JPRS ID: 10156 USSR REPORT INTERNATIONAL ECONOMIC RELATIONS

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000400080010-8
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 26
• Document Creation Date: November 1, 2016
• Sequence Number: 10
• Content Type: REPORTS

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-04850R000400080014-8
- FOR OFFICIAL USE ONLY
_ JPRS L/ 10156
2 December 1981
USSR Re ort
p
INTERNATIONAL ECONOMIC RELATIONS
CFOUO 5/81)
~
FBIS FOREIGN BROADCAST INFORMATION SERVICE
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004400080010-8
NOTE
JPRS publications contain information primarily from foreign
newspapers, periodicals and books, but also from news agency
- transmissions and broadcasts. Materials from foreign-language
sources are translated; those from Er.glish-language sources
are transcribed or reprinted, with the original phrasing and
other characteristics retained.
Headlines, editorial reports, and material enclosed in brackets
are supplied by JPRS. Processing indicators such as [Text]
or [Excerpt] in the first line of each item, or following the
last line of a hrief, indicate how the original information was
processed. Where no processing indicator i.s given, the infor-
mation was summarized or extracted.
~
, Unfamiliar names rendered phonetically or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in parentheses were not clear in the
original but have been supplied as appropriate in context.
Other unattributed parenthetical notes within the body of an
_ item originate with the source. Times within items are as
given by source.
- The contents of this publication in no way represent the poli-
cies, views or attitudes of the U.S. Government.
COpYRIGHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF
MATERIALS REPRODUCED H.EREIN REQUIRE THAT DISSEMINATION
OF THIS PUBLICATION BE RESTRICTiD FOR OFFICIAL USE ONI.Y.
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFICIAL USE ONLY
JP RS L/ 1015 6
2 December 1981
USSR REPORT
INTERNATIONP.L ECONOMIC R~LATIONS
(FOUO 5/81)
CONTENTS
USSR-CEMA TRADE
Managing Foreign Economic Ties To Eurther Economic Integration
(V. Grinev; VOPROSY EKONOMIKI, Aug 81)
TRADE WITH LDC'S
- Book on CEMA Cooperation With Socialist-Oriented Developing States
(Natal'ya Aleksandrovna Ushakova; STRANY SEV I
RAZVIVZYUSHCHIYESYA GOSUDARSTVA SOTSIALISTI~iESKOY
ORIYENTATSII, 1980)............. 9
_ a _ [III - USSR - 38a FOUO]
.,n.-� ,,.f..,
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFIC[AL USE ONLY
~
USSR-CEMA TRADE
MANAGING FOREIGN ECONOMIC TIES TO FURTHER ECONOMIC INTEGRATION
Mosc~w VOPROSY EKONOMIKI in Ftussian No 8, Aug 81 pp 108-114
[Article by V. Grinev: "Pe~fecting the Management of USSR Foreign Economic Ties With
CEMA Countries"]
[Text] Foreign economic ties play an important role in accelerating scientific and
technical progr.ess, in intensifying and ~ncreasing the effectiveness of social p�ro-
duction. Their importance has grown esp~:cially given the development and continuing
deepening of the economic mechanism of socialist integration, which cotiditions pre-
suppose the adaptation of all its elements to serving the effective interaction of
all the CEMA-country national economies. This is being effected through perfection
both of the various forms of joint planning activity and of the national systems of
foreign ec~onomic ties management.
- All this predetermines the urgency of problems associated with further perfecting
- the management of foreign economic activity. Changes in USSR foreign economic ties
management result direcCly from the overall task set by the party, that of bringing
the economic mechanism into accord with the modern demands of changing the economy
over onto an intensive development track, with a higher level of all economic work.
The "Basic Directions of USSR Economic and Social Development in 1981-1985 and Up To
1990" approved by the 26th CPSU Congress point out the necessity of "~:aing efficiently
...the possibilities of foreign economic ties to improve the efficiency of social pro-
duction."
Deepening economic integration is possible only on a base of improving national forms
of foreign economic activity management. The most perfect forms of planning coopera-
t~on will not be able to function at all if they are not supported by national eco-
nomic tools.l
The rates and effectiveness of CII~lA-country integration cooperation in the long term
will depend on the ability of r~ational mechanisms as a~hole and foreign economic ac-
tivity management systems in particular to ensure conditions for the interaction of
CEMA-country national economic complexes. All this necessitates constant improve-
' ment in national economic mechaniams and their foreign economic blocks in order that
they will not only ensure the effective use of internal resources, but also the bet-
ter actualization of the advantages of socialist integration.
1See: "Upravleniye vneshneekonomic'heskoy deyatel'nost'yu sotsialisticheskiich stran"
[Managing Socialist Country Foreign Economic Activity], Tzd-vo Nauka, 1979, p 52.
1
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFICIAL USE ONLY
Implementing coordinatad measures in the cours~e of CF~1A-country economic integration
must help develop the natiot~al foreign economic ties management syste~s so that op-
timum opportunities for interaction by the socialist states will be created as a re-
sult. Along with this, improvement in the planning mechanism of economic cooperation
and the davelopment of new forms of such cooperation (long-range target cooueration
programs, bilateral long-term programs of production specialization and cooperation
between the USSR an3 the European socialist countries) create opportunities for im-
proving the national mechanisms. Their developnent, approval and implememtation are
very important factors in actualizing the tasks set by the fraternal CEMA-country
communist and worker parties on further unifying efforts for solving the p~votal
problems of socioeconomic development aad the more intelligent use of resources
available in the socialist community for increasing economic potential aad improv-
ing its effectiveness.
The implementation of LTCP [long-range target cooperation programs] and bilateral
lnng-term programs of production special ization and cooperation are creating a solid
base for significant improvement in the degree of mutual supplementation of the CEMA-
country economies and for carrying out a coordinated policy of further strengthening
mutual cooperation. It is precisely these planning forms which facilitate coordinat-
ing the ~oint actions of the countries concerne~ in the most diverse areas,
At the same time, the degree of development of the integration process at all levels
of the national ~conomic mechanism and their actual engagement in this process.and
the effectiveness of their participation in it depend largely on the aggregate of
economic-organizational conditions of ~he effective implementation of production,
trade, scientific and technical contacts among the socialist states. Implementation
of the measures planned will obviously b e determined largely by the extent to which
the national economic mecltanisms will turn out to be oriented towards meeting the ob-
_ ligations assumed by each country. In view of the USSR's role in the system of eco-
nomic integration relations, perfecting the system of foreign economic ties manage-
� ment in our country with a view towards better adapting it to the demands of the so-
cialist integration process is of important significance. In our country, ~oreign
economic ties are being developed rapidly, outsCripping production growth. Thus,
the gross social.product increaaed 2.3-f old during the 1965-1979 peY~iod, which for-
eign trade turnover volume increased 2.9-fald. The Com.~nunist Party of the Soviet
- Union attaches enarmous importance to improving the forms and methods of foreign
economic activity management.
= CPSU resolutions have worked out a program for perfecting foreign economic ties and
have formulated the basic principles and dir.ections of their further deveZopment.
Thus, the 24th Party Congress pointed out the necessity of increarsing the initiative
and responsibility of the ministries and enterprises for the effective development
of foreign economic ties. The primary d irections in which they are to be improved,
the party congress determined, are dissemination of cost-accounting principles to
this sphere of activity and increasing the material interest of a11 foreign trade
and industry links in meeting international obligations. At the same time, the re-
sponsibility of organizations connected with foreign ecanomic activity has grown.
The 25th Party Congress focused attention on a number of important questions of
further improvin$ planning, management and foreign economic activity, especially in
connection with developing long-range target cooperation programs. In particular,
the "Basic Directions of USSR National Economic Development for 1976-1980" pointed
~ut the necesairy of carrying out m~asures to cont~!nue improving the "planning, man-
agement and organization of USSR foreign economic ties."
2
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFICIAL USE ONLY
A CPSU Central Committee and USSR Council of Ministers decree adopted in 1976 was
devoted to perfecting foreign economic activity management. As L. I. Brezhnev noted
at the October (1976) CPSU Central Com~ittee Plenum, "It planned a system of ineasures
to overcome existing shortcomings and provided important instructions to central eco-
n~mic agencies. The Central Co~mittee of our party will constantly monitor work on
actualizing the indicated measures."
New opportunities for systematically improving foreign economic ties management have
been opened up by the 1979 adoption of the CPSU Central Committee and USSR Council
of Ministers Decree On Improving Planning and Strengthening the Influence of the
Economic Mechanism on Improving Production Efficiency and Work Quality." The system
~ of ineasures for perfecting planning management contained in it have directly in-
fluenced the development of and i.mprovement in the effectiveness of foreign econo-
mic ties and strengthening cooperation with CEMA countries. Expansion of the plan-
ning ttme horizon, the demand for strict balance in all the most important propor-
tions, strengthening planning, financial and labor discipline, and improving the or-
ganization and smoothness of enterprise, association and branch operation meet these
goals. The "Basic Directions of USSR Economic and Social Development for 1981-1985
and Up To 1990" adopted by the 26th CPSU Congress pQSes the task of "increasing the
responsibility of ministries, production associations, enterprises and organizations
for meeting obligations in the area of foreign economic relations."
Resolution of the tasks set us has been associated with the transition to qualita-
- tively new content in the processes of the international division of labor, to in-
creasingly linking them to a number of important national economic problems of de-
veloping out country's economy. The fact is, as 0. Rybakov correctly notes, that
the "level of development of USSR foreign economic ties with the socialist countries
and the major problems being snlved ~ointly with them have begun influencing in the
most direct manner the development of the Soviet Union national economy and the shap-
- ing of a number of the most important national economic proportions. Searches for
the most effective planning decisions and the development of optimum plans for de-
veloping foreign economic ties are therefore among the most important ~obs in draw-
ing up the nationa]. economic plan for the USSR as a whole.i1
Practical planning and management of foreign economic ties have shown that the.ef-
fective development of foreign economic operations and growth in their effectiveness
are determined foremost in the production s~here. This objectively heightens its
role in developing foreign economic ties and causes a search both for optimum forms
of relations in the area of industry and foreign trade and for a basic organizational-
economic cell in which to concentrate relations concerning production and scientific-
technical cooperation with the socialist states.
- In a ma~ority of the C~IA countries, the leading role in organizing foreign economic
activity belongs to the production associations. They have received substantial po-
wers to develop foreign economic relations with foreign partners. (This does not,
however, signify that the production asaociation receives the right, in all in-
stances, to go into foreign markets and set up direct contacts with foreign
10. K. Rybakov, "Planovyye osnovy ekonomicheskoy integratsii stran-chlenov SE'V"
[Planning Foundations of CEMA Member-Nation Economic Integration], Izd-vo Mysl',
1980, p 179.
3
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFICIAL USE ONLY
- contractors. The choice of forms of participation in foreign economic activity de-
pends on the conditions in a given country. Thus, in certain CIIKA countries, for-
eign trade organizations have been transferred to branch ministries and associations
(PRB [People's Republic of Bulgaria], SRR [Socialist Republic of Romaina]); granted
the right to carry on foreign trade operations to large enterprises and combines
(HPR [Hungarian People's Republic], GDR); converted certain foreign trade organiza-
tions into joint-stock companies, their members being industrial enterprises and
foreign trad~ enterprises (CSSR [Czechoslovak SSRJ). In our country, this agency
is the branch industrial ministry, which is entrusted with the responsibility for
implementing corresponding long-range and current plans, as well as sections of the
Comprehensive Program of Socialist Economic Integration. The branch industrial min-
istries are developing cooperation with the departments and economic organizations
of the socialist countries on a broad range of questioas connected foremost with
setting up intrabranch production specialization and cooperation.
The branch ministries are being {r.~reasingly enlisted in solving such basic grob- .
lems of foreign economic activity as carrying out five-year and current export and
import plans, plans for using commodity markets, broadening the products list and
volume of export output, improving the quality and competitiveness of export goods
and the eFfectiveness of foreign trade operations, this being done while the Minis-
try of Foreign Trade preserves the state foreign trade monopoly.
The continuing strengthenir~g of the role of the industrial ministries as organi.zers
of long-range branch cooperation is associated with their having been transformed
into the main agencies for comprehensive foreign economic activity planning and man-
agement and granted the necessary rights to set up contacts with foreign partners and
use foreign economic information. All this does not signify a weakening of the prin-
- ciple of centralized managPment of foreign economic ties and will facilitate fuller
- actualization of the potential opportunities the branch ministries have for deepen-
- ing cooperation, in particular, in the area of international production specializa-
tion and cooperation, in utilizing new and technically improved output, scientific
and technical progress, and so on. "Strengthening the principle of centralized for-
eign economic ties management would at the same time be unthinkable without expansion
of the rights and, most importantly, the respensibility of planning and economic
ageneies."
Heightening the role and responsibility of the induatrial ministries in foreign eco-
nomic activity creates prerequisites for developing direct cooperative ties among
- branch ministries, production associations, enterprises and organizations of the USSR
and CEMA member-nations as is anticipated in the "Basic Directions of USSR Economic
and Social Development for 1981-1985 and Up To 1990."
- Given the expansion of their rights to carry on foreign economic activity, the branch
ministries and departments as organizers of production and scientific-technical coop-
eration play a large role in improving foreign economic ties. In this regard, real
prerequisites are created for increaeing the ~ffectiveness of foreign economic acti-
_ vity management.
However, in order for these prerequisites to be fully actualized, we need op~~mum or-
ganizational-economic conditions determining Che activity of the branch ministry in
1B. N. Ladygin, 0. K~ Rybakov and V. I. Sedov, "Sotsialisticheskoye sodruzhestvo na
novom etape" [So~ialist Cooperation At A New Stage], Izd-vo Mysl', 1976, p 165.
- 4
FOR OFFICIAL USE ONL.Y
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000400480010-8
FOR OFFICIAL USE ONLY
the international socialist market. In this connection, we need to perfect the or-
ganizational-economic forms of the interconnection of industry and foreign trade, to
create real organizational opportunities for synthesizing production-technical and
' foreign-trade ties into a unified system.
The reorganization of all-union foreign trade associations, begun in 1978, into al~.-
union cost-accounting foreign trade associations managed by the Ministry of Foreign
Trade, with the participation of the branch ministries, has been an important step
along this line. Thanks to this organization, real economic-organizational prerequi-
sites ensuring the effective participation and increased responsibility of industry
for ~he end results of marketing the export output being produced have been created.
Expo~t-import companies are being organized on a branch or subbranch basis.l For ex-
ampl~, the "Avtolada," "Avtovolga" and other companies have been created as part of
the "Avtoeksport" foreign trade association.
With a view towards attxacting branch ministries and departments and the large in-
dustrial enterprises and associations more broad~y into foreign trade activity, a
board formed of representatives of the Ministry of Foreign Trade and corresponding
branch ministries and departments on a parity basis is created in the cost-accounting
foreign trade association. The foreign trade association board concentrated its ac-
tivity on questions of implementing export and import plans, improving the effective-
ness of foreign trade operations, ensuring that suppliers carry out the export as-
signments set them, making fuller use of favorable commodity market conditions~ tak-
ing organizational-technical steps to increase exports, broaden pr~ducts lists for
exports, and improve the quality, competitiveness and techni.cal level of the goods.
In other words, the b~ard's work synthesizes the functions of industry and trade,
doing some integratton of activity on managing export productfon on a unifled organi-
zational basis.
In our opinion, this is a feasible direction in which to improve the organizational-
economic ties of production and foreign-economic activity, a direction creating op-
portunities ~or its ~omprehensive management. The efficiency with which an all-
union foreign trade association functions as a cost-accounting link will obviously
depend directly on how effective its organizational-economic ties with a correspond-
ing group of industrial subdivisions are.
~ost-accounting foreign trade associations linked by organizational-economic rela-
tions with corresponding branches of industry are solving a number of pressing prob-
lems. First of all, the best conditions are being shaped for further improving ties
between production and foreign trade, ior increasing flexibility in solving foreign
- economic problems, for ensuring the comprehensive development of questions of branch
cooperation with CIIKA and third-party countries, for achieving fuller and more pre-
cise recording of aggregate economic results of production, international production
specialization and cooperation and foreign trade activity, for evaluating th~ actual
effectiveness of exports and imports of corresponding goods and services for the
country's national economy.
The involvement of branch ministries and departments in foreign trade activity, the
participation of industry representatives in talks with foreign contractors, the
1See: "Sobraniye postanovleni.y Pravitel's~va Soyuza Sovetskikh Sotsialisticheskikh
Respublik" [Collected USSR Decrees], 1978, No 13, Article 91.
5
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
- FOR OFFICiAL USE ONLY
creation of ~oint documents regul~ting the activity of production and foreign trade
structural subdivisions in a single complex, continuous information from associa-
tions, branch ministries and departments on foreign market demands, technical leader-
ship by national economic specialists sent abroad by foreign trade associations, and
so forth, strengthening the economic independence and increasing the responsibility
of foreign trade associations for the results of their own activity all this fa-
cilitates shap~ng effective organizational-economic ties between industry and the
foreign economic sphere.
Increasing the role of the branch ministries in foreign economic also entails, in our
view, a gradual strengthening of the role of the largest preduction associations in
this cooperation, foremost in solving problems of production specialization and co-
operation within the CEMA framework. At the same time, the organizational-economic
prerequisites must be created for strengthening their material responsibility for
the effectiveness of cooperation with the economic organizations of the socialist
countries and for meeting contractual obligations. In this connection, continued
improvement in relations between the production sphere and foreign tr~de so as to
ensure their ~oint economic and coet-accounting interest in improving the effective-
ness of foreign economic activity and the active participation of branch ministries,
departments and production associations in managing foreign economic relations, and
effecting effective economic ties between foreign tr~de and the production sphere
at the industry branch and subbranch level with a view towards better use of the po--
tential opportunities of this cooperation are obviously of important significance.
The institution of cost-accounting relations between industry and foreign trade is
possible, in our view, only at the level of links operating on cost-accounting terms.
Overall material interest in increasing the effectiveness of foreign tra~de can exist
only where its results influence the criteria and indicators of economic incentives.
In particular, economic-agreement relations between production and foreign-trade en-
terprises remains an open ques~ion, foremost with regard to international intrabranch
production specialization and~cooperation, in which these relations can be set up on
a stable planning basis and practically all delivery terms will be known long in ad-
vance. It would be possible, when setting up cooperation ties, *o examine the ques-
tion of. extending the commission interrelationships between industry and foreign
trade operating in the case of imports to cover exports as well.
Strengthening interactions between the production and foreign economic spheres pre-
supposes a strengthening of the cost-accounting mechanism. The existing system of
cost-accounting relations does not anticipate a direct influence by foreign trade
results on the financial indicators of industrial enterprises and does not interest
them in lowering expenditures conne~ted with producing exports or in improving pro-
duct quality. Contract and domestic wholesale prices are set independently of each
other, based on different price-formation principles. The forrign trade associativn
buys from an enterprise output manufactured by it according to a~ob-authorization
order and pays all outlays incurred in its production. In marketing this output in
a foreign market, the association receives either a profit or a loss. In both in-
stances, the financial results of going into a foreign market are regulated by the
state budget. The basic task of the "induatry - foreign trade" cost-accounting
- chain is to increase the national economic effectiveness of exparts and imports, ~
which depends on optimizing the foreign trade structure, on the one hand, and the
relationship of expenditures to foreign trade prices, on the other, These two re-
- quirements are interconnected and contradictory. Thus, the interconnection is mani-
fested when examining and recording the relationships of foreign trade pr3ces to
6
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000400480010-8
FOR OFFICIAL USE ONLY
domestic expenditures when optimizing the export-import structure, and the contradic-
tion is manifested in the limited nature of export resources. It is known that ex-
port production is a significant proportion of all production at only a few enter-
prises, that the ratio of exported to imported output favors imports in machine
building, and that there are large differences in the levels and dynamics of change
in domestic wholesale and foreign trade prices.
A system of cost-accounting levers and stimuli aimed at increasing the effectiveness
of foreign economic ties must first of all ensure a correlation between domestic
wholesale and foreign trade prices and stimulate an increase in the difference be-
tween expenditures and foreign trade prices for exports.
The level of exFenditures on producing exports in the USSR is defined as the level of
wholesale prices for basic raw and other materials, which differ from world prices.
World and contract prices constantly increase, but domestic wholesale prices are
generally characterized by stability. If domestic wholesale prices for exported and
imported output are set on the basis of domestic, ob~ective ~expenditures, then exports
generate revenues and imports generate losses. In both instances, this difference in
prices results economically from the fact th2.t foreign trade prices are based on world
prices, whose levels and relationships do not coincide with the levels and relation-
ships of domestic wholesale prices.
Strengthening economic ties between industry and foreign trade regarding exports
could be ensured by stimulating an increase in profit from selling output in a for-
eign market, which depends on the level. of producer expenditures and on an agreed-
to level of foreign trade prices. A system of incentives aimed at increasing this
profit could be built either by recording it in indicators of producer financial ac-
tivity as additional profit or by dividing it between production and foreign trade
as a function of their actual contribution to the formation of that protit.
Things are somewhat different with regard to imports. It seems that imported items
whose prices influence producer current outlays (parts, subassemblies and various
kinds of elements), as well as items with no centralized consumers (electric motors,
for example), must, as is presently the case, reach the domestic consumer at whole-
sale prices set on the basis of price levels.and relationships for analogous output
produced domestically. Transferring the above-indicated output at its import cost
, would create unstable conditions for running industrial enterprise cost accounting
and a multiplicity of prices for analogous items.
Organizing economic ties ber,ween industry and foreign trade on the basis of linking
export revenues to "losses" generated when transferring an imported item to a domes-
tic consumer at wholesale prices set below foreign trade prices seems to be the most
promising. This would, in turn, lead to a locking of the results of branch ministry
- exports to imports to meet its own needs, would facilitate the development of intra-
branch cooperation, and would remove the probleta of imports "subsidizing."
Another method of generating unified material interest on the part of industry and
foreign trade would be to establish special normative calculation coefficients for
individual branch ministries, defining them as the ratio of export receipts to ex-
penditures on manufacturing export output. Selling output with an above-norm co-
eff icient would yield additional profit, which would be shared beCween industry and
foreign trade as a f.unction of the degree of their direct participation in obtain-
ing it. The reverse situation would lead to a distribution of losses.
7
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2407/02109: CIA-RDP82-00854R000400080010-8
FOR OFFICIAL USE ONLY
Of course, other methods of organizing cost accaunting in foreign economic ties are
also possible, such as ones based on determining the calcula~ed and actual impacts
of implementing foreign economic cooperation measures, subsequentlq linking the eco-
nomic results of industrial and foreign trade association activity with the value ob-
tained. However, it seems certain that this measure, along ~aith others in this ~rea,
would facilitate the creation of real prerequisites for effecting effective interac-
tion between the production and foreign economic spheres, developing foreign economic
ties in our country and strengthening its compreheneive interaction with other so-
cialist states in the economic integration process.
COPYRIGHT: Izdatel'stvo "Ekonomika," "Planovoye khozyaystvo", 1981
1b052
CSO: 1825/06
8
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2407/02/09: CIA-RDP82-00850R000400480010-8
F~R OFFICIAL USE ONLY
TRADE WITH LDC'S
BOOK ON CII~IA COOPERATION WITH SOCIALIST-ORIENTID DEVELOPING STATES
Moscow STRANY SEV I RAZVIVAYUSHCHIYESYA GOSUDARSTVA SOTSIALISTICHESKOY ORIYENTATSII
in Russian 1980 (signed to press 27 Oct 80) pp 2-5, 143-153, 177-178
[Annotation, introduction, portion of chapter 3 dealing with Afghanistan and tables
4 and 5 from the book "CF.MA Countries and Developing States With A Socialist Orien-
tation" by Natal'ya Aleksandrovna Ushakova, USSR Academy of Sciences'~Institute of
Economics of the World Socialist System, Izdatel'stvo "Nauka", 4450 copies, 182
pages]
[ExCerpts] Annotation. This monoQraph illuminates CE.*ZA-country economic cooneration
with developing states which have chosen a path of noncapitalist developmemt; it ex-
amines the basic directions and forms of economic ties between the USSR and other
CEMA member-nations and countries of a socialist orientation and possible ways of
increasing the effectiveness and mutual advantage of this cooperation.
Introduction. Over the past two decades, the socialist orientation of the liherated
states has become an historical reality and an integral part of the world revolu-
tionary process, and cou~ntries which have chosen this new form of progressive social
development are the advance detachment of the modern national-liberat:ton movement"
(1) [rootnotes are consolidated at the end of this report.]
The group of countries of socialist orientation which have rejected capitalism as a
system and which are carrying out fundamental socio~conomic transformations which
are creating the prerequisites for a possible transition to socialism, wh3ch are
implementing an anti-imperialist policy of peace, democracy and social progress,
includes more than two dozen states in the developing world, and their number is
constantly growing. Profound socioeconomic transformations have long since been
carried out in such countries as the Algerian People's Democratic Republic, Social-
ist Republic of the Union of Burma, Guinea Republic, People's Democratic Republic
of Yemen, People's Republic of the Congo, Syrian Arab Republic and United Republic
of Tanzania. In a number of countries, progressive transformations along a line of
socialist orientation began only recently the People's Republic of Angola, So-
cialist Ethiopia, Democratic Republic of Madagascar, People's Republic of Mozambi-
que and others. Afghanistan is one of the youngest countries of socialist orienta-
tion.
The emergence of a whol.e series of new states onto the path of noncapitalist de-
velopment in recent years and the deepening social content of revolutionary-demo-
cratic transformations in such countries as Ethiopia, Mozambique and others testify
to quantitative and qualitative development of the process of socialist orientation.
_ 9
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-40854R040400080010-8
FOR OFFICIAL USE ONLY
The effectiveness of the socioeconomic transformations in these countries and in
their political course makes a socialist orientation increasingly attractive to the
liberated states.
At the same time, the experience of such states as Ghana, Mali, Egypt and Somalia
demonstrates that, given an overall cansistent character of progress, fluctuations,
deviations and even a retrear. from noncapita].ist development are possible in indivi-
dual countries. Soviet scientist R. A. U1'yazovskiy links this possibility to the
specific contradictory nature of the noncapitalist path under present conditions,
which is caused by the "class-political instability of petty-bourgeois democracy...,
by pressure on it by the major bourgeois and neocolonialist strata..., by the exten-
sive use of private entrepreneurial activitq and foreign capital"; by retention of
. a strong dependence on the world capitalist market, by the subversiva activity of
foreign and local reaction which has not been promptly repulsed; by the absence of
a strong vanguard party and by sub3ective mistakes by the leadership (2). However,
it must be noted that even in these countries, the sociopolitical legacy of the re-
volutionary democrats reveals considerable durability, testifying to the vitality
of the tendencies towards noncapitalist development. "The path of freedom fighters
is not easy," said L. I. Brezhnev. "We need persistent labor to create the founda-
tions of a public economy needed for socialism. Bitter skirmishes with exploiter
elements and their.foreign patrons are unavoidable. They sometimes lead to zig-
zags in the policies of young states and sometimes even cause the movement to re-
gress. But the general di:�ection of development is indisputable" (3).
The rise and establishment of a socialist orientation is a new phenomenon in the de-
velopment of the national-liberation movement, one with important significance not
only for the destinies of the liberated states, but for the world revolutionary pro-
- cess. The nature of the progressive socioeconomic transformations in these coun-
tries a:~d the concentration of power in the hands of vanguard-type revolutionary-
democratic parties enables us to view eountries of socialist orientation now as a
real reserve.for expanding the zone of socialism, for estab lishing socialist produc-
tion relations in new geographic regions of the globe. Therefore, unswervingly ad-
hering to the principle of naninterference in internal affairs and peaceful coexis-
tence, the USSR and other countries of socialism at the same time consider it their
international duty to do everything possible to broaden comprehensive fraternal as-
sistance to states which have chosen a path of noncapitalist development. "As
- everywhere else, in the developing countries we are on the side of the forces of
progress, democracy and national independence ar{d treat them as our friends and
comrades in arms," said L. I. Brezhnev at the 25th CPSU Congress (4).
The growing influence of the world socialist system and its transformation into a
decisive factor in developing contemporary society make it possible, given appro-
priate internal prerequisites, for the liberated states to choose a noncapitalist
path of development. At present, cooperation with socialist countries is becoming
one of the most important external factors in deepening progressive revolutionary-
democratic transformations in the liberated states, in strengthening their socialist
orientation and attaching a stable, irreversible character to it in order that these
countries will in the future be able to change over to building the foundations of
a socialist society.
Cooperation with socialist countries can perform t~is role most successfully when
it is of a comprehensive riature, by turning iC into a un~f ied system of broad and
10
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-40854R040400080010-8
FOR OFFICIAL USE ONLY
- diverse mutually advantageous trade, economic, scientific-technical, party-political,
defense and cultural relations developing among the partner countries on a long-term
basis. The effort to harmonize relations with states of a socialist orientation and
to make them comprehensive in nature which has been observed in CEMA countries in
recent years is manifested in the fact that cooperation is beginning to encompass
the most diverse areas of eeonomic and superstructure relations and in the fact that
cooperation agreements are increasingly being concluded not only at the intergovern-
mental level, but also at the level of individual ministries, departments, party and
state institutions.
Change in the foreign-policy situation in the world and the establishmznt of pro-
gressive principles and norms in international relations, which has become possible
thanks to the rise and consolidation of the world socialist system, have permitted
the revolutionary-demecratic forces of the developing countries to effect progres-
sive socioeconomic transformations independently in the interests of the broad masses
of people. Soviet scientist K. N. Brutents writes: "Whereas the decisive role in
the entire revolutionary process, meaning in the fates of the liberation forces of
the world as a whole as well, belongs to the socialist system, the national libera-
tion forces are called u~on to play the decisive role in transforming society at Che
level of each country" It follows from this (and this has been confirmed by
experience) that a particular developing country can choose a path of socialist or-
ientation and move along it, up to certain limits, while retaining basic economic
and cultural, as well as quite significant political and idealogical, ties with the
world capitalist system. But successful completion of the process is possible only
with the gradual reorientation of the primary ties of the corresp~nding developing
country towards the world of socialism. Economic cooperation, individual aspects of
which are examined in this work, will play an increasingly important role in the sys-
tem of ties at the present stage.
Chapter 3. Problems of CEMA-Country Cooperation With Individual States of Socialist
Orientation and Ways of Zncreasing Tts Effectiveness ~
Democratic Republic: of Afghanistan
The revolution of April 1978 sharply altered the development path of this ancient
country. The People's Democratic Psrty of Afghanistan, which led the revolution,
has systematically implemented a policy of noncapitalist transformations, of build-
ing a society without exploitation and oppression. CEMA cauntries, and foremost the
Soviet Union, its neighbor to the North, have rendered a great deal of assistance to
= this, one of the youngest states to have chosen a noncapitalist path of development,
in resolving the very important tasks of the April revolution, which tasks were for-
mulated ir~ the 9 May 1978 government declaration on "Basic Directions of the Revolu-
tionary Tasks of the Government of the Democratic Republic of Afghanistan" a de-
mocratic land reform in the interests of the working peasantry and with their active
participation, eliminating old social relations, democratizing public life, an in-
dustrialization program, strengthening the stat~ sector of the ecanomy, raising the
- standard of living of the populace, eliminating unemployment, eliminating the in-
fluence of imperialism and neocolonialism in the economy, and ~o Qn.
The Soviet Union and Af.ghanistan are linked by a traditional friendship and good-
neighbor relations whose foundations were laid by V. T. Lenin and which date from
the proc?amation of an independent Afghan state in Febr.uary 1919. After World War
11
FOR OFF[C[AL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040400080010-8
FOR OFFICIAL USE ONLY
II, these relations continued to grow. The Soviet Union and other CEMA countries
were among the mainstays of Afghanistan foreign economic ties. Some 60-65 percent
of all the foreign aid received by Afghanistan comes from these countries, foremost
from the USSR (1). The Soviet Union acc~ounts for approximately 30 percent of a11
Afghanistan foreign trade turnover (2). Among the other socialist states, the
Czechoslovak SSR and Poland have the most well-developed relations with the DRA
[Democratic Republic of AfghanistanJ, bLt the scale of their cooperation with this
country has thus far been small. After the April revolution, Bulgaria increased
its ties with the DRA. In 1978, trade turnover volume between Bulgaria and Afghan-
istan increased approximately 10-fnld as compared with preceding years (3).
The fact that the USSR and Afghanistan border each other, which has created oppor-
tunities for a considerable reduction in transport expenditures, the ~oint develop-
ment of minerals and the construction of individual enterprises and industrial and
agricultural territorial-production complexes oriented towards meeting the needs of
the partner countries in border regions, the ~oint use of water and energy resources
of boundary rivers and the extensive implementation of joint measures to protect the
environment, combat agricultural pests and develop border trade, and so forth, has
done much to determine the specifics of cooperation between the two countries and
its structure: Soviet-Afghani cooperation is distinguished by dynamism and stabil-
ity. It is especially important to stress the effort by the partner countries to
. shift economic relations onto a long-term basis, which has been increasingly mani-
fest in recene years.
Soviet-Afghani economic relations are regulated by a 10-12 year economic and techni-
cal cooperation agreement concluded in February 1975 and a 12-year Soviet-Afghani
_ economic cooperation development agreement of 14 April 1977 on whose basis a number
~ of agreements and contracts have been concluded on specific projects. The April 1978
revolution laid the foundation for a qualitatively new stage in the 60-year history
of Sovie~-Afghani relations, which has found expression in the 20-year Agreement on
Friendship, Good-Neighborliness and Cooperation Between the Soviet Union and the De-
mocratic Republic of Afghanistan of 5 December 1978
Economic and technical cooperation between the USSR and other socialist countries
and Afghanistan is broad and diverse and is aimed at helping shape a national eco-
nomic complex based on mastering and using the rich raw material resources of the
country as a base for creating national industry and as a stable source of foreign
exchange receipts for the purpose of economic development, for increasing agricul-
tural production with a view towards raising the standard of living of broad sCrata
- of rhe population and expanding the country's export potential, for creating an ap-
propriate infrastructure for industry and agriculture. The national economic agro-
- industrial complex beginning to be created in Afghanistan in cooperation with CEMA
countries is integrated in nature and is highly complementary with the world so-
cialist economy.
Some 147 projects, upwards of 70 of which were already in operation at the end of
1979, have been built or are being built in Afghanistan with USSR assistance
Assistance in geological surveying work and in utilizing Afghanistan's natural re-
sources, which have heretofore been imcompletely stu.died, occupies a central place
in this cooperation. Considerable prospecting for gas, petroleum, copper, barite
and other minerals has been done with the assistance of Soviet geologists. Total
12
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040400080010-8
FOR OFFICIAL USE ONLY
natural gas reserves at the Hoja-Gugerdag deposit, prospected by Soviet specialists,
are estimated to be 50 billion cubic meters. . In October 1963, an agreement was con-
cluded on Soviet assistance in setting up the extraction and use of natural gas from
deposits of the northern region of Afghanistan on a compensatory basis. Under this
~ agreement, the Soviet Union helped provide the deposit with worker settlements, de-
veloped Sheber~han(annual production of up to three billion cubic met~rs of gas) and
helped build a gas pipeline to the USSR border (101 km, throughput capacity of four
billion cubic meters per year) and to Mazar-e Sharif (6).
By early 1980, the USSR has received 29.4 billion cubic meters cf natural gas at
prices set based on worZd market prices in re~ayment of loans made (since 1975, ex-
- port prices of rlfghani gas have risen 10-fold in connection with world price move-
ments) Natural gas exports to the USSR are a stable source of considerable re-
venue for Afghanistan. At the same time, purchases of Afghani gas enable the USSR to
improve gas supplies to a number of Central Asian regions.
The next step in developing cooperation among the two countries in gas industry on
a compensatory basis was the construction, with USSR assistance, of the Jarkuduk
gasfield in northern Afghanistan at a deposit also opened by Soviet geologists. Its
capacity is up to two billion cubic meters of gas per year, intended basically for
export to the Soviet Union. A complex to remove sulfur from the gas has been built
- here (e). The Juminskoye and other natural gas deposits which, in the opinion of
Soviet economists V. V. Yefanov and T. V. Teodorovich, could also be projects for
_ cooperation on a compensatory basis (9), have also been prospected with USSR help.
_ In 1977, So~~iet geologist.s discovered petXOleum in northern Afghanistan at a depth
of 970 meters. Prior to that~ no petroleum deposits suitable for commercial exploi-
tation had been discovered in the country (10). In 1979, an agreement was signed
with the Soviet Union on assistance in developing and outfitting petroleum deposits,
as well as on building an oil refinery witti a capacity of up to 500,000 tnns an-
nually (11). A new branch of the Afghani economy, petroleum industry, was thus
created in cooperation with the USSR.
Soviet organizations have prospected for copper in the Aynak deposit (Logar Province)
which, according to preliminary estimates, is among the largest in the world (1`).
iJnder a 1 March 1979 agreement, the USSR is helping Afg~~anistan install a copper
- enrichment combine, acting as the general contractor. Credit granted for building
the combine will be paid back by deliveries of copper concentrate or copper to the
USSR, as well as by deliveries of output from other cooper~;rive Soviet-Afghani fa-
cilities (13 ) .
Soviet specialists have also uncovered deposites of barite, gold, flux raw material.
and iron ore and have re-evaluated the lazurite deposit at Sar-e Sing, which has per-
mitted an increase in the extraction and export of this raw material (1`'). Cooper-
ation in geological surveying far solid minerals continues.
A great deal of geological work involving solid minerals has been done with the help
of the Czechoslovak SSR, which has also helped build the coal mine at Pol-e Khomri,
with a capaciCy of 600,000 tons of coal per year (15).
Polish specialists are working under a UN contract at Kabul Institute of Cartography,
created in 1973. They are consulting with Afghani specialists in the area of geode-
sic and gravimetric measurements, aerial photography, cartographic work, compiling
13
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040400080010-8
FOR OFFICIAL USE ONLY
cadasters, and so on. In 1979, they trained more than 400 specialists, including
several Afghani associates at the institute, who were sent to Poland for on-the-job
training. Polish specialists have drawn up a datailed atlas of Afghanistan within
the bilateral Polish-Afghani cooperation framework (16).
Assistance in prespecting for and utilizing natural resources is currently one of
the most promising lines of CEMA-country cooperation with Afghanistan. It was noted
at the first meeting of the permanent, ~oint intergovernmental commission on econo-
mic cooperation between the USSR and the DRA in the fall of 1979 that geological
. surveying and prospecting would be the main lines of cooperation between these coun-
tries in the years ahead. Particular attention will be paid to searching for gas,
petroleum and solid minerals, to creating new production capacities for extracting
and processing them and expanding existing ones (17).
Assistance in prospecting for and utilizing natural resources which is being done
for a broad range of interrelated branches and along a number of lines will lead to
significant expansion and diversification of Afghanistan's expoit opportunities and
is laying the foundation for developing a modern multibranch induserial complex.
Cooperation in agriculture, the main branch of the Afghani economy, has other tradi-
tions. Assistance in developing agricultural production is the seeond major "block"
in the system of CEMA-country foreign economic ties with Afghanistan. It includes
both a broad program of irrigation construction and assistance in utilizing new land,
in creating state agricultural enterprises on it. The largest Soviet-Afghani agri-
cultural project is the Jalalabad irrigation complex, which permits the irrigation
- of 24,000 ha (lg). This complex plays an important role in the economic and social
development of the country's eastern regions. ~ao state farms have been created on
irrigated land, Gaziabad (19G9) and Khadda (1970); they are thus far the only multi-
branch agricultural enterprises in the country witr a high level of agricultural job
mechanization. The farms are specialized for growing citrus, olives, wheat, barley
and other crops. Moreover, mechanized stockraising farms supplying Jalalabad and
Kabul with milk and meat have been in operation here for sPVeral years now. In the
mid-1970's, more than 9,000 people were employed at various facilities of the com-
_ plex (19).
These farms became a school for diaseminating advanced experience; they render the
peasants of outlying villages much assistance, supplying them with purebred beef and
plantings and conducting consultations with skilled specialists. The fact that cit-
rus production has increased more than three-fol.d and olive 4.4-fold over the past
five years testifies to the efficiency of operation of these enterprises. Their out-
put is not only for domestic consumption, but is also exported, primarily to the USSR.
- In 1977, the Soviet Union imported 799 tons of olives fram Afghanistan, and in 1978
1,050 tons (20). Construction of a packing plant in Jalalabad was begun in 1978
to process olives produced by the state farms. In the course of operating various
facilities of the complex, Soviet specialists have trained m~re than 13,000 agricul-
tural workers, construction workers and machine operators (21). Creation of the com-
plex has spurred activity throughout the Jalalabad Valley. After its construction,
~ tra~e, local indu~try and crafts began developing here and tlie population grew sig-
nificantly. This project demonstrates graphically the advantages of a comprehensive
approach to cooperation in developing agriculture.
In 1977, "Sel'khozpromeksport" V/0 finished building another large irrigation sys-
tem, the Sarde on Jilga River; its construction will make it possible to irrigate
14
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-40854R040400080010-8
FOR OFF(CIAL USE ONLY
upwards of 17,000 ha of new land in Ghazni Province (22). Soviet organizati.ons have
also worked out technical plans for a dam and main canal on Kokcha River and are plan-
ning the construction of "Kelagay" hydroelectric project on Surkhab (Qonduz) River,
the "Khosh-Tepe" canal and pump dam, ~nd a dam and reservoir on Balkhab River in the
- vicinity of Chashmayi~-Shafo (23).
The Soviet Union renders Afghanistan systematic assistance in combatting locusts and
infectious and parasitic diseases of livestock and poultry. With USSR participation,
seven veterinary clinics and four veterinary laboratories dealin~ with both treatment
and prevention have been created in Afghanistan (24). An agreement on Soviet assist-
ance to Afghanistan in creating machinery-tractory stationa was signed in 1979 ~2s).
The fnundations are being laid for comprehensive cooperation with Bulgaria in agri-
- cultural production. An agreement on cooperation in agriculture, food industry and
reclamation was signed by the two countries in August I979 (26).
- Good results have been achieved in industrial.cooperation. The CEMA countries are
long-standing partners with Afghanistan in developing traditional branches of indus-
try: food, textile and building materials. The Czechoslovak SSR has supplied modern
equipment for modernizing a packing plant in Kabul, a creamery in Mazar-e Sharif and
a cannery in Qandahar. Czechoslovak industrial enterprises have trained skilled
workers for these branches (27). Cooperation with the Czechoslovak SSR in develop-
ing food industry continued. Soviet organizations are also rendering a great deal
of assistance. In 1957, Afghanistan's first grain combine, including a 20,000-ton
elevztor, a mill to grind 60 tons of grain per day and a bakery with a capacity of
70 tons of bread and rolls per day, was built in Kabul with USSR assistance. An ele-
vator was built in Pol-e Khomri, as were a number of other projects (28). The Kabul
grain combine has been expanded with the assistance of Soviet organizations, and in
1979, construction of a mill in Pol-e Khomri and a bakery, mill and eleva~or in
P4azar-e Sharif was begun, also with Soviet assistance (2~). Cooperation with Bul-
garia in food industry is planned.
Several cotton gins and textile enterprises have been created in Afghanistan with the
assistance of CEMA countries, a majority of which are now being modernized.
The expanding cooperation in building materials production is helping meet Afghani-
stan's top-priority needs. ~tao cement plants have been built with Czechoslovak SSR
assistance, one in Jabal os S~ra~ (100 tons per day) and one 3n Pol-e Khomri (400
tons per day) (30). The first cooperative Soviet-Afghani project built in the post-
war years was an asphalt-concrete plant in Kabul, which began operating in 1955.
The Kabul house-building combine, the one enterprise in the country capable of large-
panel construction, was built with USSR assistance and has been in operation since
1965. More than 3,000 apartments, 17 schools, stores, kindergartens, movie theaters
and academic institutions have already been built in the Afghani capital using parts
and materials manufactured by this combine. Soviet organizations have also renovated
the house-building combine, which has permitted a considerable increase in the amount
of output produced (31). The combine, with its more than 2,000 Afghani workers and
employees, has become not ~n?y a forge for training skilled personnel, but also a
school for their. development as citizens. Combine workers are active participants
in the movement for voluntary labor outside of working hours. Agreement in prin-
ciple has been reached with Bulgaria on supplying Afghanistan with six brick plants
and one house-building combine (32).
15
FQR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
F'OR l?~FF[CTAL USE ONLY
Along with cooperation in traditional branches, assistance is being rendered in
creating modern, new branches of processing indus~ry. The first automotive repa3.r
enterprise in Afghanistan, Jangalak Service and Machine Shop in Kabul, was created
with USSR participation. The shop can make nearly 1,400 repairs a year. Moreover,
it produces pumps, plow~, cultivators and other agricultural implements (33~.
Soon, the combine plan~ on switching from vehicle maintenance to assembling trucks
from parts supplied from the Soviet Union and some manufactured localiy ~34~. There
are also two vehicle repair shops organized with USSR assistance, one in Pol-e Khomri
and one in Herat.
The first-born of Afghani chemistry, the nitrogen fertilizers plant in Mazar-e Sharif,
built to produce 105,000 tons of carbamide a year, is one of the largest cooperative
Soviet-Afghani pro~ects (35~. Start-up of this plant in 1974 was of enormous import-
ance to developing the country's agriculture, which was suffering from a shortage of
chemical fertilizers. In the late 1970's, the demand for them was estimated to be
200,000 tons, and approximately 25 percent of it was met exclusively through imports
prior to the start-up of the plant ~36~. Construction was on a compensatory basis.
A portion of the carbamide produced by the plant is supplied to the USSR to pay off
Sovi~t loans. The USSR imported upwards of 25,000 tons of granular nitrogen ferti-
lizers in 1977-1978 (37). The Mazar-e Sharif plant consumes approximately 200 mil-
lion cubic meters of gas each year; it is produced near Sheberghan and delivered by
pipeline. Along with fertilizers for agriculture, the plant supplies vario+as enter-
prises with its own "by-product," liquid ammonia, oxygen in tanks and dry ice. The
ammonia, for example, will be used extensively at the copper-smelting plant being
built in Aynak. The plant thermal electric power plant, with a capacity of 36,000
kilowats, will supply electricity to Balkh and Ma2ar-e Sharif, and after construc-
tion of the fourth turbine is finished, it will also supply other cities of the nor-
thern provinces with electricity. The enterprise employs about S,OO~J people (38).
Thus, the Mazar-e Sharif plant is a true center of development for the country's
northern provinces, a nucleus of the industrial complex based on petroleum and gas
production and grocessing being formed here, one which will influence not only ~he
system af domestic economic ties, but also the shape of the foreign trade structure.
The fact that the cost of cooperative Soviet-Afghani pro~ect autput was a�.ready
about six billion aighani, nearly 40 percent uf the total cost of Afghanistan's in-
dustrial output, even back in ;978 testifies to the results of this industrial coop-
eration. They account for upwards of 60 percent of all industrial productior~ in the
country's state sector ~39~.
In carrying out the industrial cooperation program, the partner countries try to en-
sure a balanced combination of assistance in developing the traditional branches of
processing industry, which serve basically to meet domestic needs, and assistance in
developing modern new branches, primarily in extractive industry, which are oriented
in considerable measure towards exports. Such an approach facilitates the formation
of an efficient national economic complex based on full use of domestic resources
and active participation in the international division of labor.
The specific factor of geographic proximity has been evident in the significant
scope of USSR-Afghanistan cooperation in the area of infrastructure, whose proportion
of total economic and technical assistance is significantly higher than in USSR rela-
tions with other countries of noncapitalist development. Back in 1924-1927, the USSR
16
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFiC1AL USE ONLY
helped build a telegraph-telephone line connecting i~ushka to Herat to Quandahar to
Kabul and Kabul to Mazar-e Sharif (40). In Afghanistan, which has no railroads or
outlets to the sea, the network of roads has been built and expanded with USSR as-
sistance and the system of vehicle maintenance and service has likewise been set up.
By the mi_d-1970's, there were 2,500 km of hard-surface roads, 1,400 lmn (about 60 per-
cent) of which had been built with USSR assistance. Among them is the 679-km Kushka
to Herat to Quandahar road, which has become the main arterq linking the economically
_ important regions of Afghanistan (41).
The Kabul - Shir Khan route (about 400 km) connecting the Afghani capital with a bor-
der port on Pyandzh River serves Soviet-�Afghani trade. Cutting tunnels through the
~ Hindu Kush reduced by a third the length of the rnute to the Soviet border and, cor-
respondingly, shipping time, which lowers the cost~. of delivering freight (42). So-
viet organizations also have built about 10 highway bridges across rivers and moun-
tain ravines.
With a view towards expanding cooperation in shigging export-import freight and im-
~ proving its effectiveness, a joint Soviet-Afghani transport-forwarding ~oint stock
company, the AFSOTR, was created in 1976. Some 51 percent of its capital belongs to
Afghani organizations and 49 percent to the Soviet Union (43). The company also
handles tr.ansit shipments.
A considerable amount of road and transport equipment is supplied from the Czechoslo-
vak SSR. Bulgaria has been helping develop urban transport sinee 1978. In 1978-
1979, Bulgaria's "Balkankarimpeks" has supplied the DRA with 300 modern Chavda~ G-5
buses, which has significantly improved Kabul city transport, especially on lines
Iinking worker quarters with industrial zones ~44~.
Soviet organizations have built three of Afghanistan's four international-class air-
= ports (45). The port of Shir Khan, on a western stretch of the Amu Dar'ya, is a fo-
cus of Soviet-Afghani cooperation as the "river gates" of Afghanistan. In 1979, port
freight turnover was approximately 400,000 tons, about 35 percent of the total freight
flow between the USSR and Afghanistan. Soviet organizations are building a bridge
across th~ Amu Dar'ya which will have a capacity of 1.2 million tons of freight per
year, permitting an easing of the load on the port and improved Soviet~-Afghani trade
services ~46~. In cooperation with the USSR, developffient and improvement of Afghani-
stan's tran~port network facilitates economic contacts between the countries, ac-
celerates freight flows in both directions and activates trade and economic ties.
The USSR renders Afghanistan considerable assistance in developing power engineering.
Three hydroelectric power plants with a total capacity of 156,000 kW, including "Na-
glu" GES on Kabul River (capacity 100,000 kW), have been built with its hel~ These
three power plants account for SO percent of the country's power capacity The
development of electric power engineering in border regions creates a reliable base
= for their agro-industrial utilization in the interesta of the partner countries.
A 36,000-kW thermal electric power plant attacited to the nitrogen fertilizers plant
and the power transmis~ion line network has been built and continues to expand with
USSR vssistance. In 1979, for example, Soviet organizations led work on construction
of the Naglu -Jalalabad GES power transmission line ~48~. Diesel electric power
plants are supplied from Czechoslovakia (''9).
- 17
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFIC[AL USE ONLY
nroad assistance in training skilled workers and specialists facilitates successful
cooperation in various branches of the national economy. The basic form of skilled
worker training in Afghanistan is training them directly at construction sites. By
1977, more than 70,000 skilled workers had already been trained by this method at
various cooperative Soviet-Afghani projects (50). About 2,000 students are being
trained in construction, geology, chemical technology and other departments of Ka.buJ.
Polytechnical Institute, which was created 11 years ago with the technical assist-
ance of the USSR (51). Specialists with a secondary technical education ar~ being
trained at a mining-petroleum tekhnikum and an automotive tekhnikum. More than
1,000 people are studying at the automotive tekhnikum. Beginning in 1975, the tekh-
- nikum has had an evening dicision, which teaches primarily plant workers (52). Tekh~
- nikym graduates mechanics, electricians, technologists work both at the automo-
tive repair plant and at many other industrial enterprises of Afg?zanistan.
An increasing number of students from the DRA are traveling to CF~tA countries to
study at higher and secondary academic institutions. Since 1 September 1979, some
1,500 young men and wumen chosen from among the best graduates of Afghani lycees
have enrolled in VUZ's of Moscow, Leningrad, Kiev, Tashkent and other cities of the
Soviet Union. They are being train~ed in 108 specialties. After returning to their
homeland, the young Afghani specialists will work at cooperative Soviet-Afghani pro-
jects (53). An Afghani-Bulgarian agreement has been signed on sending 2,000 young
Afghanis to study in Bulgaria in 1979 ~54~.
CEMA-country economic cooperation with Afghanistan is equal and mutually advantage-
ous in nature. The extensive use of effective new forms of assistance such as com-
pensatory agreements and the general contract facilitates in~reasing that mutual ad-
vantage. The partner counCries are trying to continue expanding the c~opera.tion,
shifting ties to a long-term basis and strengthening elements of planning in them.
In particular, an agreement on cooperation in the area of planning was signed. in
June 1979 between the USSR State Planning Committee and the Afghanistar. Ministry of
- Planning (55). Strengthening planning elements in the economic ties of the partner
~ countries testifies t~ a continuing deepening of the division of l::oor between Af-
- ghanistan and countries of the wor.ld socialisC community. An Af~nanistan delegation
participated in the work of the 33rd and 34th CEMA Sessions. ~t the request of the
Afghanistan government, the 34th CEMA Session adopted a r~soiution on DRA participa-
_ tion in CEMA actfvity as an observer in 1980.
[Tables 4 and 5 of Chapter 3 are on the following two pag,es.]
18
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004400080010-8
FOR OFFICIAL USE ONLY
�
G ~
N ~
U ~
N
~ ~ .
a
~ ~ M
- ~,-I p. 1 1 1 I I ~ I I ~ ~ N
w O I I I 1 I ~ I 1 ~7 ~
H ~
~ ~
N
O~ W
~ ~
~ w
r~ ~ lll
~ N~ I I t I ~ I I I I � N
O 1 I I I OO I 1 I I ~ ~O~
H ~ G~J R+' ~
~
ro ,G ~A N
y p ~ 1 I I O I 1 1 1 G ~~O
rl O ~ ~ ~ N
O U
_ cA ~~rl ~
td tIl
~rl p I ^ I I I ~ ~ I M 3 O N
~ ~ I ~ 1 1 I N N I O N w
~ G! J+ M
V 1~ ~ri N
~ O ^^S y w
W O 1 I I I I O 1 I I ~ N O
O ~ I I I I I O 1 I I ~ U N
m d fA ki
41 ~ ~ ~
~ ~ M O~
c0 p a~
J.+ �r~l ~
~o o ~o ao _ ~ a
o 0o i i i i i ~ o o ~ v~ a
~ ~ ~ .
a ~ o� o~
~ o ~r, ~o rn +.i
a~i ~ : . ~ M ~ ~ ~ ~ ~ ~ 3
U CA
� w ~
~ ~ N
4-~ ~ I 1 ~ I I I I 1 I O! t/~ ~
N ~ I I o I I 1 I I 1 ~ N.
L e
~
~ ~ 0
p ~ q ir1 I~ f+'1 00 M .~I b~ 'l7
~ ~ I ~ O I v1 O M I U1 S~+ ~
P4 00 tA .7 N N ~ ~ x
cn d
~ o t~.{O
3+
o I 3 vi p ~ ~o t ~
a cd u~ .o co a ~ o
s~ u~ ~ co i.-, o o w ,c ~o
~ w ro ~ ~ o ~o u ~n ~
~ v' O r-1 J~ 'C OJ tA N O 'd 00 N a.+
u ~ R1 N O ^ L ~ LL O ri 'Li 'b N ~ ~ ct1
u a m ~ ~n ~f cd w co o a~ u~ ~ D~
~ ~ ~ G a~ a q oo ~ ~ o ~n b ~ = cn
o o cv a- a~ cn ~ o w w ~ o .c~ a~
L~ S~+ Ul F+ rl rl ri N b0 i~ Gl ~e-1 C3 Gl W iJ O ~rl .C
C!~ b0 Cl Q O ~ cif cd �rl F+ L~ tA ~.1 Gl ^J U 00
~ G p. �rl U.~-I rl cSt ~0 tA cd cJ cd 1.! F3
- u~ b a q v v~ p~ ~n w s~ ~n z o
b ~ ~ ~ ~ a ~ ~ u ~ b b ~ a~ ~
~ o�~ u a~ a~ ~ v~+ Y+ ~0 3 o u 3 0 0 ~ ~
~~o r~~ ~4-�1+ u~a~ aab `r~a w~ ~ ci p
o ,x
[-~-i u~ N ch ~7 V1 1~ 00 O~ ~z-+ H
19
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400084414-8
F.~R OFI~ICIAL USE ONLY
a~ ~
~ ~
v rn
U
c! cti Q
a r~ ~ � ~ cv 'i
.
,~-i ui � I � � i � o ~ b ~
w yj�',J 00 r1 ~ lV
ap W H ~
n n
O~ ~ ~t
tC 00 N
OJ O O r+ M I
ti~-I ~ O M I � I I ~ ^ ~ 'd F+ ~t
7 tY1 ~t ~ � I ( ~ N CJ ~ O N
o ~ ~ kr
RS ~ ~ 1 I I I I ~ ~ ~ ~ cn N
~ ~ ~ I I I 1 I N .t ~7 ~ .'7
Ol [q ~ u ul
�r1 M
S-~ ~A .~G N
O rl ~7 � I � I ~t N O '`3 ~ N
O 1 I
tA 00 N � I � � 1 N c+1 N ~ O c~'1
�rl G'+ CO r'1 w ~ N
'-i Q~i 'd p1
~ i1 r~
fn 01 ~O i ~!1 G~ ! O~ ?~1 N ~ N N
N O~ M 1 N1 C~ 1 O O o0 i+ Gl ~
w pp ~ N 1~ .C O
O r-1 ~I M N
UJ d 'LS t~ I
~ cU 1~ .T ~ I N I M c+1 ~ rl O~
1r ,-1 � 1 I � � a~
L~ ~7 Q~ O ~ 1f1 ~ � C O ~ y~j LL
o cn v' ~ cn a
U ~
n
r~l a~J o0 I~ I r~ I I I~ N O~ a~ QO O~
~ N u1 c*1 ! s'*i 1 I ~1 Q O cU C~ ~
F+ y+ Vl ~ N r-I rl w
a~ 3
~ ~ ~ ~ i i o i i o ~o i.i ~ u�
� ~ o o~ i i ^ i i ~n o ~
m pv ~
~--I ~
O I ~ x
W c0 c0 ~ O~ ~T .-r f~ CO N O ~ p.n
_ a ~ ~ O O O M 00 u'1 ~ O 0~0 ~
V] W Vj 10.~ ,'I,'
~ ~ La O cd ~
W ~ 41 !A r-1 9~ R1
o i 3 ~n .a ~ �o I ~ co u
a ~ ~n a~ .n m G a o D,
~ �rl 1+ .-1 u �rl R1 I r~ o O w Li a~
s~ ~ w ~o o b u .c v~
~ v~ o ~v a~ ~n o v on m~+
l~ Gl ~U G~ ~ ~ 1J e~'~ a ~ p"~ 'L~ T~ Q~ C'+ Gl i.1
u a m 3~ p 3+ m c0 w cd o N tn ,a ~ ca
~ ~ ~ ~ a~ a s~ ~ oo ~ ~ o v~ b ~ p
o o ~v ~ a~ ~n ~ o s~ u-~ w ~ o .n a~ _ v~
t~ H d~+ �r-I '-1 ~-I N 00 u N vi ~ W O rl .G
t/] 00 N Q O ~ t0 cd M p f+ a.+ Ul ~ 1~ Ol ~ U 00 L+
~ ~ a ~ u ~ ~ co on ~ u ca p
�r'1 ~1 'r~ w Ul w 1-1 �1'~ �1'~ 'C CL Gl (A .'7 ln �-1 3~1 UJ '~i O
'U .C 1.~ f.7 r-I N 6+�+ r-1 U t~ "'O 'L1 ~ Gl ~ri i-~
~ri o�~+ u~ ro a~ ~ a~ M+ ~0 3 o u 3 0 0 ~ u~+
~ ~o ~~i.? r~~ E[.~w rac~o a`~aa�v c~a t� ~N ~~i a~i
~ . . . . z ~
H U r+ N M .7 u'1 t~ 00 O~ ~ H
2~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/42/09: CIA-RDP82-40854R040400080010-8
FOR OFFICiAL USE ONLY
r00TNOTES
Introduction:
1. "Materialy XXIV s"yezda KPSS" [Materials of the 24th CPSU Congress], Moscow,
1971, p 194.
2. R. U1'yanovskiy, "On Countries of Socialist Orientation," KOMMUNIST, No 11,
1979, p 123.
3. L. I. Brezhnev, "Great October and Human Progress. Report at the Festive Joint
Meeting of the CPSU Central Committee, USSR Supreme Soviet and RSFSR Supreme So-
viet in the Kremlin Palace of Congresses on 2 November 1977," "Leni.nskim kursom"
[On Len~n's Course], Vol 6, Moscow, 1978, p 591.
4. "Materialy XXV s"yezda KPSS" [Mar.erials of the 25th CPSU Congress], Moscow, 1974,
p 12.
5. K. N. Brutents, "Sovremennyye natsional'no-osvoboditel'nyye revolyutsii (neko-
toryye voprosy teorii)" [Contemporary National Liberation Revolutions (Several
Questions of Theory)], Moscow, 1974, p 548.
Chapter 3: [Section on Democratic Republic of Afghanistan]*
1. A. Davydov and N. Chernyakhovskaya, "Afganistan" [Afghanistan], Moscow, 1973,
p 62.
2. EKONOMICHESKAYA GAZETA, No 16, April 1979, p 21.
_ 3. RABOTNICHESKO DELO, 17 May 1979.
4. PRAVDA, 6 December 1978.
5. PRAVDA, 4 November 1979.
6. PRAVDA, 28 June 1974; IZVESTIYA, 24 May 1967; T. V. Teodorovich and V. V. Yefa-
nov, "Sotrudnichestvo pri sooruzhenii ob"yektov za rubezhom. Iz opyta sovetskikh
organizatsiy" [Cooperation in Installing Facilities Abroad. From the Experience
of Soviet Organizations~, Moscow, 1979, p 75.
7. T. V. Teodorovich and V. V. Yefanov, "Sotrudnichestvo pri...," p 76; EKONOMI-
CHESKAYA GAZETA, No 15, April 1980, p 21.
8. EKONOMICHESKAYA GAZETA, I3o 15, April 1980, p 21; VNESHNYAYA TORGOVLYA, No 6,
1978, p 25.
9. T. V. Teodorovich and V~ V. Yefanov, "Sotrudnichestvo pri...," p 77.
10. BIKI [BYULLETEN' INOSTRAPZNOY KOI~iERCHESKOY INFORMATSII], 4 October 1977.
11. EKONOMICHESKAYA GAZETA, No 15, April 1980, p 21.
12. T. V. Teodorovich and V. V. Yefanov, "Sotrudnichestvo pri...," p 77.
~
- *Original numbering in text was continuous for Chapter 3, that is, (1) _~535~.
21
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007142/09: CIA-RDP82-40854R040400080010-8
FOR OFFICIAL USE ONLY
13. Op. cit., pp 77, 78; PRAVDA, 14 May 1978; BIKI, 12 July 1979.
14. D. Degtyar', "Plodotvornoye sotrudnichestvo" [Fruitful Cooperation], Moscow,
1969, p 36.
15. TRYBUNA LUDU, 2 January 1979.
16. PRA~IDA, 4 November 1979.
17. VNESHNYAYA TORGOVLYA, No 11, 1979, p 31.
18. PRAVDA, 15 February 1975.
19. "Vneshnyaya torgovlya SSSR v 1978 g. Statisticheskiy sbornik" [USSR Foreign
Trade in 1978. Statistical Handbook], Moscow, 1979, p 198.
20. VNESHNYAYA TORGOVLYA, No 11, 1979, p 31.
- 21. D, Degtyat', "Plodotvornoye sotrudnicheatvo," p 32; VNESHNYAYA TORGOVLYA, No
11, 1979, p 31.
22, VNESHNYAYA TORGOVLYA, No 3, 1976, p 24; No 6, 1978, p 24; No 11, 1979, p 31;
AZIYA I AFRIKA SEGODNYA, No 7, 1976, p 31.
23. VNESHNYAYA TORBOGLYA, No 11, 1979, p 31.
24. EKONOMICHESKAYA GAZETA, No 15, April 1980, p 21.
25. RABOTNI('HESKO DELO, 14 August 1979.
26. CHEKHOSLOVATSKAYA VNESHNYAYA TORGOVLYA, No 11/12, 1974, p 18.
27. AZIYA I AFRIKA SEGODNYA, No 8, 1979s p 35.
28. PRAVDA, 9 December 1979.
29. CHEKHOSLOVATSKAYA VNESHNYAYA TORGOVLYA, No 11/12, 1974, p 18; No 4, 1977, p 60.
30. BIKI, 27 May 1976; IZVESTIYA, 17 January 1980.
31. RABOTNICHESKO DELO, 4 January 1979.
' 32. IZVESTIYA, 11 October 1963; BIKI, 14 September 1974, 21 August 1975.
33. PRAVDA, 18 February 1980.
34. AZIYA I AFRIKA SEGODNYA, No 8, 1979, p 35.
35. AZIYA I AFRIKA SEGODNYA, No 7, 1976, p 62.
36. "Vneshnyaya torgovlya SSSR v 1978 g. Statisticheskiy sbornik," p 198.
37. PRAVDA, 17 July 1976, 2 November 1978.
22
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8
FOR OFFICIAL USE ONLY
38. T. V. Teodorovich and V. V. Yefanov, "Sotrudnichestvo pri...," p 74.
39. AZIYA I AFRIKA SEGODNYA, No 8, 1979, p 35.
40. AZIYA I AFRIKA SEGODNYA, No 7, 1973, p 56.
41. G. M. Prokhorov, "Vneshneekonomicheskiye svyazi i. ekonomicheskiy rost sotsial-
isticheskikh stran" [Foreign Economic Ties and Economic Growth of Socialist
- Countries], Moscow, 1972, p 168.
42. PRAVliA, 20 February 1976.
43. RABOTNI~HESKO DELO, 1 November 1978.
44. PRAVDA, 9 December 1975.
45. PRAVDA, 3 April 1980.
46. PRAVDA, 9 February 1975; VNESHNYAYA TORGOVLYA, No 7, 1975, p 17; No 3, 1976,
, p 23; No 6, 1978, p 24.
47. EKONOMICHESKAYA GAZETA, No 15, April 1980, p 21.
48. BIKI, 19 October 1976.
49. ~INESHNYAYA TORGOVLYA, No 7, 1977, p 40; No 2, 1978, pp 21-22.
50. MOSKOVSKIY KOMSOMOLETS, 19 February 1980.
51. PRAVDA, 9 February 1975, 11 June 1979.
52. PRAVDA, 12 August 1979.
~ 53. RABOTNICHESKO DELO, 8 August 1979.
54. PRAVDA, 27 June 1979.
55. PRAVDA, 27 June 1979, 14 July 1980.
- COPYRIGHT: Glavnaya redaictsiya vostochn~oy literatury izdatel'stvo "Nauka", 1980
11052
CSO: 1825/45 END
23
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080010-8