The main achievement of the investments in agriculture and industry that occurred under socialist industrialisation is indicated by the following statistics:
As much of this system initially took shape, it was molded by bilateral agreements with USSR (for imports of primary products from the Soviet Union at exaggerated costs initially, and exports of primary and finished goods to the USSR at excessively reduced prices).
Bilateral trade between the countries was worked out within the framework of the Council for Mutual Economic Assistance. But such trade was notoriously lacking in a real bilateral quality: i.e. little trade developed according to the initiative of any two CMEA states independent of the rest.
Common investments in Soviet oil and natural gas industries paid trumps for most CMEA countries in the late 1960s and early 1970s, when all of them received output at rates below the world price at a time of increases in oil prices in the West. All the countries benefited from the USSR’s special relations with Angola, Mozambique, Syria, Iraq, Vietnam and India.
Moreover, from June 1971, under the terms of the ‘Complex Programme for the Further Extension and Improvement of Cooperation and Development of Socialist Economic Integration’ of the CMEA, coordination was given more importance, and its status rose in CMEA affairs.
A number of international economic organisations were begun: the Interstate Commissions for the implementation of specific tasks; the International Bank for Economic Cooperation; the International Investment Bank; research and development coordinating centers and international laboratories.
At various sessions of the Council during 1973-81, integration measures were introduced into the member countries’ plans and harmonized into a coherent plan by the Committee for Cooperation and Planning.
Such measures did not come to much where it really mattered: in the development of technology which could compete with global standards after the information revolution. US blockade of sales of such technology to the ‘east’ was substantially responsible for this.
Equally responsible, though, was inertia within state-run industry, which was willing to work with minor innovations, but unwilling to fundamentally change what existed. The resulting poor performance in trade relations with the West coincided with a major problem in the 1980s.
The CMEA did not prevent member countries interacting with the West-either though trade or though application for loans. The decrease in oil prices globally in the 1980s, the refusal of the USSR to reduce its prices, and the high level of indebtedness of many CMEA countries (Poland and Yugoslavia especially) to the West led to a troubled situation.
By 1989, the CMEA had ceased to be useful in almost any sense and had ceased to represent a common interest. Not only were some countries initiating experiments with ‘market reforms’, but the common cause that had marked the bloc in the 1950s, 60s and 70s was gone.