JPRS ID: 9138 USSR REPORT INTERNATIONAL ECONOMIC RELATIONS

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• Content Type: REPORTS

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JPRS L/9138
11 June 1980 ^
U SS R Re ort
p
INTERNATIONAL ECONOMIC RELATIONS
CFOUO 2f8G~~
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JPRS L/9138
lI June 1980
USSR REPORT
INTERNATIONAL ECONOMIC RELATI~NS
(FOUO 2/so)
CONTENTS
USSR-CEMA TRADE
International Specialization of Production Viewed
(Yu. Kormnov; VOPROSY EKONOMIKI, Feb 80)......... 1
Bilateral Trade, Varioua Aepecte of CEMA Cooperation
- (VOPROSY EKONOMIKI, Noa 1, 3, 1980) 13
USSR-GDR Trade Discussed, by G. Mittag
Technological Progrese, by G. Gerteovich,
L. Drobyeheva
CEMA Integration in Tranaportation, by
B. Gorizontov
Conference on Economic Management, by Ye. Kogan
- a - (ZII - USSR - 38a FOUO~
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USSR-CII~iA TR.ADE
INTERNATIONAL SPECIALIZATION OF PRODUCTION VIEFTED
_ Moscow V~OPR,OSY EKONOI~IIKI in Russian No 2, Feb 80 pp 89-96
[Article by Yu. Kormnov: "The Rconomic Effectiveness of International
Production Specialization"]
~
[Text] The present stage of communist development--the stage of develop~d
socialism--objectively requires successive improvement of the entire system
for planning the organization of socialist social product-ion. The CPSU
Central Coaeai.ttee and USSR Cowncil of Ministers decree' "On Improving Planning
and Intensifyi.ng the Influence of the Economic Mechanism Upon Raising Pro-
duction Effectiveness and Work Quality" was a practical embodiment of these
requirements.
The measures contained wit~.~in it account for the many years of our country's
experience, for the achievements of Soviet economic science, and for the
experience of ather CEMA countries in this area. They also have their
foreign economic aspect, asid they require improvement of the methods for
evaluating the effectiveness of econon~c measures, which are affecting more
and more our state's foreign relations in production and economics, mainly
with countries of the socialist fraternity.
gnphasis upon raising the effectiveneas of social production is the most
important part of the economic strategy assumed by the CPSU and fraternal
parties of the CEN~, countries. L. I. Brezhnev stressed at the November
(1979) Plenum of the CPSU Central Co~mittee that "we must implement the
party's course toward greater effectiv~eness and quality with doubled and
tripled energy. There are no alternatives to this course, and it must be
followed unswervingly in the llth Five-Year Plan."
The international mutual relationships among the national economies of the
fraternal countries, which are growing stronger in the conditions of socialist
economic integration, offer additional external sources for raising the
effectiveness of production.
The practice of economic development and economic cooperation among socialist
countries demonstrates the unity of tYte fundamental theoretical premises and
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The Ministry of Foreign Trade, its associations, and the sector ministries
have been unable to rely on corrected outlays in their current work, inasmuch
as they maintain accounts with the state budget on the basis ot actual prices,
and not the estimated prices.
The general opinion boiled dawn to using not the corrected outlays but the
wholesala prices in the effectiveness estimates of actual production, the
_ latter being precisely the indicator that doaninates in the ties of inter-
national specialization; this would thus make the planned impact closer to
_ the actual khozraschet impact, and afford a possibility for its accounting
and control. This idea was laid at the basis of the "Interim Methodological
Directives for Computing the Economic Effectiveness of Specialization and
Cooperation of Production With CEMA Countries," which went into use in our
country beginning in 1973. Thie document recon�nended the followinq formula
for estimating the annual impac~ froan international specialization of pro-
duction:
3r = F 3x~l7rt - F 3oi~oi (E Boinoi - E B$~ nYt~ 3x.a. ~ (1) r
where ~r,--annual economic impact enjoyed by the USSR in re3ation to the
examined variant of production specialization; 3yf--nationsl economic outlays.
per unit "2" of specialized imported product; I~--annual volume of specialized
products acquired by importation; 33--national economic outlays per unit
of specialized export product; K--correction flctor for the foreign trade
exchange balance pertaining to the given agreement; S~--foreign trade price
of a unit of specialized export product; HH--foreign trade price of a
unit "i" of a specialized import product; 3K.n,--impact from production
concentration arising in connection with production specialization.
Here is a concrete example of using this formula: ,
Export Article A '
- 1. Wholesale price per unit (rubles) 2,300
2. Price surchArge for export modification (rubles) 700
3. Transportation outlays (rubles) ' 200
4. Autlays of the foreign trade organizations (rubles) 100 ~
5. Tatal national economic outlays (rubles) (1 ~ 2+ 3+ 4) 300
6. Foreign trade price free to border 4,500 f
7. Annual delivery volume (units) 200
8. National economic outlays on the total export
volume (thousands of rublps) (5 x 7) 660
- 9. Export volume in foreign trade prices (thousands ,
of conversion rubles) (6 x 7) 900
_ 2
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Im~qrt Article B
- 1. Wholesale price per unit (rubles) 2,500
- 2. Trnnsportation outlays (rublers) 200
3. Outlays of the foreign trade organizationa (rublea) 100
~4. Total national economic outlaya (rublee) (1 - 2- 3) 2,200 � ~
5. Foreign trade price free to border (conversion
rubles) 4,400
6. Annual delivery volume (units) ~ 150
~ 7. National economic outlays on the total import
volume (thousands of rubles) (4 x 6) 330
8. Import volume in foreign trade prices (thot~sands
~ of conversion rubles) (5 x 6) . 660
~
Let us assume furthesc that .K = l. 2, anc~ that the impact fraa? production con- '
centration, elicited by expansion of production on the basis of international
specialization, came to 80,000 rubles. Then the total annual impact of ex-
. port-import product exchange, cosaputed with formula (1), would be:
3r=330 - G60-}-1,2 (900 - 660)~--80= 3~8,000 rubles
The import product prices used in computations based on this formula may be
determined in different ways. The wholesale prices of dotaestic analogs are
used in relation to articles with technical-economic characteristics corres-
ponding to standards. effective in the USSR. If the characteristics of i.m- G
port and domestic products differ, then the prices of domestic analogs are
applied to the import product with the appropriate correction. If the im-
port articles do not have analogs in domestic production, then the prices
are determined by correcting the foreign trade price with an export effective-
ness coefficient.
As we know, prices perform more than an account~ing and measuri.ng role.
Z'hey reflect the usefulness, the consumer qualities of a product. It would
be suitable to consider all of this in effectiveness estimates when we are
dealing with economic measures associated with foreign economic ties. Of
course it would be incorrect to make a fetish of wholesale prices'as the best
~ among the cost measures to be ur~ed in computations ~f the effectiveness of
international specialization. This is why the method foresees correction
of the wholesale prices if the profitability they insure differs from that
set by the standards. Moreover interim prices must be replaced by permanent
prices. '
Application of the "Interim Methodological Directives..." as a state economic
atandard revealed, in a number of cases, disadvantages in presently existing
and planned specialization, and made it possible to eliminate these dis-
advantages. ~
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practical means for raising the effectiveness of social production within
CEMA countries, and of the economic ties among them, mainly along the lines
of international specialization and cooperation of production.
Etfactiveness estimatea are mr~de in the USSR in association with economic
substantiation of draft proposalr, recommendations, and treaties on inter-
national specialization and cooperation of production, during joint construc-
tion of facilities, and in the analysis, evaluation, and surveillance of the
actual effectiveness of cooperation. A mandatory prerequisite for this is
compliance with the priority of the national economic approach, and consider-
ation of the economic interests of ministries and business (industrial and
fareign trade) organizations. .
In most cases the diffe.rent comparable variants of satisfying the USSR
economy's need for importing particular articles on the basis of international
specialization of production may be set off in the USSR by a more or less
realistic alternative--satisfying these same production needs with newly
organized domestic production. However, it would be incorrect to interpret
such potentials as absolute, even in Soviet industry. The Soviet Union does
not possess certain machine building and other production operations. Organ-
izing them at a modern technical level and within the desired time period
would be unfeasible in a number of cases, and simply impossible in others.
What we need to consider here is the shortage or absence of output capacities,
the unpreparedness of logistical support, the shortage of capital investments, ~
money, or manpower, inadequate scientific-te~hnical foundations in the given
area, and so on. This pertains even more to other socialist countries typi-
fied by relatively small population, territory, and industrial potential.
To them, the alternative of setting Lp domestic production of all goods the
world can produce would be unrealistic.
We began estimating the effectiveness of international specialization of .
production in our country in 1968-19~2 on the basis of corrected outlays.
The experience af these years 3emonstrated the difficulties of acquixing
practical information with which to compute corrected outlays for the
hundreds of articles covered by treaties of international specialization.
- Moreover these computations wexe not associated with the financial results
of the khozraschet activities of production enterprises and foreign trade,
as defined by wholesale prices. A discrepancy took form between the
~ effectiveness estimates made in the planning stage and the actual effective-
ness witnessed during implementation of agreements for production speciali- .
- zation.
I should stare that the results of projected estimates of the effectiveness
of different variar~ts of international specialization, made from national
economic positions, do not have a direct influence on the producing enter-
prises. The financial results of their activities are deteiznined from the
difference between domestic wholesale prices, to which surcharges have been
added to cover the additional ~utlays associated with modifying products '
for export, and production costs. Nor are they aware of the foreign trade
prices, inasmuch as for~ign trade associations handle accounts with foreign
partners.
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Meanwhile the~foreign economic conditions underwent change. Prices in the
world market began to qrow sharp~y starting in 1974.: The ('~MA countries
were forced to convert to a sliding scale of contract prices in mutual trade--
. that is, to settinq these prices annually as an average of the 5 previous
yeara. This made it more difficult to deterntine, for concrete articles,
the foreign trade prices to be used in estimatea of apecialization effective-
ness, and it made.it nec~asary to improve the forecasts of such prices re-
ported by subdivisions of the Ministry of Foreign Trade and organizations
suk~ordinated to it to the sec~tor ministries. ~
Heing a national standard-settinq document, the "Directives..." include
within themselves the sum total of requirements and intormation pertaining
to all of the different committees, departments, ministries, and business
organizations. Such is the unique nature of a national, comprehensive
approach. As A. N. Kosygin emphasized at the 25th CPSU Congress, not only
the Central planning and foreign trade organizations of our country bizt also
all other ministries and departments are obligated to guide themselves by the
criteria of national economic effectiveness in resolving their foreign eco-
~ nomic problems.
Of course a national approach must also account for the interests of the
ministries, departments, associations, and enterprises. On this basis I
will~ attempt to sugges.t a number of new methodological premises. In essence,
they are: First, achieve compatibility in the methods used to determi.ne the ~
effectiveness of the USSR's planned and actual participation an international
specialization of production toqether with other fraternal countries= second,
compute the impact at different levels and from different positions: national
(1), producers of export products (2), consumers of import products (3),
foxeign trade assaciations--the iuunediate exporters and importers of products
(4) on the basis of agreements on international specialization.
Assessments of effectiveness at each of these levels may produce ambiguous
and even contradictory results. By simply revealing this and clarifying the
causes of the discrepancies, we could take steps to eliminate them from the
priority positions of national interest. We can also continue to make general
evaluations of the impact from national economic positions using formula (1).
Inasmuch as all specialization of production, including international,
would be unimaginable apart from concrete producing enterprises, the effective-
ness estimate must also be made at this level. From a practical standpoint
we can reduce this to simply establishing the profit enjoyed from the pro-
duction of export products and their sale by foreign trade associations using
the following formula:
_ 3upoaa. _ (1.(a - Ca) ~7a ~ (2)
r
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where ~pOH3--total profit; I1~--price of products transferred by the in-
dustrial er~~erprise to the foreign trade association, together with sur-
charges for modification of the products for export; ~--cost of manufacturing
the sacne product; II3--vfllume of products delivered for export. If in this ~
case specialization has the influence of reducing the cost of products sold ~
in the domestic market, this impact should also be accounted for.
Some economists feel that only the excess above the enterprise's average
profitability should be considered in the impact from international speciali-
zation--that is, they suggest using the following formula: ~
3n = ~ [ue ~ Ca -I- ExKa) ~ na � (3)
As we can see (in the brackets), the impact is represented here as the
difference between the pric~ ~,zd the cost, reduced by the amount of the
seaond factor of corrected outlays. To put it more briefly, if the country ~
is to participate in international specialization, the profit would have to
be larqer than what could be obtained within its own national economy. In ,
my opinion this is not right. Socialist acono~ic integration must not pro-
duce a situation where a specialized article is obtained frum a socialist
partner for more than the cost of manufacturing the same article domestically.
Therefore we need not add any other factors to our computation of the impact ;
of specialization at the enterprise level in order to underst.and the economic
interests the enterprise might have in its inclusion in international special-
ization. Use of this formula would in fact always lead to a negative impact.
Let us now try to evaluate the impact of productive use, within the national
economy, of inport products delivered on the basis of international special- .
ization in the production of finished articles.. Another.thing we can do here
is, naturally, compare the impact at the national economic level. Hundreds
and thousands of enterprises are the users of particul~r machinea. They use
the equipment ta different degrees (th2re are differences in intensity of
us~, amount of use per shift, and whole days of work per year)~, and they pro-
duce products with differing profitability. In view of this tlie impact of
using the same machine (equipment) varies at different enterprises. It is -
impossible and, moreover, unnecessary to reveal this i.mpact with a bookkeeper's
accuracy and then sum up the impact on a countrywide scale.
We would have to limit ourselves to establishing an estimate of the impact
enjoyed by the country as a whole from using the import product~delivered in
~ccordance with international specialization, in comparison with a domeat~.c
product, and from the position of the khozraschet interests of the importing
ministries, for example the Ministry of Chemical Industry if we a~e talking
about agreements for specialization in chemical machine building. In the
eyes of these ministries, this impact would as a minimum take the form of ,
lower depreciation deductions~and capita~ payments per unit of product.
Mozeover the impact may assume numerou~ other concrete manifestations de-
pending on the sphere of application of the given piece of equipment.
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Finally, we can approach.an assessment af the "foreign trade" part of the
impact of interr.ational specialization, which takes the form of the difference
between~wholesale and foreign trade prices (corrected~to the units in which
wholesale prices are expressed) on exported and imported articles.
This impact would be defined as follows in relation to importation of a
specialized product:
. _ - . _ . . _ ~
3atR~EuA�e�II~-Eueca:�Ilg, ~ ~ ~
where LTH--outlays of the foreign trade association (the i.mport price in con-
version rubles per unit product; surcharges and comm:~sions); e--ruble con- -
version factor; I~-quantity of iunported product; ITHC~-import pzice to
the national economy (rubles).
The fir~t factor of this formula describes the outlays of foreign trade
associations in relation to importation ot the speciali~ed product, and
~ the second repzesents the qain from its sale to Soviet consumers.
The foliowing formula may be used to compute this impact in relation to
3 exportation af a specialized product:
3era = E ua � e� 11a-E uon' 17a, (5~ . .
where IJ,3--the export price obtained, in conversion rubles, per unit product,
minus the surcharges and comanissions of the foreign trade associations;
I1qn---wholesale price at which the product would be acquired in Soviet enter-
prises; I~--quantity of exported product.
The Ministry of Foreign Trade (the appropriate administrations and foreign
trade associations) possesses all of the inforn~ation it needs to compute
the foreign trade impact using these formulas; it is capable of evaluating
the actual impact in a pYevious period, and a planned impact, though with
price information that is af lower reliability due to the difficulties of
forecasting foreign trade prices, considering their growth in the worlcl
market. A positive result from formula (5) would mean that foreign trade
organizations have managed to preserve or increase the impact c.reated within
the production sphere, while a positive result from formula (4) weuld mean
that they acquired the product at greater expense than it would have cost to
manufacture it in the country. The total impact of the country's partici-
pation in international specialization would be defined as the sum of the
impacts enjoyed by the producing enterprises, the consumers, and tlie foreign
trade organizations.
The advantages of the "itemized" method of effectiveness computation at four
levels (national~ the production enterprise, the sector ministry, and the
foreign trade organization) are that it permits us to reveal the unit within
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, which the impact is created or lost, to eliminate anonymity, ~nd -
reveal reservES. If one unit produces a beneiit~and another causes a loss,
we could establish that industry and foreign trade have different degraes
of interest in the given variant of s~,ecialization, and we co{tld ~lan out
practical corrective actions. If in the course ot implementing an agreement
of internati~nal specialization the producer experiences a loss, after
analyzing its causes, if the cor~ditions warrant we could increase the sur-
charge for modification of the product for export. This would be suitable
whenever the impact from fmreign trade is concurrently unjustifiably high.
On the other hand when the producer enjoys a relatively high benefit and '
foreign trade simultaneously suffers a"loss," we could raise the issue of~
reducing the price at which the foreign trade association acquires the
product. If this turns out to be not enough, then we would have to make
allocations from the budget. In a small number of cases such subsidization
does in fact occur. But it is concealed, anonymous, "dissolved" within the
overall result of foreign trade activity. A less-than-desired impact from
trade, for example, of machines would be covered in the end in the foreign
trade balance as a whole by the gain from sellin~g, for example, consumer .
goods in the domestic market. In my opinion it would be muc~n better for
natiana'. control of the impact from international specialization tu witness
the concrete result of cooperation in every sector ministry and in every ,
- laxge production association, as well in relation to ever~ agreement on
production specialization, and to focus the attention of the appropriate
state organs on this, sc that they might take the necessar~~ steps promptly
to insure ~ontrol, through the ruble, of khozraschet activities in not
o~ly the domestic but also the foreign economic sphere. .
The use of factor "e" to convert from conversion rubles into Soviet rubles
i$ especially important. In our country it has been assumed close to unity _
for a period of many years. It is difficult to agree that this is sensible.
The fact is that contracted prices on goods involved in mutual deliveries
among CEMA countries, expressed in conversion rubles, have been growing
(~though to a lesser degree than world prices) on the background of stable
wholesale prices in our country for more than 10 years. Use of factor "e"
in computations of the economic effectiveness of international specialization
without cc~nsidering these,circumstances may lead to errors in the results,
~uid in th~ conclusions deduced from them.
E:tercising a monopoly in foreign economic ties, the state regulates, through
planning, the volumes and geographic orientations of export-import ties,
to i~clude those involving production specialization. Conversior~ factors
have become a powerful economic regulator in CEMA countries,. through which
the state implements its foreign economic policy. These factors are differ-
entiated in relation to th.e countries to which goods are exported and from
which goods are imported, and in xelation to currencies; they change in tinne
with a consideration for the foreign market r.onditions. It stands to reason
that this in no way dim.inishes the dominant significance of direct planning
assignments involving exportation and importation of a concrete assortment
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of articles. Experience of thie sort ahould be considpred in our cauntry
as wetl, though naturally with a consideration for the unique features of
our national economic complex, and of the national economic planning and
control system. I feel that as a minimum we muet chany~ this tactor such
that it would compensate for the discrepancy in the contracted and doaaestic
wholesale prices set for particular qroupE of articles. Fran my point of
view there are qrounds for di.~ferentiating..these fact~r~ in relation to
different ministries as well.
Assuming the road of international specialization of its production, every
country tries not only to reduce its outlays but also to obtain a suffi-
ciently high foreign trade price. While the former depends mainly or -
entirely on the particular country and its economic organizations, the
latter depends on other countries, the partners in.specialization. They
also want to purchase products cheaper and sell them dearer. This natural
_ "incompatibility" of the positions of nationally independent concrete
socialist merchants and customers must be kept in mind as a reality, so as
not to enter into fruitless elusions and methodological abstractions. We
must consider the existing differences in the national economies of the
socialist countries at the present stage, the levels of their economic
development, their labor productivit.y, the standard of living, presence of .
national aurrencies and pricirig systems specific to each country, and the
unique features of economic estimation and accounting.
The different variants of international specialization may be optimized only
if we consider the realities mentioned above, and if we orient ourselves
at crea;-ing enterprises and production operations producing specialized
products optimum to the fraternity of CEMA countries as a whole and satisfying
the requirements of scientific-technical progress, ones that raise labor pro-
ductivity in each of the fraternal countries; all of this must be examined
from the standpoint of not only the internal conditions of the given country
but also the highest levels achieved by the enterprises leading the world in
relation to the concrete production operation.
T:ie problem of evaluating the economic effectiveness of international _
socialist specialization of producti.on cannot be reduced to just establishing =
the impact enjoyed by each country alone, independently of the interests of
and the benefits enjoyed by the partner c~untries in the fraternity.
We cannot limit our considerations to just receiving as much income as possi.ble
for ourselves, especially aue to the di�ference in foreign trade prices, ~
rather than primarily through mutually coordinated mobilization of the re-
serves of effectiveness contained within production itself. I am fully in
agreement with O. Rybakov's opinion that development of socialist economic
inteqration and implementation of long-range specific programs of coopera-
tion require development and practical introc~uction of inethods for evaluating
the effect.iveness of such integration from ti~e standpoint the interests of not
only the individual countries but also the CEMA fraternity as a whole, or in
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any case frarn.the positions of the cou~tries interested in the given con-
crete variant of international specialization.*
We could e.r.joy decisive victories o~rer capitalism in scientific-tecYinical
progzes~s by acting together, rather than apart; our cooperation must begin
with resolving issues associated with production and.production processeg,
and it must end with enjoyment of a benefit by all intereated qountries. ~
The collective nature of socialism is one of its main advantages,~.and it
must be capitalized upon to the fullest extent in mutual foreign economic
~ ties. ~
Computing the effectiveness of different variants of coo,peration fram
different positions is not just within the realm of theoretical explorations= -
_ it has to do with the immediate future. In some torms of cooperation it is
already a present, concretP tzsk. As an example we become directly.involved
with it in scientific-technical cc~operation based on agreements signed by
international scientifi.^.�-technical organizati4}~s, or in the case of pro-
duction cooperation taking the forms of joint construct~on and joint opera- I
tion of enterprises. In these fo~cns, the cost parameters describing outlays
_ and the impact of cooperation are obvious to all partners, and they are de- '
termined, accounted for, and distributed j.ointly.
~ ~ ~
Effectiveness assessments made from the positions of comanon.interests may
suggest possible directions of change in the scheme of division and coopera- ;
tion of labor anong the socialist countries, and the steps that we would need
to take to alter intersector ties within countries and among them and to
multilaterally redistribute the benefits directly affecting the economic -
interests of the partners. I should note that the methods of evaluatinq the
economic effectiveness of international production specialization from the
standpoint of common interests of the countries were developed back in 1967.** .
These methods required the use of criteria of maximization of impact or ~
minimization of outlays.
It may be asserted, however, that such estimates have not been made many !
times by CEMA organs developing the variants of international pro3uction
, specialization; they did not do.so for a number of reasons involving diffi-
culties in exchange of comparable information, the m~thods for recomputing ~
outlays and impacts on the basis of identical cost yardsticks,.and so on.
These real difficulties in seeking out the variants of international .
specialization beneficial to all member countries and optimum in relation .
to modern world standards from the standpoint of technical~progress and . ~
concentration of production are surmountable froan my point of view. In the
end, the main thing for all. CEMA countries to do is to organize new production
* See Rybakov, O., "The Effectiveness of the USSR's Participation in
Socialist Economic Integration" (PLANOVOYE IQi02YAYSTVO, No 1, 1979, p 25).
These methods were documented in the "Methods for Determining the Economic
Effectiveness of Capital Investments by CEMA Countries," approved by the CEMA ~
PPrmanent Commission for Economic Problems.
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operation~ or reconstruct existing ones on the basis o~ internat~onal
sp~acialization in a w~y which would in fact accelerate scientific-technical ~
progresa in all of its diverse manife~tations and promote intensification of
ef~ective production concentration. ~'he iseue of spreadinq the impacts aarong
the countries would in this casa drop to ae~ondary importance as predo~ninantly
a crnmnercial question, a derivative of that which would occur in ~he produc-
tion sphere 3tself in relation to production qualit~r and ou~lays, eince
without the latter the overall impact would no~ increase at all.
This is why it is more important to direct the com~non efforts of the ~
fraternal countries at accelerating scientific-technical proqress--not at '
any price, but at the lowest price poasible. World practice has a reliable
qual'itative criterion by which to judqe such progreas, namely the volume of
specialized production that is optimum from the technical.-economic standpoint
~ and which is ':ypical of the world's progressive firms, ones which lead the
_ world market in relation to the particular product, mainly iri terms of its ~
quality.
Within the CEMA framework this criterion transforn~s into the principle of
concentr�ation of the production of` the same kind of product within the lowest
possible number of countries. It is asswned in this case that production
would be simultaneously concentrated at a smaller number of plants as well. ~
But unf~rtunately such proposals do not always reflect the realities.
5pecialization of a country in theoretical.and practical respects, at least
in application to machine building, is becoming a not entirely correct con-
cept, if it does not simu~taneously i.mply specialization of a concrete enter-
prise. Rather than raisi.ng the effectiveness of production and ~e technical
level of the product, "specialized countries" not possessing specialized
enterprises outfitted with modern equipment and using the most sophisticated
processes would experience a~growth in production outlays, a drop in the
product's market competitiveness, and a decrease in the rate af scientific-
technical progress.
Naturally the outlays to.produce the same product may vary at enterprises
in different CEMA countries that a~e identiical from the technical standpoint.
However, it would be proper to ignore these differences, since they are only ~
genprated by transitory factors, for example by differences in the ski11
levels of the workers, which are beiag eliminated as socialist integration
progresses, as the fraternal countries come closex economically, and as the
levels of industrial development level out on the b;:sis of introduction of '
the most sophisticated equipment, production processes, and production
organization practices.
From my point of view the approach from the positions of the common interests
of the socialist countries to selection of effective variants of inter-~,
national specialization is an approach frotn the positions of technical pro-
- . gress at concrete production facilities. This.is the concept decisions of
the 23d CEMA Session require us to accept. Hence follows the need for making
certain changes in the essence and order of international specialization
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and cooperation of production with3n the CEMA framework, on the basis of
international economic organizatians, and on a bilateral basis. In my
opinion we must raise development of i:he~variants of.specialization and
cooperation to that of concrete,production associations, going b~yond the
country level. Life itself, examples of the effective work of truly
specialized plants operating within the ~EMA framework in a r~umber of
countries, and concentration of tYxe attention of~the countries in recent
years upon concrete integrated facilities--plants, mines, combineao nipe- =
lines, and s~ on--confirm the validity of this idea. 3uccessive iia~le- ~
mentation of this idea would make it possible to concentrate attention ~ -
upon concrete measures affecti.ng production direct]:y, upon concr2te ~
plants, with the pur,pose of improving orqattization and raising the economic
�effectiveness of production. This will be helped along by completion of
the tasks posed by the 22d and 23d CEMA sessions, which require CEMA organs
and international economic orqan~.zations to interact mainly in the production
sphere, to implement long-range e,pecific pragrams of cooperation,~a~d to
accelerate scientific-technical progress in the fraternal ~~wxtries, capi- .
talizing upon the advantages of international aocia3ist specialization and
cooperation.
COPYRIQiT: Izdatel'stvo PRAVpA, VOPROSY EKONOMIKI 1980 ~
11004
CSO: 1825
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USSR-CEMA TRAUE '
BILATERAL TRADE, VARIOUS ASPECTS OF CEMA~COOPERATION ~
USSR-GDR Trade Mscussed
Moscow VOPROSY EKONOMIKI in Ruasian No 1D1980 pp 90-96 ~
[Article by G. Mittag, Politburo Member, Secretary of the CC of the
Soci.aliat Unity Party of Germany, GDR: "The Development of the
Economy of the GDR and the Deepening of Cooperation with the USSR"] ,
[Text] The German Democratic Repuhlic is confidantly moving along the
path of the conetruction of a developed socia].ist society~which was
' mapped out by the decisions of the Ninth Congresa of the SEDG. The
GDR ie an inseparable component part of the socialist commanwealth and
ita fraternal alliance with the USSR is indestructible. This became � .
especially manifest during the celebration of the 30th anniversary of
the GDR. .The anr~iversary of our republic took place under the sign of
a visit to the GDR.by a Soviet party and government delegation and
acquired a truly world significance ~.n connection with the rPmarkable
apeech that was given by the head of the delegation, the Gene~ral Secre- ~
tary of the CC CPSU and Chairman of the Presidium of the USSR Supreme
Soviet, Comrade Leonid I1'ych Brezhnev at a festive meeting ia the
capital of the GDR Berlin. It can be said with every right that the .
national holiday of the GDR developed into a mighty demonstration of
the indestructible friendship and solid fighting alliance between the
Socialiat Unity Party of Germany and the Communist Party of the Soviet
Union, between our states and peoples.
During the visit by the~ Soviet party and government delegation a Program
of Production Specializat3on and Cooperation between the GDR and USSR
Until 1990 was signed. Without exaggeration it can be said that this
document from the.point of view of ita principle points which provide
for a unification o� efforts in the name of a comprehensive strengthening
of real socialism has already acquired historical importance.
In his apeech the General Secretary of the CC of the SED and Chairman
of the State Council of the GDR Comrade E. Honecker clearly defined the
place of our country in the world revolutionary movement. "Thirty years
of the German Democratic Republic," he said, "represent thirty years of
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I.
1~OR OT~lxCIAL USB OI1LY � .
~ . i
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etruggle for peace and socialiam and a convincing proof af ~the victorioue i
march of the ideaa of Marxism-Leniniem. The very fact of the existence
of our republic in the homeland of Karl Marx and Frederich Engele and of i
ite inaeparable connection with the great commom~ealth of eocialiet states j
clearly demonetratee that we live in the kind of~era in alhich an ever . ~
increasing number of peoples are aelecting the socialist path of ~
development."'~ ~
~And we are very happy about the worde of L. I. Brezhnev to the ~fiect ~
that our socialiat $tate the GDR haa.been able to cope with its ;
hiatorical responaibility. "For my part, I.want,to emphas.ize," L. I. ~
Brezhnev said, "that in the Commdunists of the German Democratic Republic
- and in the people of the GDR we have seen and continue to~8ee reliable
comradea-in-arms in our common cause who are faithful to our common
great ideals, persistent aad skillful in labor, and ateadfaet tn the face
of any trials."2 The content of the policies of the SED and ita every- . '
day work are aimed at always ~uatifying thia evaluation. Faithful to
the behests of Ernst Talmann, the SED looks upon a coastaat deepening
of the fraternal alliance with the Leniniet Communiet Party of the ,
Soviet Union as the highest r.equirement of its entire policy. ;
The great gains of the fraternal Soviet people in the construction of
socialism and communism give rise to feelings of deep sympathy and �
delight in the people of the GDR. By succeasfully implementing the i
decisions af the 25th CPSU Congreas the Soviet people is to a.deciaive j
extent helping to etrengthen real socialism in its favorable.influence
on the course of the development in the entire world. The consistently
in~ernationalist policy of the CPSU is playing an outstanding role in
ensuring peace and atrengthening the commornaealth of socialist statea ~
and in fostering the achievea?ent of new aucceases in the struggle of ~ i
peoples for their national and eocial ~.iberation.
The GDR has arrived at its~30th anniversary with enormoua euccesses in
- the development of ite economy and culture. It looke with optimiam to
the future. The successes of the GDR are a result of the fact that
after the defeat of Hitlerite fasciem by the glorious Soviet Army, the
working cYass and~its allies, under the leaderehip of the'SED, and
making use of the his~orically developed situation, eliminated the old
political and economic relationahipe of imperialism, establiahed the
political power of the working c1~ss, and, in this way, opened the way
to a new, socialiat society. With this a radical turn'in the history ~
of the German people was realized. The development of socialiam in the
GDR has been and is being accompanied by a constant strengthening of
its economic might. Frc~.~~ the very beginning the chief~precondition for
this has been the development of a socialist plauned economy which has
1. PRAVDA, 7 Octoher 1979
2. Ibid.
,
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made it poaeible to direct material and apiritual fa~rcee toward the
achievement of a siagle goal~ to enaure a rece~sion-free continuous
growth of the economy, and to conetaatly increase the economic potential
of the country ia the intereata of its worlcere.
~ . . �
Ae a result, a s~rong and powerful induetrialized eocialiat state with
a dev~eloped agriculture has ari~en ia the center of 8urope~on the borders
of impeiialist states. Over a period of three d~cade~ .the aational
income of the GDR has increased from 22.4 billion marka in 1949 to 161.1
billion marka in 1978. That is, by more than 7 times. Capital invest-
ments during this period incr~ased, respectively, from 2.$ billi.on marks
to 50.8 billion marks or by 17.5 times. In 1949,.29,800 apartments were
built, and in 1978, 167,800; that is, 5.6 times more. Ia addition,
the quality of houaing and ite outfitt~:ng with modern conveaiences hawe
improved beyoad meaeure. Retail commodity turnover~incxeased from
13.8 billion marks ia 1949 to 92.5 billion marks in 1978.
Socialiet industry has and continuea to play a decis~.ve role in the -
- strengthening o~ the economic might of the country. I~ has developed
quantitatively, and has changed and is changing its s~ructture. In place
of the deformed industry which reaulted from the war and ttie achismatic
policy of the western powers, a modera, compreheneively developed, and
powerful socialist industry hae growa up on the territory of the GDR.
Compared with the preward level of the entire.indus~ry of the former
GPrman P.eich, the production 1.evela on the territory of. the GDR in 1949
were 2.9 percent for hard coal, 1.6 percent for iroa, 7.6 for raw ~
steel, 5.0 for forgings and preased producta, 8.0 for 1ead, 6.0
for tin, 15 reducers and roller bearings, 11 elea~ric motors
(more than 15 kilowatts)., 17 cement, and 10 p~rcent for window glass.
The o~iy minerals which exist in sufficient amounta in the GDR are
brown coal and potassium. ~
As a result of this, subatantial efforts were needed to create a balanced
multi-branch industrial~structure. A number of branches ot industry '
have developed at especially rap3d rates. For~example, compared to
1950 the production of electrical engineering and elecfronics had
inereased in 1978 by 22 times, machine building and transportation equip-
ment 11.7 times, the chemical induatxy 10.9 times, and metallurgy
9.4 times. New branches of induatry which produce products that
were not produced in the GDR in 1950 have arisen. They include, in
particular, the production of plastics, aynthetic resina $nd fibers, ~
transistora, television aets, maritime ships, combinee; machine toola
with digital programmed controls, and round-weaving knitting machinea.
As a whole, industrial production in 1978 had inereaeed compared to
1950 by 8.4 tcimes, and the proportion of industry in the national income
produced ia the GDR came to 60.4 percent compared to 42.2 percent in
1949.
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dUM Ul~'1~1l;lAL U1L~ UtlLY I
. i
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The establiehment and strengthening of the econamy of the GDR is
ineeparably bound up with ite constaatly deepen3ng and compreheneive
cooperation with the US3R. This can be eupreased even more clearly: �
the strengthening of the economic might of the GDR oa tlie ba'sis of ita ;
own efforts is the result of the constantly deepeaing cooperation~between ~
the GDR and the USSR. Th3s is a logical consequence of the comonon ~
social principles, single ideology, and genuinely internationaliat ~
relations of our countries.
The USSR has.been and continues to be the largest and moet.important ~
foreign trade partner of the GDR. In acutal prices foreign trade between ;
the GDR and the USSR increased.from 215 million rubles ia 1949 to 7.7 !
billion rubles in 1978. The USSR's share in the tdtal foreign trade
turnover of the GDR exceeds one-third. In ite turn, the..GDR's share in ;
Soviet exports comea to 12 percent, and in imports to 10 p'erceat:
Our republic is a ma~or foreign trade partner of Che USSR.
The development of trade relatione between the GD~.t and the USSR is .
characterized by great dynamiem, espe~ially in the period after the
Sth Congreas of the SED which took place in 1971. During~the years
1970-1978 mutual com~odity exchange increased by 2.3 timea, and its
absolute increase came to around 4.2 billion rubles, which is approxi- ~
mately equal to the total turnover between the GDR and~the USSR in 1974. '
~
A further intensive development of commodity exchange is taking place . ;
on the basis of the high.level of economic and scientific and technical ~
relations which has been reached. During the last two yeara~alone ~
~ (1977-1978) commodity exchange~between our countries came to 14.4 b~illioa ~
rubles, which exceeds the commnodity exchange during the five-year period
1966-1970. ~
The dynamic development of economic.and scientific and technical rela-
tions between the GDR and the USSR is being accompanied by qualitative ,
changes in their structures. The large Soviet deliveries of fuel,
mineral raw materials, and metals are of great importance for the GDR.
~They provide decisive help in meeting the growing needs o� GDR indus- '
trial production for raw materials. High development ratea are charac-
teristic for the exchange of machine building and~electronics output
which is especially important for the intensifi.cation and ratiomaliza- ~
tion of the production of both countriea. During t'he yeara 1976-1979 ~
alone the proportion of the products of the metal~working industry ia
total GDR exports to the USSR increased from 63.6 to 7]. percent.
With ite exports the GDR is makiizg a contribution to supply Soviet '
enterpris.:s with modern equipmerit, including microelectronice~ to a
rich assortment of consumer gooda which are in keeping with esthetic
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demands, aad to the further mecbanization of agrieultuse and the
eolution of other important national economic tasks. Thus, compared
with 1976. in the exports for the US3~t which~are planned for 1979 deli-
veries of computero of the ES-2640 type will iacreaee by 46 percent~
hay-mower~ a~d cotton-conbing mschinee bq 59 percent, automatic
telephone E]CCt18A$P.B by.67 perceat, ~craper craneg by 93 percent,
and molding machinea by 550 p~rcent. During this eame period the
Soviet Union will inerease ite d~liveries of, for eYample, active
electrenic instruments by 107 perceat, cineacopes for color television
by 108 percent, EO'type excavators by 150 perceat, and modern
T-150 tractors by 400 perceat.
The dynamica of the mutual deliveriea.and purchases are to a high
degree determined by production:specialization and.cooperation. Stable
- lines of ttie division of labor and of apecializatioa and cooperation
have developed. ~he~basic elea~ente in the sp~cialization and cooperation
of the GDR and USSR are the products of machine building and.of the
electrical engineering and the ~lectron~c industries and~the output o� ~
the chemical industry~ As a result of this development the GDR is now
exporting the foller~ing percentagee of its total output to the USSR: .
passenger railroad cars 80 percent, memory oa magnetic tape --.80
percent, shipe 70 percent, sutomatic telephone exchaages 70 percent,
mulcher-mowrers 60 percent, refYigerator trueks.-- 60 percent, tele-
types 55 percent, and cold molding.metal-working machine tools 50
percent.
Cooperation in the field of se3ence and technology and also production
- cooperation are developing on the baeis of more than~110 i~tergovern-
mental agreements. Some.of their effect goes far beyond~the year 1980.
In this way, they are deteranining a~ubstantial psrt of the atrategic
directions and chief taeke of the direction of labor between the GDR and
the USSR in importaat branchea of the economy until 1990.
All of the facts which have been cited and others also confirm that the
structure of ecos~omic relations between the GDR and the USSR is deve- .
loping very intensively in the direction of a mutually agreed upon
exchange of finished products. The experience and result~ of all of the
work to deepen specialization and cooperation which has been done over
a period of three decades by both.of our states testifies to the fact
ttiat in accordance with the deci~ions of the fraternal bodies the
SED and CPSU, qn' increasingly full c~onsideration is being given to
the objective demands for an accelerated unification of th~ potentials
of our countries.
Thanks to the pro~ram of production ~pecialization and cooperation
between the USSR and GDR for th.e period until 1990 which was worked
out in accordance with the Crimea Agreement of the General Secretary of
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the CC CPSU and Chairman of the Presidium of the L'SS8 Supreme Soviet .
L. I. Brezhnev and tl~e General Secretary of the CC SED and Chairman of
the State Council of the GDR E. Honecker, a new and higher level of '
economic and ecientific and tech~?ical cooperation w~.ll be prepared aad
reached within the framework of ~ocialist economic integration. Thie '
program maps out in a long term'plan the chief directions~for the further
coming together of our economies. It embracea the divieion and coopera-
tion of labor between.the GDR and the USSR in all of the important
branches of the economy. Thie kind of development i~ ful~ly and entirely
in accord with the letter and spirit of the Treaty on Friendehip, . �
Cooperation, and Mutual Aesiataace between the GDR and the USSR. ~'hia ~
extremely important task is already in t~e stage of realization. The
enormoua ~oint work which'is directed toward the ft~ture and:toward the
further successful development of our countries is developing in an .
atmosphere of brotherhood and communist mutual understauding in the name.
of the common task of socialism and commuaism. The SED attributes very
great and principled importance to the fulfillment of this program, for ~
in its concrete measures there is a reflection of the basic principles
of cooperation between the GDR and the USSR. We are spea&ing about a
close and continuing cooperation in the basic iseues of economic deve-
lopment which is leading to an increasingly deep interweaving of the
economi.es of both countries. Cooperation with the USSR has always been
regarded in the GDR as a~mobilizing and vitally important proceas in the
- genuine sense of these ~zorde which ie characteriatic for the present and,
especially, f~r the future development of our country.
The further work on the apecialization and cooperation program reflects
a new stage in cooperation which is being determined by the social .
progress of both countries. In the USSR a developed aocialist society
has 3een built and the material and technical b~se of communism is being
created. The GDR is following the path of constructing a dev~loped
socialist society. The ne~ level of cooperation is also a result of the
growing dimension~ and breadth of the interweaving of our national
economies, the modern tendeneies in the dedelopment of the productive ~
forces and of technological processes, and a further strengthening of
the superiority o~:sonialism over capitalism. We are apeaking about a new
level of cooperation in the overall procees of deepening the internatioaal �
socialist integration ~vhich was mapped out by the Overall Progrant for
Integration and by long-term special-purpose cooperation programs.
The development and realization of the production specialization and
cooperation program is aimed at increasing the efficiency of the econo-
mies of our countries. W:1at ie involved is the further growth of the
economy and a gradual change ia its production structure which, above
all, thanks to its orientation toward a subetantially fuller use of raw
materials and toward a higher degree of their refiaement~ serves as a ~
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fundamentally new approach in increasing labor productivity in the
field of high quality producta ~rhich promote the introduction of genu-
inely new technologies and whi.~h enaure highly effective exporte and
include a quslitative improvement of the aseortment of conaumer goods.
These goals are to a large extent determined hy the level of the produc-
tion specialization and cooperation between the GDR and the USSR.
The proportion of the exchange of high quality products and technologies
on the baeis of this program will exceed the by no means low level which
has to date been reached. However, this is not the only point. In
economic practiee it is customary to operate with generalized indicatora
and conaolidated positione. Let ue take, for example, the position of
- "machine tools." What ie the nature of the machine tools which we today
aupply to one another compared with those produ�ed ten and twenty years
ago, and what will th2 nature be of the machine tools which will be
produce.d in 1990 within the framework of the realization of the speciali-
zation and cooperation program? Surely, during that time the replacement
of generations of machine toola will take place. The tendency is such
that machine tools with electroaic programmed.controls will be predomi-
nant, and ~we will be exch~ngi~g not so much metal as electronics. And
this itself .changes the structure of relations. At the same time,
specialization and cooperation will include campletely new machines and
instrument systems. This has to do, for example, with the entire wide
set of the output of microelectronics, and also with the equipment
necessary for this and the products based on its use. But this also
applies to other products such as new materials, new transportation
equipment, new installations and technologies in the field of nuclear
equipment, and othere.
With technological progress the~assortment of products will become
broader in our countriea. New possibilities will appear for optimal
apecialization~and cooperation which will lead to an improvement of the
structurea of our economies and to their increaeingly supplementing each
other. On the basis of an expansion of the assortment of products
thanks to which we will accelerate scientific and technical progress
both in the interests of introducing new technologie~ and of producing
new consumer goods and prodt~cts for export which are~in demand on the
world market new possibilities will naturally arise for specialization
and cooperation in the field of the production of units for specific
groupa of products.
It is essential to create the conditions which make possible the intro-
duction into production oF the latest in technologies and the most
effective scientific and technical achievements much more rapidly than
has been the case to date. The GDR regarde it as its task to make an
even greater contribution to this work in the interest of the dynamic
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growth of its economy and the fulfillment of its commitments to the
USSR and the other CEMA countrie~. The chief iasue here is an increase
in ehe economic might of our country ae a whole and a strengthening of
the material and technical base necessary for this. -
The Tenth Plen~n? of the CC of the SED placed the queation of strengthen-
ing the economic might of the GDR at the center of the attention of the
party. This involvea~ above all, an absolute priority for the material
a~d technical base. After a careful analyeis and broad diecuasion of
these questions, the Ninth Congress of the SED mapped out the b$eic
orier_tations with respect to the formation of the most important economic
complexes. They include a strengthening of the energy and the raw
materials base, the dPvelopment of the production of consumer goods and
of the sphere of services~and trade, the production of equipment for
the economy and far export, the development of construction~ the tasks
of transportation and communications, of agriculture and timber resources, -
and of the food industry, and also further social development in the
village.
After approving the economic complexes, the Ninth Congr~ss worked out
the basic directions for strengthening the ma.terial.and technical bas~
of the GDR. They embrace all of the problems which are vitally important
both far further intensive expanded reproduction and for satisfying
the material and cultural needa of the people. This concerns a more
intensive use of energy, raw materials, materials, and working time.
To increase production on the basie of existing resources with a simul- ~
taneous decrease in expendi~ures this is a demand which the party
is increaeingl.y placing at the ce:tter of party and political work and
of all atate and economic managerial work.
Unly this position makes it poasible to take account of the changing
conditions of the use of the energy and raw material resources which
are at the disposal of the economy of the GDR and to ensure the necessary
growth of production. More than 240 billion marks wsre appropriated
_ for these purposes during the five-year period (1976-1988), that is,
approximately 60 billion marks more than was spent for the modernization,
renecaal, and expansion of fixed capital during the last five-year plan.
A constant study ie made of the possibilities and the appropriate measures
are employed for a fuller use of our domestic raw materials. Economic
growth in the republic has to be achieved to a decisive extent on the
basis of the development of its own energy and raw material resources.
The strategic special-purpose position which has been mapped out for
the I980s provides in the long-term plan for covering 40 percent of our
needs for raw materials on the basis of domestic extraction. For such
important types of raw materials as petroleum, high quality natural gas,
iron, copper, hard coal, phosphates, cellulose, cotton, asbestos, and
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othera the development of the ecoriomy of the~GDB in the long term alea '
dependa~upon increaaing import4, aincQ there are sither no deposita in
the country, or they are nagli.~ible. There are depoaits of browa coal~
potaseium, tia, clay, and other ailicate raw materiala which ensure the
- satisfaction of our needa in the future. Their iase requires great econo-
mic efforts and expenditures as a.result of a worsening of the geological
conditions for extracting minerals. It ie necessary to develop increa-
singly deeper deposits and small depoaits ~ith a low ~oncentration of
useful subt~tancea, ~ieh xequirea specific capital investmeats. At
the same time, measures are beiag taken for a fuiler use of secondary
raw materials. The developYnent of ecience and technology, socialist .
competition,~ and of the iaitiative-of the workers is simed at an econo-
mical expenditure o.f existing materials and raw materials.. The economic
importance of this task is characterized, for eaample, by~~~he fact that
the needs of the cardboard induatry in the GDR for ~aw materials are
satisfied by approximately 43 percent on the basis of pul.p paper, the
need of the food industry for glass packaging by approaimately 60
percent on the basis of the multiple use of ~ars and bottlee, and the _
need for raw materials by ferrous metallurgy by 70 percent on the basis
of inetal scrap. ~
`ahat is involved, ahove all, is an inerease ia and the moat economical
use of existing resourcea and the discovery of new economic reserves.
Thus, the expenditure of important national econoanic energy carriers,
raw materials, and materials per 1,000 marks of industrial co~odity
output decreased in 1978 compared to 1970.by more than 21 percent, that
is, by an average of 2.9 percent a year. ~Tithout thi~ it~~would have
been neceasarq in.the industrq of.the GDR in 1978 alone to e.gpend an
additional 8 billioa marks of raw materials, which is equal to 7 days
of the country's industrial output.
An analysis of the condit3ons for further economi.~ growth shows, however,
that the accomplishment of presen~ and future task.a demande dimensions
of a completely different order. The average decrease.which has been
achieved of the specific expend~ture of economically inportant energy
carriers, raw materials, and materials of 2.8-3 percent a year is a very
palpable result. In the economic plan for 1979 the task was set of
achieving an even greater decrease apprdximately 4 percent. This
requires even greater efforts. The task has been set of carrying out
decisive structural transformations in the interest o� economizing
energy and materials.
From this point of view the forefront is now being occupied~by a etruggle~
. for scientific and technological progress with even greater purposeful-
ness, and the orientati.on of all of the branches of the economy toward
a maximum use of ita achievements. When the taska in the field of
science and technology are set in tlie economic plans of the GDR account
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cvw vcrt~.itit, u.~r. VPILT I
� I
i
will increasingly he taken of tt-ie fact that the acope of acientific and
technologic achievementa i~ growing at rapid rates. Scientific and ~
technological reaults are a deciaive source for increasing national
incom~ and for comp~neating for the growing expenditures which are
connected with the domeatic extraction of raw materiale and the payment
of importe. ~
The work of our party, state, and economic leaderce ie directed toward
a clarification of a aumber of fundamental iasues in this field.. Thie
concerns the introduction of new technological proceasea, and the produc-
tion of new and r~moval from production of obsolete products. This
concerns the purpoaefully directed realization of capital 3.nyestments
and of the necessar.y measures to increase the qualifications of our '
workers. Capital investments have to be used in a concentrated manner '
and at more rapid rates and they have to produce an econoraic effect~more
rapidly. This, in particular, applies also to the development and ,
production of microelectronics which is one of the most important fielde ~
of cooperation with the I7SSR. The production and use of microelectronics
is a key technology which makes it possible on a national economic scale
to utilize r.eserves for further economic growth. The specific feature
of this technology consiats in the fact that it finda a use ia abaolutely ;
all of the branches of Che economy.
The great importance of modern and perfected equipment for increasing '
tt~e might of socialiam in the ~lasa conflict with impe~ialism has t~ be
kepe in mind. This path makea it poasible to increase the strength of ~
socialiam and ~trengthen its superiority and it makes it possible to '
deprive imperialism of one more argument which it ie vainly attempting ~
to use against us. Lenin was convinced that eocialiem will be able ~
"with enormous rapidity to develop~the productive forces, to develop all
- of the possibiliti~e which make.up socialism, and to prove to everyone
and to a11 graphically and vieually that socialism eontains gigantic
forces and that humanity has now crossed over to a new atage of deve-
lopment which contains uncomm~oaly brilliant possibilitiea."*
The accomplishment of all of these tasks also demands to a definite
extent a new approach to the question of economic responsibility on all
levels, but espeeially and above all in the process of reproduction. In
order to create the best preconditions for thia combines have been
created in almost all of the industry of central subordination and in
the construction of the GDR. At the combines which include enterpriaes,
scientific reaearch institutions, enterprises for the production of ;
rationalization equipment, and sales agenciea a relative].y closed procese
*V. I. Lenin, "Complete Works," Vol. 45~ p. 402.
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~ P'OR OFFICIAI. DSE OriI:Y ~
of reproduction is organized which aerves the production o� defin3.te
final products of the economy. The combines which, as a ruie, contain
20 to 40 enterprise~.are aubordinated directly to ~e~braach ministries.
The combines have b.e~n given a great economic, and theiceby, political
responsihiYitq. They are reapoasible,.above all, fo~c the.dynamic growth
of their indicators, and tihis necessitates the attainment of ever~new -
scientific and technical aehievements and the most xapid.economic effect
from their realization. '~.'hie requires the introduction of modern tech-
nologiea and the rational:ization of production. TE~e task has been set
of achieving a higher economy of energy, raw noateriale, and.materials.
~
As the experienee wliieh.has been gained by the combines.of the GDR
shows, they open up possibilities for improving the qualit;� and efficiency
of labar. i~ith their delivery of raw materials, materials, and highly
productive equipment the combtaea mal~e a great eontribution to strengthe- ~
' ning the material and techtiical base of our economy. 'I'hey are developing
_ the production of consumer goods on a wider scale and~are attaining a
higher effect through egporCs. � .
The development of the combine~ whieh are subordinated directly to
ministries is taking place as a fulfillment of the decisions of the ~
Ninth Congress of the SF.D..~~ L~iith few esceptions, beginning with 1980 _
the managemert of all enterprises in ceatrallq subordinated industry
and in conatruction will be carried out on the basis of the combines~. -
Beginning with 1 January 1980 thie will affeet the work of 129 combinea.
- In this way, 91 percent of thoae emploqed (approximately 2,413,000 people) -
in centrally aubordinated industry and in construction will be working
at combines of central subordination compared to 36 percent in 1976
(957,000 people). Around 9Q percent of our sci.entific and~technical
potential (appraximately 113,400. people) is now concentrated at combines,
while in 1976 the figure was 44 percent (50,800 people). The share of
the combinea in industrial commodity production will increase to 88 per-
cent compared to 41 percent in 1976. In order to achieve better manage-
ment of the single reporduction proceas~ the combines have been given
more than 200 additional enterpriaes, basically sub-suppliers.
The creation and work of the combinea has suggested new conclusions in -
the field of improving planning and management. On the basie of posi-
tians of principle by E. Honecker, measures have been worked out to
improve the management and planning of the work of ministries and of the
- State Planning Commission which takes account of the organization of
' ~production on the.basis of the combines.
After the creation of the combines had been completed the task arose of
improving the quality of managerial work. On the basis of the state
planning asai~iments, the general directors of the combines have been _
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~
. ~
I
char~ed with working out their own~proposals as to the reaourcea with ;
which they intend to ensure the fulfillment ar~d overfulfillment of ~
these assignments. Every combine is faced with the taak of increasing , '
its economic contrib.ution to the country's economy. This concerns, ~
especially, a substanti~.1 shortening of the time involved in the ~
introduction of scienti�ic and technical results into the economy and ~ i
the concentrated realization of those capital investments which are ~
supposed to rapidly yield commodity output and the final product. In !
addition~ the development and production of export products which
provide a high currenay profitability, and also of a greater number of
higher quality consumer gc~ods fo.r the population is moving to the
forefront.
In solving these and other problems connected with the development and
strengthening of socialist production relatione, we are always guided by ~
the fundamental teaching of V. I. Lenin. Thus, the socialist planned
economy ~f the GDR ie being perfected on the basis of the general.
principles of socialist construction for the good o� man and in the ~
name of strengthening socialiam. ~
COFYRIGH'r: Izdatel'stvo FRAVDA, VOPROSY EKONOMIKI, 1980
T~chnological Progress ~
Moscow VOPROSY EKONOMIKI in Ruseian No 1~1980 pp 118-127
- ~
(Article by G. Gertsovich and L. Drobysheva: "The Management of j
Technological Progress in the European CEMA Countries"] ,
[Text] Overall eystems of planning and stimulating scientific and
technological progress and a rise in labor productivity are now being
formed in ':he countries of the socialist commonwealth. These syeteme
are based on the experience which has been gained in managing technolo-
gical progresa, on extenaive experiments, and on reciprocal etudiea of
experience. Taking account o� the concrete conditions of the countries, .
they embrace all of the aspects of technologieal progress.l
In connection with the increased dimensions of production and the greater
complexity of economic and social problems, the communi~t and workers'
parties have set the top-priority task of ehifting to intensive methods ~
of conducting the economy, and a most important goal has been moved to
the forefront to achieve an improvement in production efficiency and
in the quality of work. An increase in the role of long-term plans, '
the use of stable long-term normatives, and a comprehensive strengthening -
of the cost accounting mechanism are becoming eapecially important here.
I
As was emphasized at the 25th CPSU Congress, only on the basis of an
accelerated development of science and technology can the final task of
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of the social revolu~ion be eccomplished a conatructed communiet
eociety." ' '
The decree~of the CC CPSU and USSR Council of Minicter~ "Oa Improving
Planning and Strengthening. the Influence of the EcoaomiE Mechanism on ~
Increasing Production Efficiency and Improving the ~uality of Work" has
been called upon to play a great role in the accompliehmsut of this
task. It provides for a system of very important measures to accelerate ~
the realization of scieatific and technical discove~iea and developments ~
and to increase on thi~~basis the growth ratea of labor productivity, and
to achieve high final economic reaulta. The decree�maps out measures
for a gradual traasition.'~to a eyatem.of phyeical and cost indicators
which ensure the interest of enterprise collectives in improving the
- technical.and economic indicators of production. The use of the net
(normed) output indicator in planning and evaluating the work of an
enterprise, and also an improvement of the procedure of forming the
wage fuad are creating economic stimuli for improvirtg ~he entire organi-
zation of production, including on�the basie of the introduction of new
- equipment and technologies. ~ .
The transfer of acientific research, designing, deaign planning and
production deeigning organizations~. experimental.enterprises, acientific-
production and production associatioae (enterprises) to a coat accounting
system of organizing their work to create, maeter, and introduce new
equipment on the basie of achedule orders and the application to these
scientific-production and production elements of the ~yatem of bonusea
and incentive prices for new highly effective output is a logical
development of the cost accounting methods of planning and management.
At the present time the chief tssk. of the CEMA countries is a maximum
disclosure of the possibilities contained in socialist production rela-
tions. The developmenC of the material.and technical base~has to be
ensured to such an extent as corresponds with the modern productive
forces and the demands ot the acientific and technological revolution.
The economiste of the CIIKA countries (above a11 the GDR, Bulgaria, and
Poland) note that in these countries conditions have been significantly
improved for an acceleration of~acientific and technological progreas
and for increasing its economic and social effectiveness. This has been
achieved thanks to the developaent of powerful combiaes. The dynamism
of the work of the combines has expanded, and at the same time possibili-
ties have been created for the central economic agencies for an even
greater concentration of their Offorts on the solution of strategic
tasks on an econotm~-wide scale.
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. ~
In keeping with the demande which are being raiaed by the coastruction I
- of a developed sociali~t e.mciety and the conditione of eeonomic deve-
lopment~ the CEMA countries have.decisively taken t1~e path of increasing f
production effici.ency. "It ie now eeoential~" writes E. Honecker, "to i
increase the rates of inteneification and to obtain resusts of economic ~
importance more rapidly. The posaibilities for growth $re being defined ~
by factors of a qual.itat~ive na~ure. An increaee in ngtio~al income ;
precisely on the baeis of~ an inEreased economy of materials and a fuller,
uae of working time and equipment such is~the dir~ction~of our !
economic policy."Z ~
~
Let us cite one snore example. In Poland preparations are.developiag for ' ~
the Sth Congreas of the Poli~sh Workers' Party'whose CC ha~ published its ' ~
theais "For the Further Development of Socialiet Poland and for the ' ~
Wellbeing of the Poli~h People," Speaking at a.discuasion of theses,
E. Gierek emphasized the ~ecesaity for making certain.changes in the
operation of the Polish e~conomy: "We shall take the path'of 'improving , ~
the planning and management of product~o~, of~increasing labor discipline,
of a wide introduction of eosti accounting and a decrease:ia the cost of �
output, the path of improving the entire economic mechanism and of . '
increasing production efficiency and improving the quality of work." ~
In a numt:er of CEMA countries the Central Committee of the communiat ~
and workers' parties'and the Councils of Ministers, with the participa- ~
. tion of ministrie~ and departments and scientiats and practical~workers,
are conducting a large amount.of work to prepare proposal~ on improving
- the economic mechanism in induatry and capital conatructio~. The easeace
of these propos$ls consistg in a maximum orientatYon of the plan and of .
~ all inanagement toward the accomplishment of the chief tasks of~economic
development, the achievement of high final results, an accelera~ion of I
scientific and technological progress, and an improvement of production ~
efficiency and output qual.ity. The chief tool here in realizing the
economic policies of the communiet and workers' parties of these countries i
is the national economic plan. This involvea putting optimal.decisions ~
in the plan which ensure a dynamic and proporfiional development of a11 ~
of the branches of the economy in accordance with the course aimed at ~
an accelerated shift to the intensive factors of economic growth:
The CEMA countries proceed from the idea that scientific~and technical
~ asaignments have to be woxked out and controlled ae carefully as the ~
other component parts of the national eco~omic plan. From thia follows ;
a strengthening of the directive nature of the plan for scientific and ,
technical development and an increased role for long-term scientific
research plans. In addition, the plan for ecience and techaology becomes
a very important component part of the national economic plan and
increasingly permeates all of its sections. In recent years there has
_ i
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~ alao been~an increase in the importance of forecaetiag which helpa to
~ accompliah ~he tasks of technologicel~ progrese and to carry out the
scientific and technologic�al revolutioa. A great deal of attention is
being devotted to planning applied researeh, to s.�ienti~ic.and technica3.
development work, and to mastering and introduciag into production new ~
output. '
The following system of interconnected scientific and technical plana
is now taking shape in t~ie countriea of the commonwealth: long-term
(for 15-20 yeara), med3um=term (basicalLy five years) and short-term.
The assignments from the long-term plans go into the five-year plans,
and from them into the eht~r.t-term plans. ~The long-term and �ive-year
plans are compoeed~and controlled primarily on a state level, while the
short-term plans are controlled in the cost accounting aphere. Along
with atate plans for'scientific aad technical development, branch plans
for research�and experimental.~ork aad also enterprise plans are made
up.
In recent years state teehnical policy programe have been included in
the state national economic plans of most of the sociali~t countries.
The branch plans for the development of science and technology in
industry contain primarily assi.gnments.which cover research and experi- '
mentation for such products as create the basis of the future development
- of the branches, and alao for producte connected with production speciali-
zation and cooperation. The se;~.enti.ric research and experimentation
plans of enterprises include above all assignments which ensure rational
solutiona of production programs that promote a riae in the technical
organizational and techs~ical levels of production.
For example, in Bulgaria the plan for scientific and technical progress
consists of four sections: scientific research and design planning work
on the creation of new equipment and technological methods and on the
_ organization of production; thP c~eve].onmanr'and testing of experimental
machinery models and their preparation for series production; bas~ic
measures to introduce into production mechanization and automation equip-
ment, new materials, and so forth; and the financing of scientific
institutions. In Poland, as in a number of other CEMA countries, all
_ scientific work is divided into three large groups: basie theoretical
research, applied work and research for the accomplishment of branch
tasks, and work on the introduction of already known technical and
design research projecte.
The basic directions of planning and of the organization of management in
the Polish People's Republic are determined by party documents. The
most important purposes in improving the planning and mana~ement of the
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socialist economy are: an increase in the long-term aocio-economic
effectivenesa of the development of the ecqnoary and of a11 economic
organizationa, and also a atren~thening of the strategic role of centra-
lized planning; the development of eocial factors which speed up progresa,
especially a maximum development of the creative initiative and inventive-
ness o~ the workers; the creation of conditiona for tkte ma~s dissemination
and use of technical and technical economic innovations; and a wide use
of foreign trade and a deepening of socialiet economic integration in
order to increase the effectiveness of economic per.formance in the
country and to accelerate scientific and teehnological progress.
The state scientific research and technical development programa include
concrete assignments which are put in them by the ministries or by
leading central agencies. They represent proposals to the ministry of .
science, higher edu~ation, and technology which works out a stm~ary ~
~ program and sends it for approval to the Council of.Ministers of Poland
and the Planning Commission at the Council of M3nisters for inclusion
in the five-year and annual plans of individual departments or of the
Polish Academy of 3.ciences. ~
Departmental-branch problems needing research are placed by the individual
ministries and central agenciea in the annual.draft plans~w3zich are
presented to the Planning Commission.at the Council of Ministers of Poland.
The Planning Commission examines these problems and draws up a summary
plan which i~ approved by the Council of Ministers. In 1975 more than
450 assignments for the introduction of new equipment were carried out
within the framework of the State Scientific Reaearch and Technical
Development Programs, and 490 of them within the Programs for Key Problema.
The economic effectiveneas of the introduction of new equipment in the
basic economic departments in 1976 was estimated at 22.6 billion zlotys.3
Characteristic for a number of CEMA countries is a narrowing of the range
of technological progress assignznents which are planned centrally, and
their differentiation in relation to on which level they are best able
to be accomplished in the most overall manner. In Hungary, for example,
the development of the long-term plan for the years 1971-1985 has been
completed. Whereas in previous years 70 to 80 percent of the acientitic -
research performed in the country was reflected in the state scientific
research p1an, today the figure is only one-third to one-quarter.
The five-year plans are the basic form of planning acientific and techno-
logical progress. 3'he annual plans are made up on thGir bas3s. The
following are among the indicators which are used in the CEMA countries
in planning scientific and technological progress: the amount of work
carried out for the scientific and technological progress plan (in
physical and in value terms); a list of ~obs and a products Iiat of newly
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mastered products and equipment; the acientific and technical parametera
of ob~ecto; time perioda for the development. ~naetery, and introduction
of concrete maaaurer; aAd the cort of work ao a whol� ard for individual
elaments (with a specification of financiseg eources). In certain CEMA �
countriee the amount of economic effectivenese ia planned~a~ a calculation
indicator. ~
The most import&nt directions in improving the planaing of acientific
and technological progress aYe: a determination of the'proportions
between basic and appli~d.research and produc~ion;. correspondeace to
the basic directions of the development of ecience:and technology; an
increase in scientific and technical potent3al; the eatablishment of a
close interco~?nection b~tween researeh~and production woxk; and a deep-
ening of acientific and technological cooperation within the framework of
socialist economic integration.
In a number of CEMA countriee the development of lang-term scientific
and technical development plans.inelude:. the seledtion of the most promi-
sing branches and directions ia which it is proposed to concentrate the
maximum reaources of scientif~.c research and experimental desigaing '
organizations; a determination of the branches and directioa of acience
and technology in which a~country's awn research~is performed, and also
of the countries in which it is propoeed to purcha~e licenses and patents
or to obtain technical docuanents; and the selection and inclusion in
the plan of the topics ~nd problems whose solution ha~ 'to ensure the
fulfillaaent of the istdividual eections of the long-~terna plan for the
development of a country''s economy, especially in the field of capital
investments, and of the topics which. are chosen in accordance with a .
' conception of the long-term development.of science and~technology. The
organizations which are responsible for the solution of the problems of
the long-term plan are determined; a calculation is made of the number
of scientific cadres necessary for the solution of the problems which
have been~set and of"the dynamics of the growth of the number of scien- -
tific workers (a change ir~ cadre structure and the planniag of the _
creation of new scientific research and experimental designing organi-
zations); a calculation is made of the expenditures needed to carry out
the scheduled work (including currency for the purchase of licensea and
patents); and a determination is made of baeic di~ections and principles
and the scope of the participation of countries in the international
- division of labor in the field of science and technology with.the social-
ist and capitalist countries: ~
The experience of the GDR, Poland, Czechoslovakia, Hungary, and other �
socialiat countries has shown that the state plan for the.development of
science and technology has included in it basically the moat important
assignments which are auspicious for.the development of the economy and
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which require an extenaive base fo~.their accompYishment. As a rule, they
are connected with the international eociali~t division of lahor and
with socialist economic integration. ~ ~
In the Czechoslnv~akian Socialiat Republic~technical and economic~con-
ceptions and a long-term forecast of economic and social growth for a
period of 15 to 20 years comprise ~the basis for worki~g out the long-
term national economic p1an. 3'he largest te~hnical.development programs ~
which are worked out along with the plan within the Ministry for Technical
DevelopmenC and Capital Construction embrace: the.~development and use
of electronic~, electrical engineering, and app].ied cybernetics; Che ~
creation and use of new mgteriale; the development of the country's
energy enterprise; the provisio~ for the populatiori of foodstuffs; the :
creation of a modern material base and the iMdustrialization of construc-
tion; an increase in ~he reliability }.evel of machin~ tools and equip- .
ment and the development of machine building produetion procesaes; the .
renewal and modernizatian of individual.machine b~ildiag ~roducts; and
environmental protection aad the creation of the most f~vorable conditio~ts
for the harmonious�development'of health and people.~
In order to improve the management of scientific and teehnological progress
at the end of 1976 leading working groups were createfl:within the above-
mentioned ministry. One hundred an~ sixty uuch groups`became centers
for the preparation of overall aiaterials.on the developmental prospecta
of the most important branches and productions of international coopera-
tion in the field of scientific and technological progress. They carry
out systematic control over the rationalization of production and of
the production atructure. Theae groupa maintain close contacts with
interea'ted ministries and departmenta and associations'and large enter-
prises, which promotes a better coordination of their efforte. Ia order
to stimulate the introduction into producti~n of the achievements of
_ scientific and technological progress the procedure for'evalua.ting tech-
nically improved and high quality products and also the procedure for
awarding bonuses has been changed for the present five-year plan.
In the GDR where great importance is attributed to~the long-term planning
of scien~ific and technical development the following are made up: a
plan of ba~ic reaearch tasks in .the field of the natural ecieaces (reaearch
plans); a program for the development of the most important branchea and
spheres of production; scientific.and technical plans for groups of
products and basic productions; a state scientific and technology plan;
and an introduction plan. Mareover, the plan for the introduction of
scientific and technical achievements into production ie an organic part
of the overall national economic plan. It includes assignments for
scientific research work, the introduction of advaneed technology and
equipment into production, the mastery of new typea of industrial output,
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the financing of scientif3c research work, and the training of ecien-
tific cadres. The classificatioa of aesignmeats by�the.dagree of their
na~tional econvmic iaaportance plays�a large role in tMQ compoeition of
- the scientific a~d technica~l research plan. This ie determined by the
goals of the research. ~
The state agencies of the GDR which dfrect the devQlopment�of science
and technology (Bbove all Z'he Ministry of;Science and"Teehaology) perform
such strategic functions as the long~term forecaa.ting and planning of .
scientific research.. They ~onc~entrate monetary and material resources
on the development of.the mo~t'importaat braa~hes of~sci~nce and
. technology~ coordinate the work of the organizations and departments
which are engaged in sci.ent~ific~work (~academic fins~itu~es and labora-
tories, departmental scientific.research organizatious, aad vuzes), and
carry out scieatific and technical cooperation and:s~i'eatific relatioas
with foreign countries. The ef~fectiveness of.~the measures of the
scientific and technical resear�h plaa is determined in the GDR above
all by the amount of the economy in the sphere of production which is
achieved from their realizatioa. Use is made here of the indicators of
a rise in labor p~oductiv3ty, an increase in the amount of production,
and a decrease in the cost of output with a simultaneou~.improvement of
its quality.
In Hungary at the center of attention of the directing.agencies is the
directions of technological progreas which help to.more rapidly improve
the structure of production~ia accordance with domestic and foreign
conditions. Above all, special-pu~pose programs for.the~developmeat of
the country's economy are used. Dur~.ng the current five=year period
?1 general atate development programe have~been singled out, including
in the aluminum, pharmaceutical, and petrochemical industries~ in
computer equipment, and in the production of ineat. The law on the fifth ~
five-year plan of Hungarq defiaes in detail the basic directiona of
technological.progress which consist in the production of output whose _
reliability, quality, and streagth correaponds to current requirements; -
the production of materials which posaeas the higheat conaumption value;
the disaemination of production methods which ensure an economical use
of energy, raw materials, and also production waste; the achievement of
mechanization~which help to release or economize labor power, especially
the mechanization of intra-plant transportation, and the dissemination
of the practice of capital construction which does not demand aubstantial
construction operations.
The basic directions in improving the organizational structure of the
management of scientific and technological progress in the CEMA European
countriee are: a strengthening of the branch management of all work in
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rva~ vrr t~.teW U,1'. UIVLI
the field of creating and iutroducing new equipment~ia order to carry
out a single technical policy; and the creation of production aad
scientific-production associaCiona~�in which the full.~cycle of work is
performed to create and master new equipment, including its launching
in series and mase production. In addition, speeia~liza'tion is effected ~
for the en~erprises, institutes, and designing and tec.~nological organi-.
zations which are included ia the associationa. As a rule, the
scientific-produetion association consists of a scientific research
institute which ie at the head of the association, a deaigning buresu
for products and technological equipment, and alao e~cperimental enter-
prises and plans which produce series output.
Along with the asaociationa, overall scientific institutiona are organized
in the CIIKA countries which are capable of raptdly carrying out scien-
tific research and experimental designing work for ma~or problems. In
Poland, for example, overall reaearch centere are created which consist
of insititutes, designing and plann3ng bureaus, and experimental plans.
The shift by scientific research and planniag and design organizations
which are within the associations to cost accouating and the use of
contract prices for scientific and technieal output helps to accelerate
the introduction of scientific and technical achievemente into produc-
tion.
The importance and necessity of improving the economic mechanism for
accelerating the realization of scientific and technieal achievements
is emphasized in the decie~ions of all of the co~uniat and workera'
parties of the CEMA countriea. Thus, it was noted at the 8th Congresa
of the SED: "Quite a few out~tanding research and design achievementa
- lose their value to society to a large extent because they are introduced
into production too lat~ or on an insufficiently wide scale. The
acceleration of thi~ proceas depende especially upon how solidly we
sucr_eed in tqing the scientific and technical work of reaearch centers
to production, above all at combines and at enterprises where its
content, organizational forms, and economic determinante are already
determined in the plan."4
Experience shows that in the CEMA countries the aolution of a ntmaber of ~
scientific reaearch problems is frequently not concluded by introduction
into practfce. There are varioua reasons here. According to the data
of GDR economists, an analysis of the diffiEUlties which arise in realizing
scientific research has ehown that around half of these difficulties are
connected with shortcomings in the selection of reaearch directiona,
miscalculations in the x~search process itself, and diffieulties connected
with transmitting its results into production.
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In order to improve the aituation connected with the~introduction of
scientifi,c and technical achievementa iato production on 1 Auguat _
1973 in the People's Ytepublic.of Bulgaria a decree of.the CC of the
Bulgarian Com~nunist Party and of the~ Council of Ministera t~aa adopted ~
-"Oa Acceleratiag the Introduetioa of Scientific and:~echnical
Achievements Into Production"5 and then decreea of ~he Council of
Miniatera and other normative documents were adopted wtiich pro9ided ~
measures for th~ creation (in re2ation to department'aad character of
work) of introduction or~aniza~iona in the follo~xing forma.: ce*~ters
for introducti,on and for.scieatific research work and developanent;
a scientific-production organiza'tion; a scientific center, a departmen-
tal scientific research.inet-ttute, and an inatitute at'an economic
organization for applied reaearch, plannfng and designing, des.igning,
and technological w~rk aad intYOduction; and bases for development and
_ introduction and an experimental atation. ~ ~
The new organizatione have heen given the following functions: the
development of scientific and technical.eeonomic forecasts, conceptions,
programs, and propo~8ls for tha development of complexes aad branches
of production; unification and th~ development of standards; enauring
~ the patent purity of products and asaistance in developing inventor and
rationalizer ~ork; the introduction of seien~ific and technical achieve-
ments into production by means of the use of national and foreign plans,
decisione, licenses, documents, and "know-how";.~he development of
experimental models, ineluding the technical and techaological documen-
tation for their introduction into series produc~ion; and a generaliza-
tion of the experience in production work and the development and
introduction of ineasures to improve quality, raiae the technical level
of output, and decrease the.expenditure of raw materiais and materials.
In recent years improvements have been made in the ayatem of financing
~ in stimulating scientific and techno~ogical pro~reea in th~ European'
CIIKA countries. A large atock of highly effective scientific aad planning
and deaign and development projects has been created. For this reason,
as has alreadX heen nated, great importance is being taken on by the
correct estab~lishment of~proportions between basic and app~ied research
and between expenditurea for research and development, on the one hand,
and the amount of capital investmenta on the other, and also of propor-
tions between expenditures for research and for the realization of its
results. As for f~nancing one or another topic or scientific and tech-
nical assignment, its amounts are determi~ed in relation to the level
of their national eaonomic importance.
Expenditures for the development of science and technology are now growing
at more rapid ra~tes than national income. Thus, in 1976'~I980 in the GDR
expenditures for science will increase by 40 percent and will amount, as
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was noted at the 9th Congress of the SED, to 4.2 percent of national _
income. In Poland appropriations~ for the dsvelopn?ent of acience will
increase from 115 million zlotya in 1971-1975 to 200'billion during
the current five-year plan. Expenditurea for ecience in 1980 will
come to 3 percent of national income. In Hungary the anerage annual
rate of increase in expenditurea for ~cience came to ~Y~.7 percent, which
subatantially exceeds the g~owth rates af national income. In
Bulgaria these expenditurea came to 2.16 percQnt of nat3onal income
during the current five-year period, in Hungary 3 percent, in Poland
- 2.5, in Romania 1.26, in the USSR 4.7, and in,;Czechoslovakia
3.9 percent.
The countries of the socialist co~onwealth are characteriaed by a
system of planning and financing which includea, as a rule, three stages:
national economic plans and programs urhich a~e finaneed from the state �
budget; branclt technological progress plans.which are financed from .
branch and ministry development funds; and plans for the reequipping of
enterprises and associations which are financed from enterpriae and
aesociation funds. ~
However, in each individual country this scheme is realized with regard
to its specific nature and with diverse proportions of participation ,
by the state budget and brar~ch.financing, and special eharacteriatics
in the formation of the technological progress funds and in their use.
The experience which~has been gained by the eocialist countriea demona-
trates to a sufficient degree that it is not possib~le to absolutize any ~
one of the forma of fir~ancing in the development of e~ieace and techno-
logy. Neither excessively centralized financiag from sourcea unconnected
with the results of economic work of enterprises, nor "freedom" in finan-
cing this work which is eonnected with the creation of financing aourcea �
in essence without the capital investments plan hag ~ustified itself.
At the present time the financing and crediting of scientific research and
development work in the CEMA countries is characterized by a greater
special-purpose programmed and overall character than in the past. Over-
all and other programs fmr the introduction into production of acientific
and technical achievementa and basic scientific research are the obJecta
of financing. This ensures direction and continuity in the financing
of t:he single "science-production" process.
The overall programs for scientific and technical research embrace a11 of
the expenditurea connected with the carry~.ng out the entire "scieace-
~ production" cycle, regardless of their character, tim~, and place. These
expenditurea include outlays for scientific research, for the purcha8e of
machinery and models, for the development and acquisition of experimental,
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laboratory, and semi-industrial equipment, and for the creaCion of
prototypes; and outlays for the'_study and purchase o� patenta, licenaee,
"know-hoi,x," and docuan~ata. for Qspital investmenta conneeted~ ~ith. the ' -
introduction of the reaults of domestic and foreiga denelopment ~ork. ~
The apecial-purpoae character of finaacing the introduetion of acientific
and technical achievements is ensured by.the delimitatioa.Qf the sources
for financing the administrative and managertal eapendi~ures of the
organizations ~hich carry out the introduction of the scientific and
technical achievements and of the overall programs. The adminigtrative
and managerial expenditurea are include~l in the overall costa of
managing a complex, miniatry, or organization. This is a fuadamentally ~
new aspect.
In the GDR funds are iasued from the state budget for scienti~~c and
technical measurea exclueively oa the'basis of a science and technology
plan for financing selected conplexes and important n~tional economic
assignments.. The decision on the allocation of appropriations for
concrete scientific and technical assignments is made by the Council of
- Ministers at the suggestion of the Ministry of Science and Technology
within the framework of approved atate planning indicators. Basic
research is financed chiefly f~om the state budget.and, moreaver, the -
appropriations are assigned to concrete assig~ents. ~
In recent years in the People's Republic of Bulgaria the proportion of
b udgetary monies in the total amouat of eapend3~tures for the financing
of acieatific and technological progress has been approximately 50 percent.
Of the total amount of budgetary resources one pa~t is eapended for the
maintenance of ~indget scieatific organizations, and the other is alloca-
ted to miniatries, academiee, and departments for measures connected
with scientific and techaological development. -
During the last five-qear plan in the Hungarian People's Republic around
30 percent of the expenditures for acientific�research and development
was financed from the budget. During the years 1976-1980 this proportion
will be preserved.
The internal accumulations of enterprises and assoeiations on the basis
of which technical development �unds are created are begianiag to play
an ever larger role in financing technological progresa in the European
CEMA countries. As a rule, th~se funds are formed by means of making
additions to the coat of output. In addition, they are supplemented by
income from the sale of patents anc~ licenses and the sale of the output
of experimental series and properties wh3ch have been created and pur-
chased on the basis of the munies of thie fund, by allotmen~s from
above-plan profits,~and others.. The amount of the addYtiona to cost is
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differentiated b.y branches in accordance with their importance for
accelerating technological progress.in the entire economy and the
expenditure levels for technical deve~opment in a given branch.
In the People's Republic of Bulgaria, the Polish People's Republic and
the Czechoslovakian Socialist Repuhlic there are a large numhe~ of
funds and a wide range of inea~urea~are carried out which are financed
through them, which leada not oniy to an increase in f~nancial resources
for the needs of technological progress, but.also to a gcattering of
resources, and hence~ to shortages of them. Although a strict special-
purpose direction for the techriical development fund ih becoming
increasingly characteristic of the~ CEMA countries, the moniea froffi
these funds are not always ueed preeiaely fc~r thei~r purpose (.for example,
- as an additional source for financing capital iavestmenCs) and with ~
maximum effectiveness. Th~y are not made full uae of during the courae
- of the year.
_ In analyzing the development of the overall systems of planning and
atimulating scientific and technological progress, the Polish economists
S. Spotan and Yu. Novak come to the conclusion that it is ~essent3al to
solve the following problems:
1) a fur~her improvement of the overall planning of.scientific and
technological progress, that is, from the development of a program for
scientific research work to the introduction of new equipment;
2) an improvement of~ the financial and economic syetem, including the
system of the material stimulation of the scientific and technological
~rogress by meane of coordinating the work of scientific resesrch organi-
zations with the develapment of individual branches;
3) the shifting of acientific research organizatione to cost accounting
at the branch level;
4) an improvement of the system of the material stimulation of develop-
ment work which provides the economy with a substantial economic effect,
particularly on the basis of contracts between the organizations which
perform the scientific reaearch work and enterpxises (asaociations);
5) the faehioning of a system of information and inventorying the
achievements of scientific and technological progress and its effective-
ness.6 Emphasis here is upon the necessity of using the mutual expei:ience
of improving the methods of economic management which exists in the
countries of the socialist co~onwealth.
There is now in operation in Poland a single country-wide system for
financing and atimulating scientific and technological~progress which
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was introduced during the last~five year plan; furthe= experiments in'
this field'are nat~planned. Howeber, every year the~Minietrq of Science, ,
Higher Education, and Engineering,.and also the Planniag Commnission at
the Council of Ministers of the'Poiish People's Republic 8nd individual
sninistriea analyze the resulta~~which have been achieved in the field of
scientific and techaological progresa. and also negative tendencies
which arise at individual produetioa sectors. A care~ul check is made .
on the fulfillment of the anaual planning assignments i~u'the~ field of
basic and applied research, th~~.introduction of ne~ equipment,.and the
effectiveness ~hic~i is achieve8.: The e.xperience aad conclusions of the
analqsis are taken into account in wo=king out tlie plaas for future years.
Experiments are carried out onLq in the field of in8roduction of technical
organizational progress in ordei to provide assiatance�.wifih its introduc-
tion by means of creating speciglized enterprises.
An overall system of st3mulating scientific and techaological progress. -
_ and labor productivity is only ~ust beiag formed in the CEMA countries.
Certain di~ferences ariae here among the countries.. In some of them '
there are subsystema for stimulating scientific aad technological progress,
while in others there axe no such systems.
Thus, in Hungary the stimulation of scientific and technological progress
is provided for by the entire sqstem of economic management. Special
methods of stimulating scientific and technologieal pr~gress are not
being used at the present t3me. As Hungarian economists note, the
collective material interests of the workers of production enterprises
is maintained by the full aggregate of the levers of direct and indirect
regulation which are directed above a11 toward increasing economic
efficiency as measured bq profits. Material incentives are effected with
the assistance of the entire sqatem of centralized management and
economic regulation. This takea place as follows: technical development
funds are created on the basis of allotment of a specific percentage of
the cost of the output praduced by a given branch or sub-branch.
'I'he Chairman of the State.Committee for Technical Development at the
Council of Ministers of the fluagarian People's Republic Academician
L. Pal has noted that ~n the electronics industry these allotments come
- to 5 percent of the branch'~s production, in pharmacology 6, in the
food industry 3, and in the construction materials industry 2 percent.
~ao-thirda of these~monfes are put at the disposai of enterprises and
are expended for ~incentives for~specialists and workers and for the
purchase of modern equipment and advanced technology. Une-third is
diatributed among the ministries and the comm3ttee.~ The uneven percen-
tage of the allotments is explained by the importance of a given branch ~
in exports, its ability to compete on the world market, and its place -
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. ~
. i
in the international ~ocia~ist~division of labor and ia the~realization ;
of the demands of the Overall Program for Socisliat~Economic Integration. ;
One of the moat important characteristicsof the contemporary development ~
of the economies of the CEMA countries consiatsiri the fact that it is I
taking place in the syatem of the socialist commorn~zea~th and that it ~
takes account of the requirements of the international ao~ialist division
of labor and of socialist economic integration. This applies, above all
to the sphere of science and technology. The coordinated uae of the ~
acientific and technical potential of the CEMA coun~ries ~nd the coordina- ;
tion of their long-term technical policies, of t~e basic directione and '
ways of developing acientif ic ~nd technological progres~, of the aaaounts
and first-priority objects of fin~ncing, and also of the use of the
reaults which are obtained, that is, the working out of a single strategy
- for planning science arid technology, will provide the countries of the
socialist commonwealth with an enormous political and economic effect.
In accordance with the Overall Program for a Further Deepening and
Improvement of Cooperation and for the Development of the Socialist
Economic Integration of tize CEMA Member Countries, a forecast of the '
development of science an~ technology for ten to f~.tteen years is being ,
worked out for the first t~me in the practice of their cooperation.
This kind of coordinated scientific and tec:~nical policy for two to
three five-year plans will make it possible to optimize the rates and
proportions of the development of science and technology in~tha CEMA
countriea and to def3.ne the m~ost effective ways of using material, ~
financial, and labor resources in accomplishing the difficult social ~
and economic tasks of socialist and commu~,ist conetruction.
F00'i'NOTES
1. "An Overall System for:Stim~lating Scfentific~and ~8chnological Progre8's
- and an Increase in Labor Productivity in the CEMA Member Countriee."
Collection of articles. Director of the work Profressor B.
Sukharevskiy. Scientif ic Research Institute of Labor of the U5SR
Council of Ministers' State Committee for Labor and Social Questiona,
1978, pp 12-19 (henceforth "Overall System....").
2. KO1~IIrii1NIST, No. 13, 1979, p. 92. ,
3~ "Overall System...," p. 182.
4. "Eigth Congrese of the Socialist Unity Party of Germany," Politizdat,
1972, p. 43.
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S. D'RZHAVEN VESTNIK, No. 73, 1973
6. "Overall System...," pp. 204=Z05~.
7. PRAVDA, 24 October, 1978.
BIBLIOGRAPHY
l. "Materials of the 25th Congress of the CPSU.," Politizdat, 1976.
2. "On a Further Improvement of the Economic Mechanism and on the
Tasks of Paxty and Government Agencies," 12 Ju1y 1979 Decree of
the CC CPSU; "On Improving Planning and Strengthening the Influence
of the Economic Mechanism on Increasing Production Efficfency and
Improvi~g the Quali~y of Work," 12 July 1919 Decree of the CC CPSU
and USSR Council of Ministers, Politizdat, 1979. ~
3. "Eleventh Congress of the Bulgarian Communist Party," Politizdat
1977. . .
4. "Ninth Congress of the Socialist Unity Party o� Ge.rmanp," Politizdat,
1977.
5. "Seventh Congress of the Polish United Workers' Party~;" Politizdat,
1~76.
6. "Fif teenth Congress of the Communist Party of Czechoslovakia,"
. Politizdat, 1977.
7. "Overall Development Programe in the CEMA Countries," Izdatel'stvo
"Mysl'," 1977. . .
8. "The Organization of an Improvement of Production Management,"
Izdatel'stvo "Ekonomika," 1977.
9. "The Scientific and Technical Policy of the So~ialist Countries,"
Izdatel'stvo "Nauka," 1977.
10, "~.n Overall System for Stimulating Scientific and Technological -
Progress and Increasing Labor Productivity in the CEMA Memher Countries."
Collection of articles. Director of the raork Professor B. Sukharevskiy.
Scientific Re~earch. Institute of Labor of the State Conanittee for
Labor and Social Questions of the USSR Council of Ministers, 1978.
COPYRIGHT: Izdatel'stvo, PRAVDA, VOPROSY EKONOMIKI, 1980
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;
i
CEMA Integration in Transportation !
Moscow VOPROSY EKONOMIKI in Ruseian No 3, 1980 pp 82-92
!
[Article by B. Gorizontov: "Integration of the CEMA Countries in the !
Field of Transportation"]
jText] With the developing and deepening of the proces,aea of socialist
economic integration there is an important increase~in the role of i
transportation. V. I. Lenin defined the external functioa of transpor-
tation as being the material implement of relations with foregin . ~
countries.l Under presentday conditions the transportation of the . '
CEMA countries has turned into a material implement of socialist.'economic
integration. ~
While it provides for the continuous work of the other branchea of the
economy and for the nornial course of all of social reproduction,
transportation continues the production process in the international ~
sphere. It has an active influence on the economic effir,iency of the i
international socialist division of labor. At the same time industry ;
and, especially, machine b~ilding create within the framework of inter-
national praduction specialization and cooperation the necessary conditions '
for reequ9.pping transportation on a new scientific.and technical.basis, ~
which promotes its development and leads to a decrease in the expenditures . ;
for moving goods in international comou?unications.
During the 30 years of the work of the Council for Mutual Eeonomic i
_ Assistance, the fraternal countries have achi~ved large succesaes in
cooperation in the field of transportation in improving the forms and
methods of ~oint planning work, in coordinating international ahipment and ;
transportation equipment plans, and in making up forecaets of the develop-
_ ment of transportation over the long term. Substantial work has been -
performed on reequipping many transportation lines o� international signi-
ficance, the ~oint construction of ma,jor transportation facilities is
developing, international tranaportation organizations have been cre~ted
and are auccessfully operating, and so forth. However, life is bringing ~
up new problems whose solution is connected with a further development
and improvement of transportation integration. . . ~
The current economic relations of the CEMA countries repreeent a developed
~ syatem without which the normal functioning of the individual national
economies is now impossihle and which is accompanied by high growth rates
fox mutual commodity turnover.` Under t:~ese conditions transportation ia
being faced by greatly increas.ed demands of both a quantitative and a
qualitative character. Today our basic attention ia tieing given to
mastering the latest achievements of science and technology. The countries
- of the soc~alist comm~nwea].th have set themaelvea the task during the
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forthcoming two five-year plana of intensively developing interaational
production specialization.and cooperation and of making efficient use of
its advantage~. This ie also msking new and increased demands upon
- transportation which are connected with the necesaity of en$uring rhythmic
work and the eafekeeping of specialized output which is being transported
and of shortening delivery time. ~
In order to succesefully accompliah this qualitatively~new task it ia
necessary to subatantially recoastruct tranaportation roads and to
make use through ~oint efforts of new transportation equipment and .
technologies. It is completely natural from this point of view that
a long-term apecial-pnrpose program of cooperation (LSPC) on the~
, development of traneportation relations was adopted at the 33rd ~ �
Session of the Ccuncil for Mutual Ecoaomic Asaiatance. The program
ia a logical completion of the previously. adopted long-term special-
purpose cooperation programs in other branches of material production.
The basic task of the LSPC on the development of transportation relations
is a gradual adaptation of national transportation systems on the basis
of improved equipment and advaaced technologies for the moet effective
shipment of passengers and goode in international comm~unications, and,
consequently, the creation of the moat favorable conditions for the
further development of socialist economic integration. Ylowever, since
transportation in the syetem of the CEMA countries is developing within
national frameworks as an important component part of the national
economies, the better it operatea in the individual countries tr.e great~r
the possibilities for its subsequent integration.
During the 30 years of the exiatence of the CEMA there has been an
important development of transportation ia all of the participant ~
countriea. High~economic growth rates, the development of new arese,
and the development of integration processes have led to a consistent
growth of the freight turaover of all types of traasportation which can
be seen from the data cited below (in.billions of ton kilometera):
1950 1960 1970 1978 }g~o~
Bulgaria. 3.2 11.0 58.0 80.3 25
Hungary 6.1 15.6 26.1 40.1 6.6
GDR 17.5 47.9 122.0 132.0 7.5
Cuba ~ 3.6 60.9 51.3 14 ~
Mongolia 0.03 3.2 2.2 4.0 124
_ Poland 44.7 104.0 220.0 467.0 10
Romania 9.1 22.7 89.6 141.0 16
Soviet Union 694.0 18~.4.0 3673.0 5656.0 8.2
Czechoslovalcia 17.3 55.8 80.1 100.0 5.8
Sources: "Economies of the Member Gountries of the aouncil for Mutual
. Tconomic Aseistance," Moscow, 1974, p. 215; 1979; p. 219
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A aubstantial growth of freigh.t turnover in all types of general use
transportation ia a general tendency for all of the CEMA countries.
This is especially true of Bulgaria, Cuba, and Romania where during,the
above-mentioned period there was rapid economic development aad a new
atructure of na*_ional economic complexes was formed. In Mongolia a
network of transportatios~ roads was practically created from anew and
this explains the leap in the freight turnover of ita traneportation.
in tihe CEMA countries a subatantial development of the material and
technical base of traneportation took place and this can be traced
graphically on the basie of the example of the grorath and ~improvement
of their transportation networke (in kilometers): ~
Year Railroads River ~Iotor Pipelines
lines Vehicle �
Roads ~
Bulgaria 1950 3,967 470 ~24.0 !
1978 4,300 470 36.4 409 � �
Hungary ~.950 9,930 1~432 28.3 377 ~ ~
1978 7,900 1,688 30.0 1,7.25~
GDR ~ 1950 15,945 2,919 45.7 ;
1978 14,215 2,538 . 49.3 1,301 ~
Mongolia 1950 670 127 ~ :
~1978 1,600 397 46.7 ~
Poland 1950 26,312 3,695 261.0 . , ~
1978 26,900 3.,754 256.0 1,851 ;
Romania 1950 10,853 1,643 79.6 ~790. ~
1978 11,127 73.4
USSR 1950 117 130 1550 5.4 ,
- 1978 140.0 143.0 1410 ~ 64.0
- Czechoslovakian Social- 1950 13,124 458
ist Republic 1978 13,200 475 73.5 1,469 ~ '
i
In Thousands of Kilometers
Sources: "National Economies of the Member Countries of the Council for '
Mutual Economic Assiatance," Moscow, 1974, pp. 221, 224, 229,
235; 1979, pp. 225, 229, 236, and 243.
In analyzing the data which has been cited it is not difficult to see . ~
that the enormous growth of the freight turnover of the tranaportation
of the CII~IA countries has not been accompanied by a corresponding growth '
in transportation lines. Consequently, the mastery of the new freight
flows occurred to a substantial extent through an intenaification of the ~
use of the existing transportation network. ~
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New transportation construation hae been carried out~in all of the
CEMA countriea, but its ecope ha~ been varied. In the Soviet IInion~
in order to develop the productive forcee in the new.areao and also to
improve the maneuverability of the network new railroad coaetruction
has been consiatently carried out. During the period from 19SO through
1978 around 1,000 kilometers of railroads were built every year. Among
them is the Baykalo-Amur Main Line which hae the task of assiting in
the development of natural reaources and providing an~additional e~it
- to the ehores of the Pacific Ocean.
In the European socialist countries the constructioa of.new railroads
was especially intensive fn Bulgaria, Romania, and Poland, which is
connected with the necessitq for meeting inereased shipments as a
result of rapid economic growth and the development of foreiga economic ~
relations.. At the same time, in the GDR.and Hungarq the overall length
of railroad lines decreased somewhat through~the closing of inactive
aectors which did not meet the current demands of economic development.
The construction of new motor vehicle roads was especially intensive
in the Soviet Union and Bulgaria. In the other European socialist
countriea it was basically the task of reequipping the motor vehicle
road network that was accomplished.
~ The structural changes in it represeat an importaut tendeacy in the
developmenfc of the transportation of the CEMA countries. From 1950
through 1978, under the influence of the scientific and technological~ -
revolution and with.regard to world tendencies and the specific nature
of the transportation of the socialiat commonwealth, there occurred an
important redistribution of carrying work among the individual types'of
transportation (in a percentage of the freight turnover af all types -
of general use transportation): s ~ .
[Table on Following Page]
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Year Rail- Mari- River Motor Pipe-
~road time Vehicle �line
Bulgaria 1950 80.3 10.1 4.9 4.7 .
1978 21.4 61.6 3.0 12.4 1.6
Hungary 1950 89.6 1.0 7.9 1.5
1978 61.1 11.7 4.7 14.6 7.8
GDR , 1950 85.9 8.5 5.6 .
1978 40.1 47.4 1.5 7.3 3.6 :
Cub a 19 50 30 . 5 50.. 0 19 . 3' ;
1978 3.6 93.4 2.9~
Mongolia 1950 37.4 62.6 '
1978 67.6 0.1. 32.2
Poland 1950 78.6 20.3 0.6 0.5
1978 29.6 64.0 0.6 2.2 - 3.6
- Romania 1950 83.4 6.7 . 7.3 ' 0.5 2.1 -
1978 45.0 4~.5 1.6 7.4 3.4 p
USSR 1950 86.8 5.7 6.1 0.1 0.7 .
1978 60.6 14.4 4.3 . 2.1 18.6
Czechoslovakian 1950 93.5 4.4 2.1 ~
Socialist Republic ~1978 64.9 12~.9 3.2 9.2 9.8
Source: "National Economies of the Member Countries of the Council for
Mutual Economic Assistance," Moscow, 1979, pp. 220-221.
The advantages of planned economic management with regard to transporta-. ,
tion manifest themselves in the fact that its individual tppes are used
most fully in accordance with the technical and economic characteristics ,
of each of them and the apheres of their rational application. These j
advantages make it possible during various time periods and on the basis ~
of. the chief social and economic problems which are being~solved to
develop individual branches of transportation at more rapid rates.
The above-cited data testifiea to the rapid growth of shipments by
maritime transport to whoae development the CEMA countries have been
devoting ever-increasing attention since the middle of the 1960s. The
steady growth of the maritime merchant fleet of the statea of the
socialist commonwealth and the eubstantial increase in its share of
overall commodity turnover are the result of the ever-ir~creasing inclusion
of the CEMA countries in the international division of labor. '
In the Soviet Union pipeline transportation has received a aubstantial '
development. New conditions connected with a deepening of integration
~ processes have also led to the appearance of this type of transportation
in other CEMA counCries. The proportion of railroad traasport ia
decreasing, especially in Cuba~ Bulgaria, and Poland. However, this
does not mean that railroads are losing their former importance as the
chief type of transportation whfch takes care of the mutual deliveries
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of most of the CEMA countriea. The decrease in the proportion of
railroad transportation is taking place as a result of a shif t of part
of the shipments to other typea of traneportation oa which it is more
economical to carry them out. The absolute freight turnover of rail-
road transport, however, contiaues to increase. Thus from 1950 through
1978 it increased in the People's Republic of Bulgaria by more than
6.5 timea, in the Hungarian People's Republic 4.5, ia ~t?e GDR 3.5,
in the Polish People's Republic by almost 4 times~ in the Socialist
Republic of Romania by more than 8 times, ia the USSR almost 6
times, and in the Czechoslovakian Socialiat Republic by 4 timea.2
Another important tendency in the development of the transportation of
the CEMA countries has been the modernization of alreadq.existing trans-
portation lines and their adaptat3on to the new demands of the economic
development of the individual countries and of~the international social-
ist division of labor. Let us examine.these procesees through the
example of railroad transport. In accordance with the demands of
technological progresa, the level of its developmeat is now being
determined by the introduction of electric traction. ~The CIIKA countries
have achieved a high level of.electrification for their railroads.
" Ttieir total length at the beg3nning of 1979 was 57,085 kilometers. The
successes in the field of electrification of railroad transport stand
out more clearly for the proportion of electrified lines in the total
length of the network. At the ead of 1978 the proportion of electri-
fied lines in the total length of the operational.railroads came in
Hungary to 17.5, in the GDR 10.7, in Cuba 2.9, in Poland 27.1,
in Romania 18.4, in the USSR 29.2, and in Czechoslovakia 22
percent. The electrification of railroads in the countries of the
socialist commonwealth has been carried out at rapid ratea. Thus, as
recently as 1960 there were no electrified railroads in Bulgaria, while
in 1978 their proportion in the total length of railroads came to one- -
third.3 Priority is given in electrification to the basic railroad lines
with the greatest freight intensity or to lines with a heavy profile. ~
In summing up what has been said, it may be noted that definite work to
develop transportation has been carried out in the CEMA countries: ~
existing types have been modernized, new ones are developing, and there
has been a substantial improvement in the coordination of the work of
the individual types of transportation. Hawever, there are still a
number of unsolved problems in the development of transportation in the
countries of the socialist commornaealth. An analysis~of the investments -
which are allocated for the development of this important branch of
the economy shows that they provide for onl.y the most urgent needs of
the development of transportation. The structure of the capital invest-
ments which are assign~ed to transportation is such that the vast ma~ority
of resources are expended to strengthen the already exiating system.
This makes it possible to master new shipments with relatively small
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capital inv~stments and to achieve an enormcue economy of resourcea ia the
CEMA cauntries. Hawever. this practice has aleo inevitably led to a
large increaee in freight inte~aity and to a concentration of ehipments
on individual directions. Thus., for many years now the level of the use. ~
of railroad tranaportation in the USSR has been tl~e highegt in the world. ~ �
Soviet railroada wh3ch have a length of 140,000 kilometers perform the .
same volume of work as all of the baeic railroads of the world which ~
have a length of 1,200,000 kil.ometers. Every kilometer of xoad in the ~
~
USSR is used five times more intensively.than in the United Statea and
7 to 10 times more inte~aively than in the industrially developed
countries of weatern Europe. ~
~
In recent years in the transpo~tation development plans of the CEMA .
countries the basic attention has been devoted to reinforcing roiling ;
atock sometimes to the aletriment o� the~development of l;ines, ~unctions, ;
piers, and other immobile transportation equipment. This kind of ,
development sometimes~leads to:~the appearance of~a di:screpancy between
the capacity of a line and 3unetions and the circulating rolling stock, ~
between the capacity of a.port and the number and tonnage of ships, and '
so forth. At the present time there are definite difficulties in the
operation of Soviet railroads and, for the reason cited above, on a number
of important lines they are operating under atrain. Similar difficnlties
can also be seen in the transportation of the other~CEMA countries. It ,
is clear that greater a.ttention has to be given to the development o�
transportation in order to correct the situation which has arisen. Ati ,
the 25th CPSU Congresa L. I. Brezhnev said that "during the forthcoming
period we sha11 have to allocate more resources for an accelerated ~
development of transportation, communications, and the.system of material
supply everythin~ that ie called the infrastructure. In the past ~
we simply were not able to devote the necessary attention to many of
these spheres, particularly road.aonetruction and warehouse work. Now
we shall have to work on this and work oa it seriously."
Transportation is not only a continuation of the process of production,
but a general condition �or its normal functioning. For this reason the �
development of transportation has to outstrip the growth of production
somewhat. This is especially inportant now when the ~EMA countries are '
carrying out the construction of the material and technical base of
developed socialiam and~communism and are deepening~socialist economic
integration.
The adoption by the 23rd Session of the Council for Mutual Economic
Aasistance of the LSPC for the development of transporation relations is
a qualitatively new atage of cooperation in the field of transportation.
The c3evelopment of the LSPC on transportation was based on a solid
foundation and by cooperation practic~e in this field which has been tested
over many years. A testimony to this is a successful fulfillment of the
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- basic assignments on tranaportation contained in the Overall Program for
Socialiat Economic Integration.
The CEMA countries have already created a whole syetem of cooperation in
the field of traasportation. Gradually developing and improving,
integration processea :in Xranaportation have practically eaobraced all
of the aspects of its production work.
The most important directions ia the integration of tranaportation are:
~oint planning work and the coordination of plans for~the development
of international shipment~ and transportation equipment; ~oint trans-
portation conatruction; the work of international traneportation organi-
zation; and cooperation in the,field of rat~s.
Joint planning is the chief direction in the integration.of transportation. _
In this respect, the CEMA countries have covered a lcsng road from
a simple coordination of.the amounts of international shipments to the
working out of forecasts of the development of transportation over the
long term. Of great importance are the "Basic Directions and Tasks of
Cooperation by the CBMA Member Countries in the Field of Transportation
for the years 1976-1980 and~for the Subsequent Period" which was worked
out by the CEMA Permanent.Commission on Transportation. This documnent
develops and adda to th~ assignments of the Overall Program, and it was
at the basis of the development of the LSPC on the development of
- transportation relatione.
Adapting their tranaportation to the new conditions connected with the
development of socialist economic integration, the CEMA countries have
already carried out a substantial amount of transportation co~struction.
The importance of such a very large transportatioa pro~ect as the
"Druzhba" Petroleum Pipeline is w3.dely known. Another ~oint construction
project hae been completed the "Soyuz" Gas Transportation System.
The special feature of this construction consists in the fact that the
gas pipeline was built through the 3oint efforts of the fraternal
countries. The entire tract was broken up into sections whose construc-
tion was completely taken care of by the corresponding participant
country. Practically within the course of a single five-year plan
Europe's largest gas and chemical complex and a gas transpartation system -
of unique technical parameters with a length of 2,677 kilometers and
a carrying capacity of 28 billion cubic meters of gae a year were created.4
One more transportation pro3ect has been put into operation the
I1'ichevsk-Varna Ferry System which~was built by the USSR and the People's
Republic of Bulgaria.
Transportation organizations occupy an important place among the inter-
national branch organizations of the CEMA countries. They have been .
created in practically all types of transportation. For example, the
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Common Freight Car Pool ia the largest international railroad organiza-
tion. From its founding in 1964 until the present time the n~ber of
cars has increased from 95,200 to 290,260 units, that is by more than
3 times. The total freight capacity of this organization has increased . .
from 2 million tons~to 7.5 million tons. The amount of hauls has '
increased from 1].,000 to 25,400 care per day. There have also been -
qualitative changes: the proportion of four-axled cars has increased
from 2.7 to 40 percent.5 _
Recently the Soviet Union, Hungary, Czechoslovakia, and Bulgaria ~
created a new 3oint transportation organization "Interlighter"
with a headquarters in Budapest. The lighter system is a new element
in the practice of world shippiag; it makes it poseible to carry out
shipments in a single "river-eea" scheme. Ordinarily cargoes from
Danube ports w~re delivered on river barges to the mouth of the river ~
~ where they were loaded onto maritime vesaels. With the creation of
the lighte~ system things changed rapidly. Loaded li hters non-
self propelled barges with a freight capacity of 1100 tone are taken
by barge down the Danube to the port of Izmail where they are loaded
on board a maritime vessel a lighter carrier which takes on 26
lighters at a time and carriea them to their ports of assignment. ,As
the first runs by the lighter carrier "Yulius Fuchik" to the ports of
India and Pakistan have ahown,ichis method of delivering freight is very
_ effective. A special feature of "Interlighter" is the fact that it is .
the first 3oint transportation enterprise to operate on the basis of .
the principles of complete cost accounting. "Interlighter" is an open
organization and other states may ~oin in its work.
The CEMA countries have created and are developing a Single Container
Transportation System which is based on the use of large-tonnage all
gurpose and special containers. The overall aawunt of container shipments
has increased compared to 1970 by 2.2 times and in 1977 came to 69.9
million tona, with 21.3 million tons of cargo carried in large-tonnage
containers.6 -
_ Recently the countrias of the socialist commonwealth have carried out
~oint work to improve price setCing for international hauls. Within .
the CEMA Permanent Commi~sion on Transportation work has been done to
prepare a new International Railroad Transit Rate and new rates for
the use of freight cars. An International Motor Vehicle Freight Rate
has also been worked out.~
All of this has created new possibilities for determining the basic
future directions of the development of transportation on international
lines and for an overall solution of ma.jor transportation problems
through joint efforts and with regard to the latest achievements of
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scientific'and technological progrees. Completing the procese of
production in the sphere of distribution, transportation is coanected
in the closest way with all of the other branches of the economy, which -
- also appliea fti7.ly to~tranaportation routes of intet~national importance.
For thia reason,-in working out the development proapects of transporta-
tion two groups of issuee rec}uire examination and substantiation: What
demands will be put before transportation in the future and how would it
be best to develop transportation in order to provide for these demands?
Replying to~ the firet question in a general way~it caa be said that
traneportation will have to take care of an ever increa8ing aawunt of
pasaenger and freight hauls under the conditions of a further development
of socialiat integratioa. The economic relations between the CEMA
countries have a stable tendency toward conetant growth. The aanount of -
their mutual trade from 1950 through 1978 increased by 22 times, and
its growth~rates aubstantially eutetrip the growth rates of aational
income and industrial production.8~
From 1960 through I978 freight shipments among the CEMA countries
increased by 4 times, and passenger hauls by 10 times. According to .
forecasts made by the CEMA Permanent Commission on Transportation,
by 1990 pasaenger hauls smong the countries of the commouwealth wi11
increase by 2 times and freight hauls by 60 to 80 percent.9
Transportation will haye to provide with the greatest efficiency for all -
- of the needs for hauls for the fulfillment of the long-term special-
purpose cooperation programs in the other branches of material production.'
Put thie way, the matter acquires a more concrete content, for each of
the programs has its own specific nature and this makes diverae demands
upon transportation support. In addition, it is necessary to take
account of th~ general characteriatics of the region of the CEMA countries,
the level of transportation development which hae been reached~ and the -
basic tendencies in solving the moat important problems within the
framework of realizing the long term programs in the other branches of
material production. On the basis of what has been said, it is advisable
to discover the factors which reduce the demands upon international hauls
and the factors which increase these demands. _
The international socialist division of labor in the fuel and raw
material branches af industry leads to the greatest work load on trans-
portation. However, it has to be considered that the use of the
latest achievements of the scientific and technological revoluti~on is
introducing many new elements into the solution of this problem. Thus,
the creation of the IIn~fi3e d"8lectric Pawer System of the CEMA countries
is increasing the possibilities for transmitting electric energy from
one country to another and may help to form a tendency to reduce the
growth ratea of hauls of energy carriera in international communications.
- 1~9
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Atomic energy has an important place in energy supplies for the
CEMt1 countries. A program for the construction of atomic electric -
power stations has been developed within CEMA whose realization will
produce an increase in capacities which comprises more than one-third
of the total present electric energy potential of the European CEMA
countries and Cuba. As is known, an accelerated development of electric
energy is accompanied by reduced demands upon transportation. One should
also mention the development of a generai tendency connected with inter- -
national deliveries of output that has undergone a greater degree of
processing, which in a large number of cases greatly reduces the work
load on transportation.
The problem of distance is beginning to be ~iven increasing considera-
tion in dealing wizh the questions of siting large industrial productions~
of international significance which have been scheduled for construction.
Thus, in accordance with a new agreement on the development of the
chemical and microbiology industries, the production of energy intensive
chemical output will be expanded in the USSR (ammonia, methanol,.and
polyethyline) in exchange for low-tonnage and less energy intenaiv~
output which is produced in the other CIIKA countries (chemical plant
protection agents, dyes, and other materials for light industry).10
It should be especially emphasized that much has already been done by
the CEMA countries for the transportation of fuel in international coum~u-
r~ications on the basis of the development of a powerful network of
pipelines and gas pipelines. Thus, by 1978 more than 500 million.tons
of Soviet petroleum had been pumped through the "Druzhba" Petroleum '
Pipeline. As the calculations of GDR specialists show, the amount of
actual gas which will s.upplied to this country through the "Soyuz" Gas
Pipeline will correspond to the energy of 20 million tons of brown
co~.l.ll To this should be added the successful operation of olefin �
pipelines between the USSR and the Hungarian People's Republic;, the GDR,
and the Czechoslovakian Socialist Republic. The development of pipelines
has not only provided effective transportation for petroleum, gas,
and chemical output, but has also substantially reduced the workload
on other types of transportation. -
At the same time, the action of a numb~r of factora will lead to an
increase in the workload on transportation. First, a f~rther development
and deepening of the integration process between the CEMA countries will
inevitably lead to an increase in foreign economic relations, which
will increase the demands upon,transportation. Secondly, in the future
we can expect an expansion of economic relations between the CEMA
countries and third states, and, especially, with the developing
countries, and this will inevitably increase the workload chiefly on
maritime transport. Thirdly, the process of the development of the
productive forces in newly developed areas will continue in the CEMA
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countries and, above all, in the Soviet Union. The raw materials, fuel,
and industrial output which are obtained there will inevitably get
into rhe sphere of integration, which will also increase the workload
on transportation. Fourthly, with the development of integration we can
expect a further increase in the dimensions of the ~oint construction
and operation of large industrial facilities. ~'he estimated cost of
such facilities has already reached approximately 9 billion rubles.
This will also increase the workload on transportation.
And, finally, and fifthly, there is a question of fundamental importance.
Until recently the basic attention regarding transportation support was
devoted to the solution of the fuel and raw materials problem and at
certain stages of the development of integration this was entirely
correct. At the present time however, along with this there has arisen
an urgent necessity to concentrate our attention also on *_he problems
of transportation support for th~a development of international speciali-
zation and cooperation in the processing branches of industry, and,
especially, in machine building as the chief direction of 3.mproving the
integration of the CEMA countries during the coming +Zwo five-year periods.
This is making noti so much quantitative as new qualitative demands upon
transportation. First of a~l, in order to establish an efficient
production specialization it is necessary to perform work on the trans-
portation factor which could have an important influence on the efficiency
of this process. This raises the problem of determining the most rational
Places for the siting of specialized enterprises. With the international
specialization and especially cooperation of production transportation
does not simply deliver 3.ndividual parts and units. With its help a
rhythmic conveyor has to be set up which provides for the complete safe-
keeping of the products being transported, and this will require the
development and use of new transportation technologies, the extensive
use of containers, and so forth. Further container support for shipments
is connected with the realization of the LSPC in the production of
consumer goods.
In considering the second group of problems which are connected with
determining the basic directions for the future development of trans-
portation special mention has to be given to the necessity for using -
the latest achievements of scientific and technological progress. In
his day K. Marx emphasized that "it is precisely the revolution in the
method of production in industry and cropping which made necessary a
revolution in the general conditions of the social process of produc~ion,
t}~at is, in the means of communication and transportation."12 This
fundamental proposition is important in our day when under the influence
of the scientific and technological revolution a fundamental reconstruc-
tion of transportation equipment is taking place and new, improved
transportation technologies are being created. With regard to the CEMA
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countries ttic~ probl.em exists of the necessity of using and uniting
~ tli~ advantages of socialism on an international scale with the latest
achiev~~ment~ of science and technology. It is from this point of view
tlin~ r.f~e basic measures of the LSPC in the field of transportation are ~ ~
consiclc~red.
This program provides for the solution of the problems of developing
effective transportation communications between the CEMA countries,
border railroad junctions and ports, an expansion of container and '
other progressive methods of ship'ment, and the mechanization of loading
and unloading work. The realization of these hasic directions is
_ accomplished with the help of the conclusion of agreements on individual
important issues. rhus, agreements on cooperation in the field of
railroad transnort provide for the reconstruction and reequipping of
leading international lines, the construction of two railroad border
~ passages from the Soviet Union to Hungary and Czechoslovakia, and a
further development of a single container system. Agreements have
been signed on the development and reconstruction of motor vehicle
roads in the directions of Moscow-Warsaw-Berlin and Moscow-Bucharest- �
5of ia. A number oP agreements define cooper.ation in the field of civil
aviation, particularly in the development of international airports and
~he joint operation of individual international airlines. Preparations
are in progress for the conclusion of a number of other agreements.l3
The CErfA countries have been compelled to solve a problem of historical
origin which is c:onnected with the different widths of the rails of ~
their railro2ds which makes it necessary to reload many tens of millions -
of tons of diverse freight at the western border stations of Soviet
railroads. New transportation con~*ruction through the 3oint efforts of
the interested countries is planned for the solution of this probletn.
As ;~ract:i.ce has shown, the introduction of wide-guage rails on the terri-
tory of the integration partners has completely justified itself. Thus,
the introduction of the wide rails of Soviet railroads from Reni (USSR)
to Galats (Socialist Republic of Romania) and from Uzhgorod (USSR) to
Koshitse (Czechoslovakian Socialist Republic) has substantially removed
sr_~rains in the shipment of mass freight.
The construction of a wide-guage railroad between Vladimir Volynskiy
(USSR) and Katovitse (Polish People's Republic) has now been completed.
It was carried out in accordance with a Soviet-Polish agreement signed
in 1976. The new railroad which is mcre than 400 kilometers long will
substantially improve communications between the two �raternal countries ;
and, most important, ~a.ill make it possible to eliminate the reloading '
of numerous cargoes at border stations. What is involved is uniting
the Krivoy Rog Iron Ore Basin with the Silezian Hard Coal Basin by the
shortest and most ect,nomical transportation route.
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The Polish ferrous metaTlurgy giant in Katovitse operates on Soviet -
' iron ore. Its delivery involving reloading and border stations is _
~ connected with great difficulties and costs. In 1980 almost 12 million
tons of Krivoy Rog ore wi11 have to be delivered to the combine in -
Katovitse and in 1990 16 million tons. In the future an increase in
deliveries to the USSR of coking coal and sulphur from the Polish
People's Republic is expected. Under these conditions, the construction _
of a railroad was the most economical solution of the problem. The
track oP the new line intersects .the Visla, the San, and the Bug. In
. addition to four large bridges, around 560 different kinds of service
installations had to be built on it. The use of the existing narrow-
guage railroad made it possible to accelerate the construction rates.
The USSR delivered.62,00 tons of rails and 800,000 ties for the new
1iae. The total cost of the construction came to 18 billion zlotys.
The implementation of the complex of ineasure� will make it possible to
bring the freight capacity of freight trains on the east-west lines to
4,000-4,800 tons, and on the north-south lines co 3,000-4,000 tons, and
to increase the maximum speed of freight trains to 100 kilometers an
hour and of passenger trains to 120 ta 140 kilometers an hour. As a
result , the ca:.rying capacity of the lines will substantia7ly increase.
The CEMA countries will have to solve a large number of problems in the
field of motor vehicle transportation. It is pl.anned to substantially
strengthen its material and technical base i. the near future. It is
essential to increase the participation of motor vehicle transportation
in international hauls. This is especially important now with the
intensive development of international production sp~cialization and
cooperation with which in a number of cases hauls can be taken care of
especially efficiently by trucks. In addition, there is every reason
to expect a further development of passenger t~auls by buses in inter-
national communications.
In this connection, the task exists of the reconstruction and new ~
construction of motor vehicle roads, above all of international signifi-
cance, the organization by interested countries of the operation through
their common efforts of motor vehicZe transportation lines, and the
creation of joint motor vehicle transportation enterprises. It is clear .
that international motor vehicle roads have to be properly supplied.to
service passengers and transportation equipment: motels, camping grounds,
service stations, and se forth.
The countries of the socialist commonwealth are planning a consistent
sol~ition of the problem of developing freight hauls by the most ~
ef~ective method in containers. Ldithin the framework of a furthar
development of the Single Container Transportation System it is
planned to increase the amount of container hauls between the CEMA
countries by approximately 2.5 times by 1985, and by 4 times by 1990
compared with the expected volume of hauls in 1980.
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The CEMA countries are considering the possibility ~of including the i
most important measures in the field of transport~tion in a coordinated
plan of integration measures. ~ ;
In addition to the adoption of the LSPC on tr�ansportation, a correspon- !
ding sub-program on machine building is being composed in order to "
provide the necessary output for the planned measures to reconstruct ~
and dcvelop the transportation of the CEMA countries. This kind of i
approach is natural and it testifies to the overall nature of the
tasks being accomplished.
The reconstruction of existing lines of communication and the construc-
tion oF new transportation facilities in the future will lead to a ;
change in the structure of transportation which services the inter- .
national relations between the CEMA countries.
Railroad transportation will continue to be the basic type of transpor�- ~ ;
tation and in the future will account for more than 50 percent of the
international shipments between the CEMA countries. At the same time,
its proportion will decrease somewhat. The importance of maritime, ~
motor vehicle, and pipeline transportation will increase in international ~
shipments. Serving the sphere of the international socialist division ~
oE labor, each type of transportation will be used most efficiently. '
The 33rd Session of the C~MA adopted an important decision to apply to
the Socialist Republic of Vietnam the fundamental propositions of the ~
Overall Program on Special Measures to accelerate the development of ~
its economy as was done with respect to Mongolia and the Republic of !
Cuba, in order to help the hero:ic Vietnamese people in socialist ~
construction. This position, of course, applies fu11y to transportation ~
also. Mongolia has already been given important assistance in the
formation of its transportation system: the Trans-Mongolian Railroad ~
Line and a line connecting the Darkhan industrial area with the country's
basi.c railroad network have been built. The CEMA countries are ~j
;~roviding assistance for the Mongolian People's Republic in the develop-
m~,nt of motor vehicle and air transport, and also in working out the
" principles of the creation of a transportation system for the country
as a whole. Important assistance in the development and formation of F
its transportation system is also being given to the Republic of Cuba
with regard to the specific features of this country. ~
The restoration and organization oP the normal oper.ation of the "unity" ,
railroad bztween Hanoi and Ho Chi Minh is the most important transporta- ,
tion problem for the Socialist Republic of Vietnam. This.line connects
the deltas of the two great rivers the Red and the Mekong Rivers '
where the basic agro-industrial potential of the republic is concentrated. '
In 1977 the main transportation artery of Vietnam which connected the
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country's north and soutk~ hauled 420,000 passengers and 106,000 tons
of trrlght.14 Th:ts, of course, does noC meet the demands.which are
betnb madN upon I.t. 'l~or this reason,.the Soviet Union, Hungary, Poland,
,~nd C�r.c,choslovakLa ar~ already providing important asaistance in the
restoration and reconstruction of the lirie, supplying diverse equipment
and specialists for this purpose.
As was stated at the 33rd Session of the CEMA by the Chairman of the
USSR Council of Ministers A. N. Kosygin, the development and appsoval
of long-term special-purpose cooperation programs is only the initial
stage of the work. We shall have to develop the programs into a whole
system of agreements which concretely def.ine the terms and periods of
cooperation and the commitments of the participating countries: In
order to develop programs and consistently accomplish important tasks
with their help it is essential to develop serious scientific research
through ttie joint efforts of CEMA scientists and specialists, ~
especially in the field of economics. It appears that with regard to
transportation it is necessary first of all to define the general
direction ard the chief goal and to solve the individual problems
stage-by-stage on the way to the realization of this.goal. This goal,
i.t seems to us, shauld be the creation in the future of an integrated
transportation system for the CEMA countries.
Al1 of the experience which has been gained by the CEMA countries in
cooperation in the field of transportation and the enormousness and
importance of the tasks connected with a further development of integra-
tion which are being accomplished with its help testifies to the
timeliness of putting the question this way. Im this respect account
also has to be taken of the specific characteristics of transportation
which is profoundly international in its nature. The fixed capital of
transportation (rolling stock) can successfully be moved beyond the
limits of state borders. As practice shaws, precisely because of this
transportation was the first and largest sphere of integration among
the C~IA countries. This is also witnessed by the long standing work
of the international transportation organization of the CEMA countries
of the joint operation of transportation equipment. The necessity for
this approach is alsa a result of the fact that transportation of a
material implement of integration has to develop at somewhat outstripping
rates. Only if this condition is observed can the success of integra-
' tion as a whole be ensured.
All of the above-cited circumstances bear witness to the fact that
transportation has to be given priority in the development of integra-
tion processes, and that the experience which is obtained h~re can be
transferred to improving integration in the other branches of material -
production. In our view, an integrated transportation system should
be understond as the kind of adaptation of the kind of transportation
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systems of the CEMA which would be achieved with regard to the latest
achievements of scientific and technological progress and would consist
of well supplied and effectively operating international railroads,
p~trol~um and gas pipeline systems, water and air routes, and motor
vc~liiclc~ roads. The basic function of the integrated transportation
system should be the movement of the ever increasing commodity masses
resulting from the international socialist division of labor with the
smallest expenditures of live and embodied labor.
FOOTNOTES
1. V. I. Lenin, "Complete Wor'xs," Vol. 44, p. 302. .
2. "Economies of the Member Countries of the Council for Economic
Assistance," Moscow, 1979, p. 227.
3. Ibid., p. 225.
4. "Economic Cocperation of the CEMA Mzmber Countries," No. 1, 1979
p. 84.
5. Tbid., p. 80.
6. Ibid. ~
7. "On the Ways to Further Improve the Economic Principles of Cooperation
Between the CEMA Member Countries in the Field of Transportation."
Materials of an International Sywposium, Warsaw, 1978, p. 12. .
8. PRAVDA, 30 .June 1979.
9. Ibid., 3 March 1979.
1U. Ibid., 30 June 1979.
11. "Economic Cooperation of the CEMA Member Countries," No. 1, 1979,
p. 85. �
12: K. Marx and F. Engels, "Works," Vol. Z0, p. 395.
13. PRAVDA, 30 June 1979.
~