SERIOUS LACK OF FOREIGN EXCHANGE/ INABILITY TO PURCHASE WESTERN TOBACCO/CIGARETTE SALES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R000700980003-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: November 9, 1998
• Sequence Number: 3
• Publication Date: April 1, 1953
• Content Type: REPORT

Approved For Release 1999/09/10 : CIA-RDP83-00423R000700980003-4
25X1A2g
SUBJECT Serious Lack of Foreign Exchange/Inability to Purchase DATE
Western Tobacco/Cigarette Sales
PLACE ACQUIRED
(BY SOURCE)
DATE ACQUIRED
(BY SOURCE)
DATE (OF INFO) Apr 53
25X1A6a
Supplement to:
Responsive to:
contains information affecting the national defense of the
United States, aning of Title 18, Sections 793 and 794+, of
the U.S. Code, as amended. or revelation of its contents
to or receipt by an unauthorized person is pr aw. The reproduc-
tion of this report is prohibited.
X1X6
1. The economic situation in Finland has declined definitely since my last visit one year ago,
and I got the impression everywhere that business was at a standstill. For one thing,
hotel accommodations, which have always been at a premium there, were obtained this year
without difficulty on only 24-hours' notice. Also the shops and restaurants seemed to
be doing only very modest business. The cause of this, I believe, is that Finland has
lost her foreign markets for her standard export items such as wood pulp, and the output
of her new industries created to supply reparations to the USSR have not been able to com-
pete in world markets. In Finland wages are higher than elsewhere in Europe, especially
Scandinavia, which causes the country's exports to demand prices higher than those asked
by competing nations. Consequently, Finland. is short of foreign exchange of any kind,
and the result of the whole situation will be that Finnish economy will of necessity become
more and more closely tied to the USSR. Furthermore, in its efforts to meet the obligations
imposed by the Soviets, the Finnish government was forced to neglect such public works as
highways and railroads. The former are in poor condition, and the rolling stock of the
latter is deplorable. In attempting to rectify this situation the government is utilizing
all its available resources, which is a contributory factor to the scarcity of money for
imports from abroad.
2. An officer in the Finlands Bank remarked to me that Finland was searching the world over
for new markets, especially in the Far East, and was hopeful of doing some exporting to
Indonesia. In this quest, however, Finland will encounter the same difficulties that its
exporters have met with in Europe, namely, the fact that they cannot compete in prices with
countries having lower wage scales. It is possible that prices of such typical commodities
as wood pulp may be reduced sufficiently to enable them to form an entering wedge in new
areas. I inquired whether having the Olympic Games at Helsinki in 1952 had been of any help
to Finland's economy, but was told that in the matter of giving the roTLb1e
'last at
amount of foreign exchange they had been a flop.
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.This repo-1- - ---"-=- USA of CIA and the Intelligence components of State,
Army, Navy, Air and FBI. It is not to e the concurrence of the
originating office through the Assistant Director of the Office of Collec
tion, CIA. RETU
RN TAI CIA
Approved For Release 1999/09/10 : 11fth I
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3. This untoward situation is particularly evident in the tobacco industry. In recent
years, Finnish smokers have shown an increasing preference for US-type cigarettes, and
although the manufacturers have had to purchase large amounts of soft currency flue-cured
tobaccos, such as Rhodesian and Indian, we have sold them an average of 300 thousand pounds
annually. This year our sales will fall below 200 thousand. The only money available is
blocked Finn marks which can be secured for new exports to old markets, or for established
export items to new markets. Finland has always purchased large amounts of Soviet tobacco,
which is made up into Soviet-type cigarettes, smoked generally by the rural population.
Now the manufacturers will be obliged to import larger amounts of Soviet and satellite
tobaccos and the urban population which much prefers US-type blended cigarettes will have
to be satisfied by the inferior black commodity smoked. by the peasants.
4. Amer-Tapakka Company, the only wholly Finnish-owned tobacco firm, which a year ago inaugu-
rated a US-type cigarette, has been doing fairly well in the sales of this brand. Blended
cigarettes form only 15 per cent of the total cigarette sales in Finland, but of this
amount Amer-Tapakka has 70 per cent of the market. The other four cigarette manufacturers,
largely Greek, Swedish and UK-controlled, are becoming somewhat disturbed over the increas-
ing sales of this new firm and its popular cigarette.
Approved For Release 1999/09/10 : CIA-RDP83-00423R000700980003-4