans received
little attention
c. Too many permanent sections and working groups were created
d. The meetings were'not adequately prepared, and too many meetings
were held
72. For the removal of the cited deficiencies in the activity of the
special standing committees a decision was taken which was communi-
cated to the chairmen of the committees and the heads of the dele-
gations of the individual countries. Among other things, this
decision provided that in the-future at the meetings of the deputies
of the representatives of the countries in CEMA the working plans
of the committees will be discussed, end in necessary cases proposals
concerning the work and coordination of - their activity will be pre-
sented. The CEP'IA Secretariat was requested to present comprehensive
information concerning the work of the standing committees to the
deputies of the representatives of the countries in CE&. At the
same time the Secretariat of CEMA was requested, in connection with
the formation of the standing committees, to prepare appropriate
`proposals concerning the organization of mutual exchange of techni-
cal documentation on the basis of proposals of the countries.
73. During the discussion of the letter of Jaroszewicz it came out that
all of the countries inferred that the proposals in the letter were
aimed at a restriction of the activity of the Council. The Polish
deputy rejected this interpretation. The discussion revealed that
the concept of the People's Republic of Poland with respect to the
question of coordination of the national economic plans was as
follows: through various chari els, i..c., at the meetings of the
Council and. its organs, there si,ould take place deliberations with
respect to the direction of tic, deve.c:-,m'ert of the -national econoEW
-
-
as a wiioTe Find
E
d16 cussi.;c: ,,i' its ir.d-'victu.al branches; proposals
concerning the necessary expans:.,-)n of capacity should be made;
the deficits within the socia.'s;t camp as a whole should be de=
termined; and questions of ;. c:; ' a.l : nation of production should be
discussed. In this respect, however, no figures concerning the
evel of production, or concerning the necessary exports and im-
ports between the individual participating lands should be es-
tablished. e establishment of obligatory figures concerning
mutual deliveries should be regulated on the basis of long-term
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bilateral agreements. During the discussion of the questions con-
cerning the activity of the Council at the Eighth Plenum of the 25X1
Council, the very restrictive points of view were dropped for the
most part.
74.
development of the iron ore industry. This will free Hands
the next 10 to 15 years within the shortest possible period.
c. Assistance for the Polish coal industry: The Polish group
declared that future coal deliveries were highly contingent
upon capital investment assistance for the coal industry.
The credit agreement concluded between the DDR and Poland was
considered beneficial. The CSR declared its willingness in
principle; Hungary and Bulgaria will examine the possibility
of financial participation in the development of the Polish
cool industry. The USSR will assume all of the costs of the
The Eighth CEMA Plenum
The Eighth Plenum of the Council for.Economic Mutual Assistance was
held in the period from 18 to 22 June 1957 in Warsaw. In addition
to the participating countries of the Council, observers from the
Chinese People's Republic, the Korean People's Democratic Republic,
and the Federated People's Republic of Yugoslavia took part in the
meeting. The following questions were discussed:
a. Deficits in important commodities -- 1958-1960: No prpblems
with respect to the question of deficits-in important raw
materials and foodstuffs could be solved. Only another com-
piling of the current deficits was made. The USSR declared
that it would hold to the decisions of the Eighth Plenum of
the Council with respect to deliveries for 1958-60, and that
it was examining the possitliities for increasing deliveries
of certain deficit cormnoditieu; it expected in return the
delivery of the corrm7odities which it required for its national
economy.
b. Coordination of the longterm plans: It was considered
expedient o begin thecoord.iria io of the loxbg-te _ple s for
in other countries which can be used for participation in
the development of the Polish coal industry.
d'. Transportation problems: The difficulties in rail transport
arising ~_n consequence of the increasing freight transport
between the participating countries.were discussed, and the
inadequate development of the merchant marine of the countries
participating in the Council was also noted. It was decided
to create a working group.
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~' t+~ ~ u ill i7?
e. Improvement of the work of the organs of CEMA? The f'ragmen- 25X1
tary activity of the organs of the Council was criticized and
measures undertaken aimed at achieving a concentration of the
activity of the Council on the handling of critical problems
of national economy. The activity of the deputies of the
representatives of the countries of the Council and of the
Secretariat of the Council must be strengthened. The work
cif the special standing committeevmust be coordinated and
directed through the meetings of the deputies.
f. Meeting of the ministers for foreign trade: During the Eighth
Plenum of the Council, a meeting of the ministers for foreign
trade took place, at which a multilateral clearing agreement
.between the countries participating in the Council was reached,
and an exchange of experience with respect to a number of
questions was carried on.
Z
g. "Common Market" and."Euratom": At the proposal of the DDR it
was decided to include. in the published communique a statement
that the delegations of the participating countries consider
the creation,o'f the turopesn. Coal- and Steel Community common market
and of "Euratom" an impedi"ient to the development of foreign
trade and other forms of economic cooperation of all the
European countries.
Coordination of National Economic Plans Until 1960
75. At the Eighth Plenum of the Council, several major questions which
have considerable significance for the development by the countries
of five-year plans for-the period 1956 to 1960 were not -
solved. Aside from this, changes in the plans were made later by
the countries.
76. Tae discussion of the chairmen of the State planning committees of
theparticipatir countries of CE,M,A, from 12 to 14 March 1957 in
Moscow, gave an approximate view of the situation regarding the
supply of the CZ KA countries with coal,;Petroleum, etroleum pro,-___
ducts, metallurgical coke, raw iron, rolled_products,._iron ore,
aluminum, and zinc, and presented the countries with the problem
of taking measures toredur-e consumption in order to increase ex-
port resources. After examination of the questions posed in each
country, a multilateral discuss ion was to. take place on the most 25X1
Important deficits.
77. TheEighth Plenum of the Council asked that the State planning
committees and. the ministries _ of f ore ign _trade__of'_the - m^..m'ber
countries prepare within three mnths, on a, bilateral _ r d..m lti-
lateral basis, realistic plans for mutual deliveries of the roost
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important commodities for 1958 to 1960 with regard to specific plans,
and that the ministries for foreign trade conclude.agreements_f'or
three years., Since 17 September, negotiations between all Council
countries concerning general conditions for deliveries,in foreign
trade have been in progress. The base yeaar'for these negotiations is the
year 1951. The Soviet Union unexpectedly came forward with com-
pletely new proposals, to which the CSR, above all, gave its con-
currence, as it usually does even when it is detrimental to the CSR.
Contained in the provisions from the year 1951 were many advantages
for the DDR, so other countries desire to extricate themselves from
the bilateral agreements with the DDR. The entire tenor of the
negotiations is aggressive, and agreement can hardly be anticipated.
Even the DDR is opposed to 15 points, Including the Soviet proposal,
for the extension of the guarantee term?for cable products from
12 to 24 months. ?
uties During the Second Half of 1957
78. After the Eighth Plenum of the CouncilJthe meeting of the deputies
proceeded to carry through its work systematically. The topics to
be discussed were determined three months in advance. At the same
time that they discussed and confirmed their own plans, the meet-
ing of the deputies also discussed the working plan o$, the Secre-
tariat. During the first half of 1957 only five meetings of the.
deputies of the representatives of the CED4A countries took place,
but during the second half of tie year seventeen official, and in
addition a number of unofficial, meetings took place. The first
session following the Council Plenum, on 10 July 1957, concerned
itself with the organization of work for carrying out the decisions
of the.Eighth Plenum of the Council, and established appropriate
measures.
79. In a number of sessions the meeting of the deputies concerned it-
self with the drawing up of its own charter and with the charter
of the Secretariat. While previously an established policy with
respect to the d.elimitation'of the tasks of the individual organs
Sias completely non-existent, the formulation--of these charters
created a certain clarification. There is no aeeneral charter
concernip the Council and its organs. On several occasions the
work of the standing committees was discussed and concrete recoim.
m2ndntions for the coordination of their work,.for reducing the
excessive number of meetings, and on other questions were given.
30. At a special session which took place in Prague in September, the.
report of the chairman of the Standing Committee for Machine Cob
struction on the activity of the committee in the previous period
- was heard. The meeting of the deputies decided on a great number 25X1
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of measures as a recommendation to the committee, in which con-
centration on the question of concurrence in long-term plans and
specialization of production for a limited circle of machines and
equipment were especially emphasized. The Secretariat of the
Council was commissioned to expedite, on the basis of background
data from the countries, the preparation of proposals with respect
to the improvement of the procedure for the exchange of technical
information, as well as for the question of patents.
81. In the Preparation formeetiAgs on reeiPrace.l ftl~ _@a duurtn
,the period 1958-1960, the meeting of the deputies determined which
items should be mul ila era y sae w c iTatex?ally neo~clm sect
In preparation and appraisal of tip meeting Fth~en of
the State planning committee in Prague, and the first meeting of,
the Working Committee for Economic Problems,, the meeting of the
deputies concerned itself on several occasions with questions con-
cerning the organization for the carrying out of the preparatory
work for concurrence in long-term plans, and established measures
which,among other things, are designed to expedite those tasks,
which are in many ways behind schedule.
? 82. The following questions were also token up by the'maetinga of
the deputies during the second half of-1957:
a
b.
c.
Formation of a Standing Committee for Construction and a
Standing Committee for Transportation
Conclusion of a.multilateral agreement concerning protection
of plant 1:Lfe
d.
Contact with other international organs
e.
Conclusion of transactions within the framework of multilateral
clearing.
83. Following are excerpts from
Deputies in Prague, 19 to 20 September 1957:
Albania:
Bulgaria:
Hungary:
DDR:
Poland:
Ruka (since 24 February 1957)
Belomyshev
Osztrovszky
Opitz
Slusarczyk
? "., : S-E-C-R-E-T
Meeting of the C
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Rumania : Cioara
USSR: Siluyanov
Czechoslovakia: Maurer
Representing the Secretariat of -CFFWA: A. A. Pavlov, Secretary of
the Council
*F. Hamous, Deputy of the
Secretary
From the Committee for Economic and Scientific-Technical Cooperation (sic)
in the field of machine construction:
Chairman of the Committee: Polacek
Responsible Secretary -o-f the Committee: Stefka
Chairman: Osztrovszky
Agenda:
Report and discussion of the report of the chairman of the committee
concerning the activity of the committee during the past period. The
report is admitted by the meeting of deputies. The main objective
of the committee is the specialization of the basic branches of
machine construction.
Meeting of deputies :
I
In accordance with the decision of the Eighth Council Plenuma the
bests for the further activity of the Standing Committee for Machine
Construction must be the coordination of the longterm plans f'or
the-development; of the machine construction industry. Long-terms
plans are for 1.0 to 15 years Important_in,_thia is __the more_ rational
implication of the production capacity in the machine construction
industry, as well as the providing of the most important branches
of the national economy kith ?equjpmez t. ]Cxic u ed_, n here, i oxta t
branches a : coal industry, me allurgy,_ power, chemical industry,
transport, and agriculture. In this respect greater attention must
be paid to the raising of the technical level of machines and
equipment, as well as to the selection of those machines and equip-
ment which offer the greatest econowy in metal. It is desirable
that the committee devote greater attention in its working plan
to those problems which are current for a number of participating
nations and which demand an urgent examination and acceptance of
agreed recommendations. Concerned are problems such as the pro-
duction of electrotechnical apparatus, the more rapid introduction
of modern types of diesel and electrical locomotives, and the
modernization of the equipment of the basic materials industry
in order to raise the production capacity without significant
investment. 25X1
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for the most important branches of the national economies for ten
to fifteen years, two points of view care out with regard to a
principle for an approach to these questions. On2youint.of view
was represented mainly by the DDR, which considered the question
of coordination of the long-range plans particularly as a co-
ordination of the developm n-,' of production, at least as apoint
of departure-., A different point of view was upheld by the People's
Republic of Poland, which.considered coordination particularly a
question of the coordination of foreign trade. Aside from these
viewpoints, there are a number of other conceptions, which do not
represent such specific principles but which represent a certain
departure from the'decisions of the Eighth Council Plenum. It was
determined that the Working Committee for Economic Problems- should
work out the-economics analysis by 31 March 1958'. (Decision of the
Eighth Council Plenum wap 7 Jciuary 1958.
85. During the firs-IV meeting of the Worh'ai ; Committee fo-? Economic
Problems, various differing conccn-cions arose on ong the individual
countries concerning parts of the ecc:nomic analysis. Thus, the
DDR and the CSR represent the opinion that the conclusions of the
analysis should~c ntain w d~ cnxr proposcls for the development
of the most important_branchcu, particularly the basic materials
indhc'cry. The representative of the Feople's Republic of Poland
opoke a-;ainst these proposals. The representative of the USSR
agrecd with the CSR/DDR opinion. Most of the standing committees
have in she last months-of, .1957-he ld meetings atwhich decisions
concerr;ne the w yc and means of oaring the agreement of' the
long-term J?-_.tlls_ xeached in articular concernin the analysis
of the devv'_. T~. f.' the branches of industry uu_till the present
time, concern working out of the main direction of the
development of as well as concerning the compilation
and definition j_' c uali and ciuantity__figures cii h respect
to long term p r. ~r. On ] October 1957 there began a meeting
of experts in p ion for the working program of the Working
Committee for Problems. The main topic was the discussion
of the problem:: - 2,in g from the conclusions of the Elghth
Council Plenum a.; ._,: meeting of the chairmen of the State planning
committees in Pra,;?... from 25 September to 27 September 1957, particu-
larly those relating to the coordination of long-term plans (1960-
1975)
Coordination of Long-Term Plans
84. To carry out the decisions of the Eighth Council Plenum a con-
sultation of the chairmen of the State planning committees took
place from 25 to 27 September 1957 in Prague. In the discussion
concerning the development and coordination of long-term plans
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86. Long-torm plans will be established for the period 1960 to 1975.
The necessary planning work.sh-:i.d be concluded by the end of
1959. It is anticipated by the end of 1959 to have accomplished
the coordination of the long-term plans for the period 1960 to
1975 in the following branches of the national economy, in ac-
cordance with the minutes of t:h-- Fri.,*ue meeting-
c. Nor -te:-' oar metallurgy C,c+npc.r, si r., lead, acid lead and zinc
e. Machine construction: Forging; kind pressing eou.iipmcnt and
ins an(transport equipment.
?
Va. Power and fuEi base: Cc-,sl., petroleum, gas, and production of
-o F.t'imic energy.
b . ' Ferrous r e. tallurgy. Crude ran, oiled steel, pipes, iron,
and :n. n;? rcese . ?
d. Che,,.ica.l industry- Causticcrda, soda ash, synthetic rubber,
automobil:: tires, fertilizer, sulphuric acid,
phosphorous snd phospho.ous-containing
rag :nut`s als, and nitrogen fertilizers.
Yr c altar _ : Crain, meat cat ..Le , and oil seeds .
g. Food industry: Ktte-, anii,~,,)_ fats, and grain.
h. and import traffic and
promotion transport.
J. :I c ? .1 cel.lvi,)se : JJoed ~.ii otitutes .
` C; Deficits (1958-160
87. At the me Mini;.: i o 10 to 1'j U. tob >r 1 57 in. Moscow, representatives
of the state ,)1.aY.Lain,g committee; and the foreign trade ministries
disct?ssc,d questions concerning the mutual deliveries of anthracite,
coking_ c_,al, and arnth.?acite coke; ferrous metal rolled products
and pipc , petrolt.-i:i and ?~etrol~+:ir. -,products, including airplane
gasoline, autonobz Le gasoline, c pee ia~,J. (military) fuels, kerosene,
diesel fuel, and. berat;.n mazut. At the meeting working groups were
forthnd. to develop the various proposals for anthracite, coke coal
and coke, ferrous metal rolled products and pipes, and for petrole-
um and petroleum products. On the hpsis o iror in rou _xepoxts, _
the part icipan sat the meetings discuss,-!d : the quantities of goods
iThicha.re to b6 taken as a basis of reements covering mutual 25X1
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deliveries fur the period 1)55 and offered appropriate
recorT.oradaf.ic ns Or the br. i.,(-,i' tktc n,- tcricPlecged_requirements
and export cap r.Y~ilities_. c.x th'-___j.'irti.oipat.ing countries, the
follow; n; picture. d~:velcfed fcx_~pec fic_types of products
jl,C" 0 tons)_
1.958
1959
1960
Anthracite
Hungary
519
710
830
DDR
340
400
Tc'.:~.l
850
1110
1320
Coking coal
Hungary
120
180
DDR
-
275
Smelting Coke
Hungary
287
280
340
DDR
270
430
800
Total
647
875
1200*
*Cf. different figure given below.
Ferrous metal rolled products
DDR
182
324
IV
417
Total
341
605
716
? Pipes
Puman is 86 132 122
DDR 30 70 97
Total 198 231 236
Petroleum end petroleum products
Crude oil
165
295
455
Refined petroleum products
998
1584
2180
Heating oil (rnaz'at)
397
255
350
Total
1560
2134
2985
A maJo ' p,.rtion of the deficit J o refined petroleum products is
found in Poland' 1958 677.J'; _)59 73-J; 1960 943. The repre-
sentative from, Poland declared that Polish raw material exports
to the socialist countries would have to be re-examined if
Poland did not receive the necessary amounts of refined petroleum
product:. The deficit of metal'_urgical coke is serious; it will
amount to 1,500,O0~7 t6H6 in 1960, with the greatest deficit in the DDR.
Poland and the CSR are ready to deliver more anthracite coal on
the condition that the DDR will deliver brown coal briquettes.
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Hungary ~-iill be requested to c.a-miae the possibility of reducing
is internal needs fcr ant.'.'^rL.ci coal, in order to make less
demand for imports from the particilating countries. In the opinion
of the :Iu garie.r representative, the. internal requirements are
already low e.nd .>4. Thu a en.aa nor t .c 18 Octob;_r 1957 r:cetin; of CE:rA deputies included
discu6s c,n final draft c?Gnc =rninfr the final_ arrar.gements for
the r: uula, ft::.ecir_; of Clr~III. which will. deal with the problem- of
`nor .ina.tion the aris if the participating Council
nations. In s d'J itior, the p l_,~xi for the mectir_ o of deputies from
Oct;,ber to Dcccvioc:r 13;7 di.;r?USS::d. Discussion of the question
of lw orr,;avi at?_un of S. ,.nc 1.alg C; mrici'cte: for Conctruction, on
th.= ba. is u i ;; c ui)::,a1,s njeadc i - %.C ntcrnation' ,1 neoting for the
developrr`n-;, of i.iutcl projcc ,,,, took place in Berlin from 21
to 27 Mey l-)5', also was carried out.
V
The Mectin of tho Standing C,;:f'eittec fcr Foreign Trade (Late October
to Early PJi, re*ih r 1 57)
. :he i'ol.lowia,; is on extract cif' sections four and five of the minutes
u this m eting. 'ilhis document was approximately fifteen pages,
co~-fered t1_ rc,e"ting of eight deputy ministers and was prepared for
the fort iga tr,-,de minister. Pc?rticipants in this discussion were
Kum, Pe rpeiiyev, Incze, Ita.a, and Kabanov. A working group to
prepar the fin;:,:. draft was :, ade up of Kohout (chairman), Salus ins zky,
? , Fomr.iar.., I'oicu, and Veli_~iy. Kohout reported concerning
measures for the further dcve1c Trent of mutually advanta. ;eons trade
rela.tiors of the participating countries of CEJ4A with economically
uricierdeveloped countries.
90. After tho discussion and t::?ca m ent of the report of the working Croup
concerning mcasu7?es for th^ fkrc'ner development of mutually advan--
ta 7oouza trade relations of tI,,c participating countries of CEMA with
economically underdeveloped countries, the committee considered it
nzcc:ssacy to -develop the ways and means which had been anticipated
by the Council. and the Standing Committee for Foreign Trade for the
aevelop~ne_ii of economic relations with the economically underdeveloped
ca,pituli.st countries. For the pI?rpose of further developing economic
relations 'th the economic..11y underdeveloped countries the committee
presented to the participating countries of the Council the following
reccirimendations:
a. To change to an increasing extent to the purchasing of co ..odities
directly from the producing countries in order, wherever possible,
/to avoid mediation through European firms. -
b. To extend the nomenclature of the co.omodities imported from the
underdeveloped countries, particularly the purchases of those
industrial. goods of which there will be a long-term den, and by
several of the participating_ countries of CEi'fiA.
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c. - Tn vie w -f the fact that it is rPCO nized that hebasis _ of
trride re1atic~s is the developne,rit of an :xchange of com-
mudities on a- bllatera s, toe exploitation of the pos-
sibility of multilateral trade and payment accords and
7perations, par-cicularly to balance the accounts in the
case of bilateral deliverlLs, is re oxi .endod--as are additional
means for the developmen~of trade.
Ir.. tradilv, with these ?c ur.trico the advantage is to be given
to State organizations, all conditions being equal.
1
107. In consideration of the individual questions and practical recom-
mendatione which deal with t}Ye 3evelopment of mutually advantageous
trade r?la.tions of the nar4 cin,atin, countries of MY, with the
eccnoi,.icall;j unri rd.ev .) ^pe 1 ~