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JPRS 84698 


7 November 1983 


USSR Report 


INTERNATIONAL ECONOMIC RELATIONS 


No. 65 





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USSR REPORT 
INTERNATIONAL ECONOMIC RELATIONS 


No. 


CONTENTS 


USSR WORLD TRADE 


Soviet Foreign Trade for January-June 1983 


Foreign Trade Official Reviews Extent of Trade 


East-West Trade Relations Viewed 


65 


JPRS 84698 
7 November 1983 


(FOREIGN TRADE, 2 9, Sep 83) eee eee eee eeeeeeeeeeeeeeee 1 


(G. Zhuravlev: SOVETSKAYA TORGOVLYA, 4 Aug 83) .....++.+- 5 


(Alexander Belchuk; MOSCOW NEWS, No 37, 18-25 Sep 83) 10 


Soviet Imports of Transportation, Energy-Processing Equipment 
(Stanislav Volchkov; FOREIGN TRADE, No 9, Sep 83) ..... 13 


USSR-CEMA TRADE 


Soviet Scholar Views Prospects of CEMA Development 


(Yu. S. Shirayev Interview; TRUD, 21 Jun 83) ..cceeeees 27 


IBB Projects, Balances Summarized 
(Albert Belichenko; FOREIGN TRADE, No 9, Sep 83) ...... 31 


TRADE WITH INDUSTRIALIZED COUNTRIES 


Soviet-Western Licensing Agreements Detailed 


(Vladislav Malkevich; FOREIGN TRADE, No 9, Sep 83) .... 39 


TRADE WITH LDC'S 


Economic, Technical Cooperation on the Soviet Union With Developing 
Countries 

(Taceush Teodorovich; EKONOMICHESKOYE SOTRUDNICHESTVO 

STRAN~CHLENOV SEV, No 5, May 83) .occccecceseveeerevees 46 


Briefs 


USSR-Afghan Cooperation 


54 
(III = USSR - 38a] 





CENERAL 


Currency Rates, Underlying Pationale Reviewed 
(Various sources, various dates) ceccccccccceeeeeeeeeeees 


1 September Rates, by Ye. Zolotarenko 
Rate Changes Explained, by V. A. Gromov 


Moscow International Trade Center Described 
(Viktor Yevkin; MOSCOW NEWS, No 35, 4-11 Sep 83) weceeees 


Oil and Gas-83 Exhibition in Baku, Western Comments 
(Valery Grigoryev; MOSCOW NEWS, No 42, 23-30 Oct 83) .... 


55 


59 


60 











USSR WORLD TRADE 


SOVIET FOREIGN TRADE FOR JANUARY-JUNE 1983 


Moscow FOREIGN TRADE in English No 9, Sep 83 Insert 









































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C$0: 1812/12 














USSR WORLD TRADE 


FOREIGN TRADE OFFICIAL REVIEWS EXTENT OF TRADE 
Moscow SOVETSKAYA TORGCOVLYA in Russian 4 Aug 83 p 2 


{Article by GC. Zhuravlev, USSR First Deputy Minister of Foreign Trade: 
“Trade -- An Instrument of Peace”) 


[Text] The Soviet Union has come forth consistent!y in favor of the develop- 
ment of mutually advantageous business cooperaticn with all countries irre- 
spective of their social system. That was re-emphasized by General Secretary 
of the CPSU Central Committee, Chairman of the Presidium of the USSR Supreme 
Soviet Yu. V. Andropov in his message to the readers of his book, which was 
published by the West German Pal-Rugenstein Publishing House (Cologne). “All 
the thoughts of the Soviet nation and its leadership,” Yu. V. Andropov writes, 
“can be summarized as the simple and natural desire to engage in peaceful 
labor, te live in harmony with other nations, to find a common language with 
thes. . .” 


The strategic line in the area of the long-range economic development of the 
USSR was worked out by the 26th CPSU Congress. Subsequently it was developed 
and supplemented by the decisions of the subsequent Plenums of our party's 
Central Committee, particularly the May and November 1982 and June 1983 
Plenums of the CPSU Central Committee. 


After the 26th CPSU Congress a large amount of work was done to ful*ill the 
economic and social tasks that had been posed for the country. As during all 
the previous stages of our social construction, an important role in their 
resolution was given to foreign trade. During the ‘<irst two years of the 
five-year plan, Soviet foreign-trade turnover increased by 2/ percent as com- 
pared with 1980 and last year reached 119.¢ billion rubles. Export came 

to 63.2 billion rubles, and import to 56.4 billion rubles. 


At the present time the Soviet Union trades with 143 countries. As has been 
the case previously, the highest rates of development have been noted in 

the economic-trade cooperation with the socialist countries. In 1982 the 
volume of trade with them increased, as comoared with 1981, by 12.1 percent 
and reached 64.9 billion rubles, and their . ‘re in the overall commodity 
turnover of the USSK increased from 52.8 percont in 1981 to 54.3 percent. 


In the relations with the CEMA member countries, the basic attention is 
devoted to implementing an extensive series of integrational measures, and 











the concentration of efforts in the chief areas of scientific-technical 
progress, including such areas as the creation of technology that economizes 
on energy, materials, and labor, and means of automation and mechanization on 
the basis of the latest scientific achievements. 


However, life requires not simply the expansion of the cooperation among che 
socialist countries. At the June Plenum of the CPSU Central Committee it was 
emphasized that the Soviet Union is striving for a qualitatively new level of 
economic integration. Without that integration it is already impossible today 
to imagine the life of the countries in the socialist community. And in 

the long-range view, integration will become increasingly profovnd, more all- 
encompassing and more effective, reliably guaranteeing the reinforcement of 

of the national economies of the participating countries. 


One of the fundamental features of the modern world is the increasing role of 
the developing countries of Asia, Africa, and Latin America which have been 
liberated from colonial aad semicolonial dependence. The Soviet Union has 
consistently conducted a course aimed at the mutually advantageous cooperation 
with those countries, with the complete respect for their sovereignty and 

for noninterference in their affairs. We are currently trading with 101 
developing countries. The total vclume of trade with them last year came to 
16.9 billion rubles. That constitutes 14 percent of the total foreign-trade 
turnover of the USSR. 


The country that has become our largest trade partner in recent years is 
India. In ite turn, the Soviet Union is the largest trade partner of that 
country. The commodity turnover with India in 1982 reached 2.5 billion rubles. 


Substantial volumes were achieved last year in the Soviet Union's commodity 
turnover with Syria, Libya, Brazil, Argentina, Nigeria, Malaysia, Ethiopia, 
and other countries. 


The rendering of assistance and aid to the developing countries in their 
struggle to overcome their economic backwardness and to reorganize their 
international economic relations on a just and democratic basis is the 
fundamental policy of our country. 


Our economic-trade relations with the industrially developed capitalist 
countries in recent years have been carried out in a complicated situation. 
That situation was created as a result of the increased activity rate of 
the aggressive forces, primarily in the United States, which have been 
coming out in favor of breaking off normal relations with the socialist 
countries. As was indicated in the joint statement adopted at the meeting 
in Moscow of the leading party and siate figures from the seven socialist 
countries, which meeting was held on 28 June 1983, on the part of the 
aggressive forces one has noted “the increased frequency of their attempts 
at interference in the internal affairs of the socialist countries, and of 
many other countries; the mutually advantageous economic ties are being 
disrupted; hostile campaigns are being launched against the socialist countries; 
and other methods of pressure are being employed.” 


Under these conditions our government, true to the Leninist policy of peaceful 
coexistence, ia continuing to follow the course that is aimed at the 











development of stable, mutually advantageous economic ties with those Western 
countcties which show an interest in this and wnich answer in a reciprocal 
manner. 


Despite the existing difficulties, the volume and structure of our trade with 
Western countries have not onty been preserved, but have even expanded. 

In 3982 the commedity turnover with this group of countries reached 37.7 
billion rubles, increasing by 19.3 percent as compared with 1980. The 
capitalist countries currently occupy almost one-third of the total foreign- 
trade turnover of the Soviet Union. 


We are developing stabie economic-trade ties with the Western European 
countries, the share of which is approximately 80 percent of the total trade 
volume of the USSR with the industrially developed capitalist countries. 

The c:ssptry that is the largest trade partner of the USSR among the Western 
countriec is the Feteral Republic of Germany [West Germany]. Since the 
beginning of the 1970's our commodity turnover with West Germany increased by 
more than 10 times. Last year it reached 6.6 billion rubles. In cooperation 
vitt, West German firms we have carried out and are now carrying out a number 
2 important indusitrtal projects, including those on a compensational basis. 


We place a positive evaluation on the statements that were made during an 
ficial visit to our country by the West German Federal Chancellor H. Kchl 
and Federal Vice-Chancellor, West German Minister of Foreign Affairs 
H.-D. Genscher concerning the interest that the West German side has in 
‘urther long-range cooperation with our country. We hope that those state- 
ments will find their confirmation in concrete stateserts of understanding. 
We zre ready for that cooperation. 


Soviet-Finnish economic ties are developing favorably. The commodity turnover 
with Finland is characterized by a stable tendency toward growth and 

last year came to more than 5 billion rubles. There has been an expansion 
not only in reciprocal trade, but also in the cooperation in the construction 
of industrial projects. 


In June 1983, during a visit to the USSR by President of the Finnish Republic 
M. Koivisto, there was a broad exchange of opinions with regard to questions 
of the status and further development of the economic-trade cooperation 
between the two countries. A Protocol governing cocperation between the USSR 
and finland in the area of agriculture and the production of foodstuffs was 
signed. Thct protocol serves as an amendment to the long-term program for 
the development and deepening of the economic-trade, industrial, and 
scientific-technical cooperation between the two countries until 1995. 


We are continuing to develop our business cooperation with France. There 
has been successful fulfillment of the intergovernmental agreements, anc the 
commodity turnover betseen the two countries is being maintained at a high 
level, although in 198° that turnover was somewhat reduced. Recently a 
number of new major agreements and contracts have been concluded with French 
firms. The fulfillment of those agreements and contracts can promote the 
deepening cf Soviet-French economic-trade ties. This gives an even more 
strange appearance to the unfriendly actions that have been undertaken by 
the French side, which have complicated the wevelopment of bilateral 








The forecign-economic ties of the USSR with such countries as Austria, 
Belgium, the Netherlands, Greece, Denmark, Norway, Sweden, Switzerland, 

and a number of other Western European countries, are developing, on the 
whole, successfully. We continue to be an important and definitely positive 
step the adoption by the Australian government of « decision to restore the 
cooperation with the Soviet Union in a number of areas. 


The lack of progress in many aspects of Soviet-American relations also has 

a reflection upon the status of the economic-trade ties between the USSR and 
the United States, If one takes recent years and traces the development 
during that period of the trade between cur countries, one can note that one 
observes here a complete stagnation. The commodity that constituted the basic 
share in Soviet-American commodity turnover was grain shipments from the United 
States. In the final analysis it is not so much a matter of the volume of 
reciprocal trade, as a matter of the kind of atmosphere in which it develops. 
The embargoes and sanctions that were imposeu by the former and current U.S. 
presidents caused considerable damage to the trade between the two countries, 
to American businessmen, and to their Western European associates, and 
seriously poisoned the atmosphere of trust in the business world. 


The Soviet Union -- and this has been confirmed by history -- has been 
subjected, not just once and not just twice, to all kinds of "sanctions" and 
blockades. All kinds of campaigns have been organized against it, including 
"crusades." The result was always the same: our country, relying upon its 
powerful potential, overcame all those obstacles on the path of its develop- 
ment. And the ones who proved to be the losers were those who imposed the 
sanctions, who issued the calle for those campaigns, who established those 
blockades and boycotts. As for the Soviet side, it took and will continue to 
take prompt and effective measures to protect its own interests. 


This does not mean that we heve put all the American firms on a blacklist 

and do not want to have anything else to do with the United States. We take 

a respectful and attentive attitude to the efforts of those American companies 
which, despite the difficulties, are striving for the development of normal 
trade ties with our country. A reflection of the continuing interest that 
American business has in trade with us was the successful conducting in Moscow 
in November 1982, after a four-year interruption, of a session of the members 
of the U.S.-Soviet Trade and Economic Council, in which approximately 500 
prominent representatives from the business circles of the two countries took 
part. 


We continue to be in favor of economic-trade cooperation with the United States. 
But it is that kind of cooperation which would be based on equality, mutual 
advantage, the observance of contractual obligations, the rejection of discri- 
mination, and upon the rejection of a policy of tying questions of reciprocal 
trade to problems that do not pertain to that reciprocal trade. 


In recent years there has been a slowing down of the development of our 

trade relations with Great Britain and Japan, as a result of the fact that those 
countries have been following the American policy of sanctions. But this 

year, it seems to us, in both of those countries there has been an intensifica- 

tion of the striving for a more constructive approach to the economic-trade ties 











with the USSR. It would seem that the business cooperation between the 
Soviet Union and Japan could develop more successfully if that country would 
carry out a more realistic and more constructive policy with respect to trade 
with the USSR. 


Foreign-economic ties are an organic component of the Soviet Union's foreign 
policy, which is aimed at the reinforcement of the socialist community, at 
promoting the development of the economy for the consolidation and economic 
independence of the developing countries, at the maintaining of the principles 
of peaceful coexistence, and at the reinforcement of the process of detente 

in relations with the capitalist countries. 


Lenin's instruction concerning the need to use the trade ties with foreign 

countries as an active instrument for the confirmation of the peaceful prin- 
ciplies in international life finds constant embodiment in the activities of 
our party and our country. 


5075 
CSO: 1825/78 








SSR WORLD TRADE 


EAST-WEST TRADE RELATIONS VIEWED 


Moscow MOSCOW NEWS in English No 37, 18-25 Sep 83 p 5 


Principles and 


"The USSR on World Markets. 


[Article by Alexander Belchuk: 


Practice’ ] 


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Por all that it must be emphasized 
that a8 compared with domestic 
production and investments, the 
volume of Soviet foreign trade 
purchases and sales continues to be 
relatively modest The USSR is a vast 
country with great natural resources 
and 4 modern economy No matter 
hurw successfully foreign economic 
relations may , 
ausiliary element in the Soviet 
national economy In the future, too. 
the main tasks of scientific and 
technical progress will be solved by 
our own eflorts 


CMEA 
IN FIRST PLACE 


Central te the USER's foreign trade 
are the sxialist states, primarily 
countries alfiliated through the 
Couns for Mutual Economic Assis 
tance (CMEA) 

The USSR mainly caports two 
major categories of goods to the 
CMEA countries machines and 
equioment, fuel and raw materials 
Mutual deliveries are carried out in 
the framework of five year and 
annual plans They key economic 
problems, including fuel, raw ma 
terials, food, and transport, are 
wived im accordance with the Com 
prehensive Programme for Socialist 
tKaonome Integratwm of the CMEA 
Cauntries 

In the 10708, the fuel and raw 
materials problem acquired particu 
lat egnificame for the CMEA coun 
iries Through purchases from the 
USSR the CMEA partners meet 
roughly tour fifths of all their import 
requirements in this sphere, includ 
‘mg cil and oi! products, electricity, 
mas, iron and manganese ore, timber, 
cotton, etc it should be borne in 
mind that throughout the 1970s and 
carly 19806 within the CMEA the pri 
ces for energy resources and taw ma 
terials were considerably lower than 
world prices, which made it much 
camer lor these countries to adapt to 
the new conditions that arose in 
connection with a sharp increase in 
fuel prices with the outbreak of the 
energy crite 


On the other hand, the CMEA 
member countries are the main sup- 
plers of equipment to \ve USER 
Their share comprises roughly two. 
thirds of the Soviet import of 
equipment At the same time, the 
Soviet Union is, for these countries, 
the principal market for their consu- 
mer goods, especially textiles, foot 
wear, and furniture, and also fruit 
and vegetables 


The policy of reaching joint solu. 
trons to problems of foreign economic 
relations and economy in general is 


the main feature of the CMEA 
countries’ foreign economic policy. 
which is a particularly important 
factor in the present complicated 
political and economic situation in 
the world 


DEVELOPING 
COUNTRIES - 
AN EQUAL 
PARTNER 


a economic coopera 
tion with the Third World, the Soviet 
Union renders considerable assis. 
tance to the young countries in laying 
the foundations of modern industry, 
helps them expand their export 
markets, and supports their desire for 
the restructuring of the system of 
international economic relations on 
an equitable basis By way of 
purchases in the developing countries 
the USSR partially or fully covers its 
import requiremencs for such goods 
as 6tin, natural rubber, bauxites, 
phosphates, coffec, cocoa beans, 
bananas, oranges, cereals, ‘neat, oil- 
bearing seeds, and hard timber. The 
import of industrial goods, especially 
textiles, footwear, and articles of 
artistic crafts, has likewise been 
expanding 


At to Soviet export to these 
regions, it mainly consists of in- 
dustrial equipment, primarily com- 
plete plants. 

In assessing the Soviet Union's 
contribution to the economic devel. 
opment of the young countries, it 
should be borne in mind that Soviet 
economic assistance is concentrated 
in branches that are of key impor- 
tance to these countrits: the power 
and metallurgical industries, irriga- 
tion and training of technical person 
nel. Moreover, the enterprises built 
with Soviet assistance become the 
full property of these countries. The 
payment for Soviet participation is 
done, as a fule, not in freely 
convertible currency but in goods of 
traditional export, which is advanta- 
geous for the developing countries 


COLD WAR WINDS 


Lately, East West economic rela 
tions, especially those of the USSR 
with the West, have drawn consi- 
derable attention. The reason for this 
is the transformation of these rela- 
tions into an object of active political 
interference on the part of the right 
wing circles of imperialist countries 
As a result, marked changes were 
wrought in the trends of the 1970s - 
a period when, under the impact of 
a general improvement in the inter- 
national situation, economic relations 
were intensively developing between 


11 


Fast and West, and new forms of 
cooperation were becoming wide 
spread. At the beginning of the 
present decade, the situation looked 
different. Trade between the two 
groups of countries declined in 
1981 and this trend continued into 
1982 
What was the reason? 


A number of negative processes in 
the world economy and politics have 
had their effect on relations between 
East and West. Specifically, because 
of the crisis in the i 
the demand for some ex goods 
the socialist countries p nah and 
competition on the world markets 

. The steep rise in interest 
rates in 1961-1982 markedly increased 
the cost of international credit, an 
inalienable element of trade 


However, it's doubtless that the 
main damage to these relations was 
done bs political factors. The root 
cause of this is Washington's hegemo 
nistic ambiiions, its claims t» world 
leadership, and its increasingly more 
avowed anti-communist and anti 
socialist stand. In this respect, the 
events of the early 1980s go beyond 
the framework of the zigzags in 
American policy, quite a few of which 
could also be found in previous years 


SANCTIONS ARE 
A HOPELESS AFFAIR, 


BUT... 


The change in the West's relations, 
primarily the USA's, to economic ties 
with the USSR and other socialist 
countries, commenced under the 
Carter administration, but it came to 
a head under the Reagan government. 
The policy of discrimination was 
focused on three spheres. the Siberia. 
Western Europe gas pipeline, the 
transfer of technology, and credit 
restrictions. 

As regards the gas pipeline, the 
situation is already clear: Washing. 
ton's decision to prohibit American 
firms, inciuding their subsidiaries in 
Western Europe, from taking part in 
equipment deliveries for the con- 
struction of the gas pipeline in the 
USSR sparked such sharp protests 
everywhere that the Reagan admi-. 
nistration has had to cancel its 
sanctions. But in two other spheres 
the situation is different. Under US 
pressure, the Consultative Croup 

ration Committee - an agency 
of the NATO countries, set up way 
back in the late 1940s to control the 
sale of “strategic” goods to socialist 
countries — stepped up its activities 
And in the spring of 1982, the 
Common Market introduced restric 
tions on the import of several dozen 








goods from the CMFA countries In 
19m) 1982, discrimination practies 
were widely applied to credit rela 


thons 


These tendencies were also con 
firmed at the meeting of the Big 
Seven in Willia ra. where the 
leaders of the W Ruropean coun 
tries and japan, pressured by the 
USA, agreed to link trade and econo 
mi relations between East and West 
to the “security interests” of the 
NATO countries 


A trade blockade and the fold up ot 
scientific and technical ties are by far 
not new methods of struggle against 
the socialist states. The hopelessness 
of this was ——— admitted in the 
West Nevertheless, some politicians 
have tried to use them again and 
main in the hope of arresting the 
coonome growth of the USSR and 
other CMEA countries This policy is 
based on caxaggerated notions con 
corning the rule of Western techno 
logy in the development of the Soviet 
economy But it # common know! 
edge that a trade biockade was 
incapable of hampering the devel 
opment of the USSK's economy even 
mm the first years of Soviet power 
Such methods have even lees chances 
of success now that the CMEA 
countries possess a powerful econo 
ma potential 





VOLUME OF THE USSR’s FOREIGN ) 
TRADE BY GROUPS OF COUNTRIES 
(1,000 million roubles) 

1970 19860 1982 
Total 
Turnover 22.1 4.1 1196 
Export 15 #6 63.2 
port 106 445 44 
Socialist countries 
Turnover 144 #6 666 
Export 75 649 M2 
port 69 23.7 ws 
Industrialized capitalist 
countries 
Turnover 47 5 37.7 
Export 22 68 168 
port 25 17 169 
Developing countries 
Turnover 30 120 169 
Export is 69 102 
Import 12 51 67 





1812/270 


On the other hand. the policy of 
sanctions has introduced clements of 
instability, mistrust and insecurity in 
trade relations, to say of ‘the 
fact that the entire at re of 
mutual relations is generally being 
poisoned, Pearing unpredict com 
plications, some Western firms ats 
tained from concluding contracts 
with organizations of the socialist 
countries even on products that did 
not fall under restrictive measures 
At the same time, credit restrictions 
compelled many socialist countries to 
cut down imports from the West 


In this way, the carly 19808 have 
seen contradictory tendencies in 
economic relations between the capi 
talist and socialist countries The cold 
war winds have, undoubtedly, done 
no small harm to these relations On 
the other hand, it is obvious that 
economic contacts between East and 
West have al become an impor. 
tant factor in tons between the 
two groups of countries. and the line 
towards their fcid-up is meeting with 
legitimate in many coun- 
tries in the West. ‘ 


STABLE COOPERATION 
IN THE INTERESTS OF ALL 


The USSR has taken a consistent 


12 


stand on the development of mu 
tually advantageous economic rela 
tions with the West, first and 
foremost those countries which have 
shown due concern for this After all. 
there can be no de that the West 
benefits substantially from economic 
ties with the USSR and the CMEA 
countries as a whole Soviet contracts 
provide for an estimated nearly 
two million people In most cases, 
Soviet export does not act as a rival to 
local production. Por a number of 
important products, notably gas, oi! 
and oil products, cotton, some non. 
ferrous metals, asbestos, etc, the 
Western countries have been able to 
diversify their supply sources thanks 
to purchases from the US6R The 
markets of the socialist countries ere 
influenced to a much lesser degree by 
the fluctuations in the business 
situation and ‘afiation than is the 
world market. The stability of 


Soviet Union not fulfil its 
commercial contracts due to political 
considerations 


Lastly, international economic ties, 
especially those between East and 
West, an important political role 
These relations constitute an econo 
mic basis for the policy of peaceful 
coexistence 











USSR WORLD TRADE 


SOVIET IMPORTS OF TRANSPORTATION, ENERCY-PROCESSING EQUIPMENT 


Moscow FOREIGN TRADE in English No 9, Sep 83 pp 19-25 


(Article by Stanislav Volchkov, general director of V/O Machinoimport, meaber 
of the Collegium of the USSR Ministry of Foreign Trade] 


Text 
ome in October 1983 the All-Union Foreign Trade Asso- 


ciation Machinoimport marks the 50th anniversary of 
its commercial activity, reflecting the multifarious 
work of the entire staff on implementing the Soviet 
state’s foreign economic policy. From the first days of 
its formation Machinoimport has helped outfit the 
Soviet Union’s ..ajor projects with the latest equip- 
ment and machinery. The first purchases were elec- 
trical engineering products and transport mechanisms. 
As the Association advanced the range of the imported 
equipment became wider. In the 1940s it included min- 
ing, metaliurgical, electrical engineering, power engi- 
neering equipment, lifting-and-conveying machines 
and also merchant, fishing ships and tugs, timber 
carriers and tankers, dredges and floating cranes. 

Many electric power stations constructed under the 
GOELRO plan (State Plan for the Electrification of 
Russia) were fitted out with power engineering equip- 
ment supplied under Machinoimport’s contracts. 

In the pre-war years the Association imported 
equipment for large machine-building factories in the 
Urals, Moscow, Leningrad and the Ukraine, motor 
works in Moscow and Gorky, iron-and-steel plants in 
Magnitogorsk, Orsk, Kuznetsk and Makeevka, coal- 
dressing factories and non-ferrous metal works, tractor 
and aircraft factories. These deliveries assisted the na- 
tional economy to achieve high growth rates and made 
it possible to gain time as aga‘nst the time-limits needed 
for mastering the production of this equipment af 
Soviet factories. 


13 

















The Soviet staie’s policy aimed at accelerated devel- 
opment of its own machine-building industry from ra- 
tional import resulied in the fact that already in the 
pre-war years the Soviet Union took the first place in 
Europe in manufacturing machinery and engineering 
products and assured its engineering and economic 


World War 11 (1941-1945) required the restruc- 
turing of Machinoimport’s activity on providing mi- 
litary production and meeting the particular needs of 
the national economy. At that period the volume of the 
Association’s foreign trade operations increased. 
Equipment was supplied for blast and open-hearth 
furnaces, coke-oven batteries and rolling mills. Also 
were imported excavators, drilling rigs, the first 
complete oil refineries, oil-demineralizing and 
dewatering installations, etc. 

In the postwar period the Association's import 
operations actively helped restore many major sectors 
of the USSR’s economy such as metallurgy, power 
engineering, fuel, machine-building as well as railway 
and other types of tranoport. 

With the formation of the world socialist system a 
new stage in Machinoimport’s commercial activity 
began. The socialist countries’ share in the Acso- 
ciation’s trade turnover considerably surpassed the vol- 
ume of purchases from the industrial capitalist 
countries. This became possible thanks to the socialist 
countries’ rapid strengthening of economy and devel- 
opment of industrial potential. 

The expansion of economic ties with the socialist 
community countries based on long-term in- 
tergovernmental agreements on mutual goods deliver- 
ies promoted stable ‘business contacts with many for- 
eign trade organizations in these countries. 

The share of the socialist countries in the Asso- 
ciation’s trade turnover over the last decade exceeds 80 
per cent; in the import the share of the GDR is about 27 
per cent, Bulgaria—26 per cent, Czechoslovakia—14 
per cent, Poland—i3 per cent, Romania—12 per cent, 
Yugoslavia—$ per cent and Hungary—3 per cent. On 
the average under Machinoimport’s contracts one- 
fourth (in cost value) of the Soviet total machinery and 
equipmem imports is annually supplied from the so- 
cialist countries. 

The development of the international socialist di- 
vision of labour, deepening of the CMEA member- 
countries’ specialization and cooperation in production 


14 











build the foundation and form the prerequisites for 
socialist economic integration making it possible :o 
fruitfully develop the countries’ national economies 
and promote a more rationa! and efficient utilization 
of natural, economic and manpower resources in na- 
tional interests and those of the whole socialist commu- 
nity. 

Machinoimport makes a ponderable contribution 
to cooperation based on agreements on production, 
specialization and cooperation in manufacturing in- 
dustries. In the deliveries of machinery and equipment 
imported by the Association from the socialist 
countries the portion of special-purpose products is 
ever increasing and in the current year will reach 78 per 
cent. For the 1981-1986 period Machinoimport is to 
implement 41 agreements on specialization and coop- 
eration in production which concern practically all 
CMEA member-countries. 

Machinoimport has stable business contacts with 
the socialist countries’ foreign trade organizations such 
as: Balkancarimpex, Electroimpex,  Isotimpex, 
Technoexportstroy (Bulgaria); HSCF', NIKEX, Ganz 
Mavag (Hungary); Elektrotechnik, Technocommerz, 
Maschinen-Export, Schienenfahrzeuge (GDR); Elek- 
trim, Bumar and Koimex (Poland); Industrial export- 
import and Electro-export-import (Romania); Pra- 
goinvest, Skodaexport, Technoexport and Strojexport 
(Czechoslovakia) and Energoinvest and Rade Konéar 
(Yugoslavia). 

On account of agreements on specialization and 
cooperation in production these foreign trade organi- 
zations, under Machinoimport's contracts, supply the 
Soviet Union with freight and passenger cars, diesel 
locomotives, hydro-engineering equipment, industrial 
fittings, equipment for drilling and extracting oil and 
gas, locomotive and gantry cranes, oil-refining equip- 
ment, electric motors, gas turbine installations, 
compressors and pumps, low-voltage and high-voltage 
electrical equipment, truck loaders, crane trucks, steam 
turbines and other equipment. 

In line with the Comprehensive Programme for the 
Further Extension and improvement of Cooperation 
and the Development of Socialist Economic Integ- 
ration of the CMEA member-countries Machinoim- 
port’ carries out work on realization of the in- 
tergovernmental agreements on constructing industrial 
projects on Soviet territory for which the participating 
countries supplied equipment in exchange for products 


15 











which vill be delivered to them after the project is put 
into operation. The Association began this work in 
1974 and at present the deliveries of machinery and 
equipment for the Kiembayev mining and ore-dressing 
complex, the Ust-Ilimsk cellulose factory, the Oren- 
burg gas condensate complex, the Soyuz gas pipeline 
and the Vinnitsa-Albertirsa high-voltage power trans- 
mission line are completed. In the eleventh five-year- 
plan period (1981-1985) equipment is being delivered 
for the Mozyr factory manufacturing fodder yeast 
from paraffins and the South-Ukrainian atomic power 
station. 

The Association also undertakes commercial ope- 
rations on interrelated deliveries of most vital goods 
specified by the CMEA member-countries’ state plans. 
Under the relevant agreements the Associaiion 
supplied equipment for developing the production of 
ferro-alloys, ferriferous raw material, rolled ferrous 
metals and oil extraction and refining in the USSR. 
These enterprises’ products, in their turn, are shipped 
to the countries participating in the agreements: Bulga- 
ria, the GDR, Hungary, Czechoslovakia and Romania. 

Over many years the Association, along with the 
import operations, exported mining, elecirical engi- 
neering, lifting-and-conveying equipment, marine 
diesel motors, diesel-generators and railway rolling- 
stock including steam locomotives. With the setting up 
of new All-Union Foreign Trade Associations Sudoim- 
port, Machinoexport, Techmashexport and Energoma- 
chexport the export operations were transferred to 
these organizations. 

Since 1966 Machinoimport has concentrated on im- 
port operations. Only since 1979 has it been handling 
the export to the socialist countries of completing 
equipment for railway rolling stock purchased by the 
Soviet Union from the GDR, Poland, Romania and 
Hungary. 

Railway rolling-stock has been the Association's 
major import item in all the years of its activity. For 
many decades now the Association has been importing 
electric locomotives and equipment for traction 
substations. 

In 1956 the Soviet Union adopted a general plan for 
electrification of railways. In line with this plan the 
Associaiton purchased 70 electric locomotives, includ- 
ing ten passenger ones, from France and the Federal 
Republic of Germany. In 1957 Czechoslovakia began 
to deliver the CS main-line passenger electric locomo- 


16 








tives to the USSR. These electric locomotives were 
constantly improved. This year the first eight-axial AC 
passenger locumonives assuring a speeu of 150 km/h at 
prolonged gradient sections are to be tested. 

On the occasion of the 25h anniversary of Soviet 
and Czechoslovak specialists’ fruitful cooperation the 
year 1982 was ceremonially marked by the delivery of 
the Czechoslovak 2,000th electric locomotive. 

Since 1949 the Association has bought from the 
GDK and Czechoslovakia | ,420 industrial electric loco- 
motives and truck tractive units for large enterprises in 
the mining, metallurgical and coal industries. At 
present on the basis of modernization of the EL type 
mine electric locomotives 200 of them are to be 
supplied to the USSR annually by the GDR. At the 
same time the EL-2! thyristor controlled industrial 
electric locomotives with more powerful rheostatic 
braking are being designed and tested. Since 1964 
Czechoslovakia has been delivering the CME-3 shunt- 
ing diesel locomotives, the total number of which ex- 
ceeded 4,000 machines, thus composing more than half 
of the fleet of the shunting diesel locomotives in the 
Soviet Union. 

In the 1960s and 1970s the wide development of gas 
and oil fields in Siteria and the Extrem North of our 
country began. Due to this, large-scale construction of 
pipelines and enterprises of the oil, gas and chemical 
industries was undertaken. That is why in 1965 the 
Association stopped purchasing individual units for 
oil-refining, gasoline reforming and diesel fuel hy- 
drofining installations and began to buy complete oil- 
refining plants from the socialist and capitalist 
countries. Over this period Czechoslovakia supplied 14 
complete catalytic gasoline reforming installations 
(productivity 600,000 and one million tons of high-oc- 
tane gasoline per year) and eleven diesel fuel hydrofin- 
ing installations (productivity 1.2 and two million tons 
per year). These complete installations were designed 
on the basis cf Soviet technical documentation. Thanks 
to these deliveries the capacity of the petroleum re- 
fining industry for the secondary oil-refining processes 
was increased by 27 million tons. 

During the same period the GDR delivered 16 
complete gasoline catalytic reforming installations and 
two diesel fuel hydrofining installations (productivity 
1.2 million tons each). 

Since 1972 the GDR has delivered 12 complete 
primary oil-refining installations with the ELOU- 


17 








AYT 4 electric demineralizing plants (annual producti- 
vity six million tons of oil each). 

In 1978 the Soviet industry received from the GDR 
ten Parex complete installations (productivity 120,000 
tons of normal paraffins per year) used for manufac- 
turing protein-vitamin preparations and also more than 
30 installations for collecting and pre;aring oil. 

For more than 20 years the Association has been 


mania. 

In the ninth five-year-plan period (1970-1975) the 
Soviet Union widely developed the gas extracting and 
gas-processing industries. The oil and gas construction 
programme envisages further growth of the work vol- 
ume, its shifting to the northern regions of Wen 
Siberia; it is one of the most important links in the 


long-term power engineering programme. 
in the 1970s Czechoslovakia started delivering 


regularly Ladoga and then Avrora gas-pumping plants 
manufactured under the Soviet technical documen- 
tation to the USSR. | 

In 1978 Machinoexport imported eight complete 
vertical suction pumps for the Siberian trunk gas 
pipelines. 

The country’s largest trunk gas pipelines supplying 
products-to Soviet and foreign users are: Saratov-Mo- 
scow; Dashava-Kiev; Orenburg-Novopskov; the Soyuz 
pipeline; Urengoi-Oryazovets-MOK,*; Bukhara-Cen- 
tre; Urengoi-Petrovsk; Urengoi-Novopskov, and 
Urengoi-Chelyabinsk which, besides Soviet equipment, 
were outfitted with gas-pumping equipment and line 
facilities supplied under Machinoimport’s contracts 
with firms in Great Britain, Italy, France and the FRG. 

Equipment deliveries for constructing the Ust- 
Balyk-Ufa-Almetyevsk, Aleksandrovskoye-Anzhero- 
Sudzhensk, Ust-Balyk-Omsk and Khoimogory-Centre 
were not less efficient. 

Over the 1981-1985 period it is planned to complete 
the work volume surpassing the indices achieved during 
the previous fifteen years and the country’s gas con- 
sumption in the next decade will double. For the firs 
time in the world a multiple system of transcontinental 
trunk lines in a single lane (internal pipe pressure 
100-120 atm) is under construction in the Soviet Union. 

In this connection Machinoimport in 1981 and 1982 
carried out much work on placing orders and organiz- 
ing timely equipment deliveries from the FRG, Japan, 


18 














year) was purchased. 

The USSR Ministry of Oil Industry ordered and 
received 19 Unioflax type furnaces for preparing stock 
tank oil for shipping and a set of equipment for the 
gas-lift oil extraction at the Samotlor and Fyodorovka 
oii-fields in West Siberia t! anks to which the operation 
of boreholes will assure an optimum automated re- 
gime. 

Over the 1966-1983 period France supplied a great 
number of complete installations for the USSR Min- 
istry of Ojil-refining and Petrochemical industry. 
Among them are installations for catalytic gasoline 
reforming and hydrofining diesel fuel, for hy- 
drocracking and also for manufacturing paraffin and 
calcinating oil coke. 

Most powerful and perfect installations, assuring 
the output of three million tons of high-quality pe- 
troleum products per year, were supplied for the No- 
voufimsky oil refinery. 

The English firm Petrocarbon delivered, under Ma- 
chinoimport’s contracts, complete installations manu- 
facturing sriphonate additives for automobile and 


19 














diese! motor oils prolonging the life of engines and oils 
to the Volgograd and Omsk oil-refining complexes. 

Tarmac, an English firm, supplied the Omsk pe- 
troleum-refining complex with a complete installation 
producing lithia lubricants (productivity $,000 tons per 
year). 

Machinoimport imported natural gasoline extrac- 
tion plants processing casing-head gases which reduce 
casing-head gas losses and increase the output of high- 
purity hydrocarbons, a valuable raw material for 
synthetic rubber factories and other industries. 

Four installations for calcinating oil coke (producti- 
vity 140,000 tons per year) used for manufacturing 
electrodes for smelting aluminium and copper, were 
receive: from the FRG and put into operation. 

In Surgut, Belozerny and Nizhnevartovsk highly- 
productive gas-processing factories supplied from 
Japan are operating. Their raw materials are casing- 
head gases which before were burnt in torches at West 
Siberian oil-fields. These factories ensure the pro- 
duction of additional millions of tons of propane, 
butane and other products utilized in the chemical 
industry. In the post—war years 
rapid development of the mining in- 
dustry, especially open-cast mining 
of minerals, required highly pro- 
ductive continuous-acting stripping 
equipment. 

Ai that period the home in- 
dust7y could not ensure the ever-in- 
creasing stripping volume that is 
why between 1956 and 1968 Ma- 
chinoimport bought from the 
GDR, Czechoslovakia and the Fed- 
eral Republic of Germany stripping 
equipment with a total productivity 
of 220 million cubic metres of over- 
burden rock a year, which made 
possible within a short period of 
time to put into operation a number 
of large opencast collieries for the 
production of minerals and 
building materiels. 

The designing and construction 
of new quarries to produce iron ore, manganese, 
sulphur and other minerals was based, as a rule, on the 
technological principle of open workings using the con- 
tinuous operating equipment. 


20 ’ 





The Seviet Union imported 12 siripping complexes 
comprising a bucke:-wheel excavator (productivity 
7,209 cubic metres per hour), a soreader (productivity 
8,800 cubic metres) with a 15C m consoie, and bel 
conveyer systems. 

The purchased stripping equipm 2nt made it possi- 
ble rot only to reduce extraction costs but substantially 
increase labour productivity and made stripping ope- 
rations fully mechanized. 

In the current five-year plan period excavators with 
bucket capacity from 12.5 to 20 cubic metres are being 
imtroduced at new opencast collieries. At the Neryungri 
opencast mine excavators with 20 cubic-mrtre buckets 
purchased by the Association from the Japanese firm 
Sumitomo take care of fifty per ceni of the stripping 
volume. 

Twenty-two excavators with 16 cubic-metre 
buckets, bought in 1983 from Japan, will increase 
coking coal output in Kuzbass. They will lift 60 million 
cubic metres of rock volume per year. 

Between 1959 and 1962 the deliveries of equipment 
for complete coal-dressing factories under Machinoim- 
port's contracts with the French firm Venot Pic, one of 
the most advanced at that time, greatly assisted in 
fulfilling tasks for quick introduction of the latest 
coal-dressing methods in the Soviet coal industry. The 
commissioning of three coal-dressing factories in Don- 
bass promoted wider dissemination in the USSR of a 
progressive method of coal-dressing in heavy media. 

For coal-dressing production West German firms 
supplied equipment for the Belovo central dressing 
factory (Kuzbass) and the West Siberian iron-and-siecl 
works; on the basis cf this equipment operational 
experience coal-dressing factories (capacity 5-8 million 
tons per year), to be outfitted with Soviet equipment, 
are being designed now. 

Machinoimport has contributed to the development 
of the chemical industry. This sector received electrical 
engineering, lifting-and-conveying, power engineering 
equipment as well as chemicaily resistant pumps, fans, 
g. | blowers, speciz] facilities and fittings made from 
high-alloy steels ad special alloys designed for high 
pressures and temperatures. 

Over recent years the Association's duties were 
reduced somewhat due to the setting up of specialized 
associations dealing with complete equipment import 
for the chemical industry. However, requirements to 
technical parameters of pumps and compressors such 


21 








as: pressure, explosion risk and high aggressiveness of 
working medium, have become more stringent. 

The import of a wide range of electrical engineering 
equipment: electric motors, generators, rectifiers, 
starting equipment, electric welding equipment and 
electric furnaces, transformers and complete transfor- 
mer substations, high-voltage testing equipment, div- 
erse low-voltage equipment, etc. take an important 
place in the Association's activity. 

For urban transport the Association imports trams. 
In 1982 Volgograd ceremoniously celebrated the 
10,000th tram-car imported from Czechoslovakia. De- 
velopment of towns and growth of their population 
and also development of the technical base set forward 
new and ever newer demands on improving the tram- 
cars. A thyristor-impulse controlled tram-car is sche- 
duled for the near future. 


The plan for economic and social development of 
the USSR envisages for the current five-year-plan peri- 
od and for the period ending in 1990 the all-round 
introduction of large-scale mechanization and auto- 
mation of production processes and steady reduction in 
the number of workers engaged in manual labour in all 
sectors especially in the auxiliary and transport spheres 
including loading and unloading operations. 


Machinoimport has for many years actively partici- 
pated in accomplishing this important state task by 
importing various lifting-and-conveying equipment 
from the socialist and capitalist countries. 


It began to supply gantry cranes for equipping sea 
and river ports even before World War II. As years 
passed and foreign trade ties expanded, the import of 
gantry cranes began to increase for loading-unloading 
operations in the Far Eastern and northern sea ports 
and those of the Baltic, Black and Caspian seas. 


Due to the necessity to augment the sea ports’ 
traffic-carrying capacity highly productive tranship- 
ment machines and specialized complexes for new 
ports being constructed (and for reconstructed ones) 
were purchased from other countries. In 1973-1975 
delivered and in 1978-1979 put into operation were 
unique specialized complexes at the Vostochny port 
(Wrangel bay) bought from Japan. This is a tranship- 
ment complex (handling capacity five million tons of 
coal and 800,000 tons of technological chips per year) 
and also a terminal for transhipping 8,000 to 9,000 
large-tonnage containers per year. 


22 








Wharf reloading cranes for containers (weight up to 
40 tons), automatic container carriers, gantry cranes 
imported by the Association helped mechanize bulk 
cargo handling operations in the Soviet ports: Batumi, 
Zhdanov, Murmansk, Ilyichevsk, Nikolayev, Riga, 
Leningrad, Arkhangelsk and Magadan. 

Pneumatic installations for transferring grain from 
ships to wagons (productivity 300 and 150 tons per 
hour) bought from the FRG and Japan for the USSR 
Ministry of Merchant Marine and the Ministry of River 
Transport of the RSFSR are a certain contribution in 
accomplishing the tasks set in developing the agro-in- 
dustrial complex. Hungary and the GDR also supply 
these large customers with gantry cranes (load capacity 
$ to 40 tons), the number of which over the last decade 
alone exceeded | ,300. 


GDR-made locomotive cranes perform emergency 
operations and are used for various loading and 
unloading and construction and assembly operations 
when mounting bridge spans, car retarders, and trans- 
formers at traction substations. The USSR Ministry of 
Railways has already received over 300 such cranes. 


The Finnish firm Kone delivers large-tonnage gan- 
try cranes for the Soviet Union's shipbuilding and ship 


repair enterprises. 


Electric telphers received from Bulgaria reduce 
manual non-mechanized labour. In 1983 the 
1,000,000th telpher was delivered. 


Since 1959 Bulgaria has been specializing, with 
Soviet and Czechoslovak technical and financial assist- 
ance, in manufacturing floor transport machinery: 
electric loaders, electrocars and auto loaders. All in all 
the USSR hus received almost 300,000 of them. 


Over recent years Machinoimport purchased diesel 
loaders (load capacity ranging from 1.5 to 30 tons) 
from Japan, Great Britain, Sweden and Finland for 
loading-unloading operations on ships, railway wagons 
and also in the forest industry. 


Machinoimport actively participates in imple- 
menting the USSR Food Programme by importing 
machinery and equipment for developing the country's 
agro-industrial complex: special rolling-stock, elec- 
trical engineering equipment, shop floor transport ma- 
chinery, special loading-unloading facilities, heating 
boilers for greenhouses, and pumj for watering 
systems. 


23 











possible to open new raw material and industrial re- 
sources along 3,500 kilometres of its route, plays a 
decisive role in further developing Siberia and the Far 
East where almon thzee-fourths of the forecasted res- 
erves of the USSR major mineral resources are con- 


Railway (Baikal-Amur Railway-Tynda-Berkatit is a 
railway north of the Trans-Siberian Railway line) and 
developing the South- Y akutian coal complex. 


Construction of the Baikal-Amur Railway is near- 
ing completion. It is still being built and the completed 
lines are already operating. Building materials, facili- 


ties, machinery and equipment are delivered to Ne- 
ryungri and other towns and settlements in Yakutia 


and the Far East from the country’s industrial regions 
without transhipment making the freight conveyance 
to this region much cheaper. 


In May 1979 Machinoimport was reorganized into 
the All-Union Self-Supporting Foreign Trade Asso- 
ciation comprizing eleven specialized firms: Elek- 
trotechmash, Kranoekskavator, Gathydromash, Ener- 
gosila, Promarmatura, Podyomtransmash, Elektro- 
aviokar, Zheldormash, Inzhservismash, Electro- 
lokomash and Gazneftemash. 

In line with its Charter the Association undertakes 
export-import operations on the Association’s range 
and measures assuring the uninterrupted operation of 
the machinery imported to the USSR. 

Besides purchasing spare parts for new equipment, 
and for guarantee maintenance, the Association an- 
nually, in ever increasing volumes, imports spare parts 
for equipment now in use. The delivery of spare parts 
to the centralized supply depots under Gossnab (the 
USSR State Committee for Material and Technical 
Supply) has become common practice. Amalgamation 
of the recipients has made it possible to provide the 
imported equipment with spare parts more efficiently 
and quickly. Servicing and maintenance stations are set 
up by agreement with foreign suppliers. All this activity 
is, in the main, undertaken by the firm Inzhservismash. 


Matters concerned with timely putting the supplied 
equipment into operation, contract supervision work at 


24 








Start-up projects, training Soviet specialists in foreign 
countries and in te USSR in the course of assembling, 
adjusting and putiing the equipment into operation, 
with the receipt of equipment by the customer's spe- 
cialists at the producer factory, including technical 
documentation and specifications for the complete sets 
of equipment, participation in testing industrial pro- 
tot) oes and other undertakings assuring the import of 
high-quality equipment—all within the contracted 
time-limits take an important place in the activity of the 
firms comprising the Association. 

departments are of paramount importance for the 
successful achievement of production targets, for im- 
proving specifications, expanding the range of equip- 
ment and making it more sophisticated. The Ma- 
chinoimport's Board includes representatives from ma- 
jor customer ministries. Among them are: the USSR 
Gossnab, the USSR Ministry of Gas Industry, the 
USSR Ministry of Railways, the USSR Ministry of 
Oil-Refining and Petrochemical Industry, the USSR 
Ministry of the Chemical and Oil Engineering In- 
dustry, the USSR Ministry of Merchant Marine, the 
USSR Ministry of Electrical Engineering Industry, and 
the USSR Ministry of Oil Industry. 


Over the many decades of cooperation, good busi- 
ness relations have been established among Soviet part- 
ners. They reflect the customers’ high confidence in the 
experience and executive capabilities of the Asso- 
ciation’s staff as its traditional method of work. Such 
contacts assist a more sophisticated and efficient 
solution of production problems to be found. 


The course of the Soviet Government set at ex- 
panding foreign economic ties and more effective utili- 
zation of possibilities and advantages of the inter- 
national division of labour is realized in the increased 
role foreign trade plays in the Soviet economy. 


To raise the effectiveness of foreign trade efforts 
are Ueing exerted to perfect the Association’s activity, 
improve the quality and technical level of equipment 
purchased and deepen contacts with the Soviet Union's 
branch ministries, departments, research institutes and 
planning organizations. 

Machinoimport over the past fifty years has contri- 
buted to the Soviet people’s labour exploits, partici- 
pated in accomplishing many governmental tasks on 
developing the USSR’s national economy and became 
one of its largest specialized foreign trade organi- 
zations well known in the world. 


25 








COPYRIGHT: 


cso: 


Machinoimport’s commercial activity has many 
times been complimented by the Soviet Government 
and the Administration of the USSR Foreign Trade 
Ministry. In 1980 Machinoimport was presented with 
the International Gold Mercury Award for its contri- 
bution to the development of production and inter- 
national cooperation. 


Machinoimport’s staff is ready for the further ful- 
filment of even more responsibie tasks widely utilizing 
the possibilities of the international division of labour 
in the interests of peaceful development of all countries 
and nations. 





’ Hungarian Shipyards and Crane Factory. 
7 MOK —the Moscow district circular line 


"Vneshnaya torgoviya" 1983. 


English translation, “Foreign Trade" 1983. 


1812/15 


26 





USSR-CEMA TRADE 


SOVIET SCHOLAR VIEWS PROSPECTS OF CEMA DEVELOPMENT 
Moscow TRUD in Russian 21 Jun 83 p 3 


[Interview with Corresponding Member of the USSR Academy of Sciences Yu. S. Shi- 
rayev, director of the International Institute of Economic Problems of the World 
Socialist System of CEMA, by P. Barabas, special correspondent of the trade union 
newspaper NEPSZAVA (Hungary), and TRUD special correspondent P. Negoitsa: “Looking 
Into the 1980's"; date and place not specified] 


[Text] Corresponding Member of the USSR Academy of Sciences 

Yu. S. Shirayev, director of the International Institute of Eco- 
nomic Problems of the World Socialist System of CEMA, answers the 
questions of the special correspondents of TRUD and NEPSZAVA 
(Hungary). 


[Question] For what will the 1980's in the economic development of the CEMA member 
countries be noteworthy? 


[Answer] It seems to me that in recent years the scientific and technical revolu- 
tion has been developing into an industrial revolution. What do I mean? Not iso- 
lated breakthroughs in the area of science and technology, inventions and new proc- 
essing methods have been occurring before our eyes. Sectors and, in individual 
countries, the national economy as a whole have been changing. In the Soviet 
Union, for example, flexible production systems are being introduced. They will be 
developed in instrument making and the automotive industry. We already have a num- 
ber of subdivisions which have been changed over to a new technical base. Design- 
ing by means of computer equipment is also being introduced in the socialist coun- 
tries. In other words, a radical change is occurring in the technical base of pro- 
duction. And, very likely, this will lead to the shifting of very many emphases in 
our economic development. In this connection it is difficult to overestimate the 
process of the changeover of the national economy of the CEMA countries to the in- 
tensive means of development. Why? Take if only the vital question of shortages. 
As statistics show, many of them are derivatives of one thing--the shortage of new 
equipment and technology. On the basis of the example of Hungary, which is doing 
much for energy conservation, the saving of materiale and fuel, it is possible to 
show that the standards of consumption are still high as compared with the ones 
which are already possible today, if the achievements of world science and tech- 
nology are taken completely into account. 


27 








As General Secretary of the CPSU Central Committee Comrade Yu. V. Andropov noted in 
his speech at the June (1983) CPSU Central Committee Plenum, the main means to the 
qualitative change in the productive forces is the changeover to intensive develop- 
ment, the combination in deed of the advantages of our socialist system with the 
achievements of the scientific and technical revolution, which promises a radical 
technological change in many spheres of production. 


[Question] You have named several, it can be said, global tasks, which the CEMA 
countries plan to accomplish during the next decade. What role is being assigned 
in their accomplishment to the cooperation of the socialist countries? 


[Answer] In responding to your question, I wish to cite a number of examples. Re- 
cently I looked over a selection of new technical decisions in microprocessor engi- 
neering, which is, in my opinion, a unique cross-country vehicle of modern produc- 
tion. There are very interesting decisions in individual CEMA countries. And not 
necessarily in machine building. Take if only the GDR or the same Hungary, where 
the introduction of these achievements in agriculture, transportation and other sec- 
tors is under way. Now it is necessary to solve the problems of microprocessor en- 
gineering on a collective basis. The corresponding agreement is already being im- 
plemented within CEMA. 


Or take computer equipment. If we did not have the corresponding agreement on com- 
puters, today we would experience a definite shortage of them. This would also 
complicate our balances of payments. Successful cooperation has also been organ- 
ized in the area of atomic engineering, without which it is difficult to solve in 
the future the problem of power supply in many countries. 


While analyzing the achievements of our cooperation, we cannot at the same time 
divert our attention from the fact that in a number of countries the growth rate 

of production has slowed. It is clear that it is impossible to increase it by tak- 
ing a purely wait and see position. It is possible to overcome these problems only 
by active economic work, which is aimed at the use of the latest achievements of 
science and technology. By working together, we will be able in the shortest pos- 
sibel time to implement the agreements existing between the CEMA countries and to 
make substantial progress. I want to immediately forestall the erroneous or de- 
liberately false interpretation of our cooperation by some ideologists of the West. 


[Question] Do you mean the assertion that CEMA membership as if is checking the 
cooperation of each individual country with the western world? 


[Answer] Precisely. It is important to expose such assertions, wiich are aimed 

at the deliberate misinformation of public opinion. In CEMA each country is abso- 
lutely sovereign in the choice of a partner for cooperation. But if we take the 
recommendations which the International Monetary Fund is giving its members, they, 
mildly speaking, are simply inconceivable within CEMA. For example, to whom would 
it occur in CEMA to advise Hungary, what structure of plantings it should have? 

It is as if in New York it is more obvious than in Hungary itself, which creates 
this structure of the plantings. Thus, not CEMA, but individual capitalist states 
and their attempts to persistently interfere in the internal affairs of the social- 
ist states are checking the cooperation of the socialist countries with the West. 
Just what is the aspiration of the West to interfere in the affairs of Poland worth? 


28 








The CEMA member countries have always supported extensive all-European and world- 
wide cooperation. But everything in this matter does not always depend on us alone. 


[Question] What can you say about the present economic situation of the countries 
of the community? 


[Answer] Just recently we had quite great increases of various resources. Now the 
situation has changed: in the CEMA countries, it can be said, the model of eco- 
nomic development is changing. This process involves certain costs. But there is 
the possibility on the basis of a planned economy to reduce these costs to a mini- 
mum, Today the results of the change of the model are visible in a number of coun- 
tries. For example, in spite of the difficult conditions, the GDR is maintaining 

a quite high growth rate. Matters in Bulgaria are proceeding much better, from the 
point of view of the internal balance. As a whole the CEMA countries are now in a 
situation, when it is possible to count on the acceleration of the growth rate of 
the economy. Of course, here one must not expect complete synchronism from all the 
CEMA member countries. But it is quite obvious that the acceleration of growth in 
‘some countries will have a positive effect on economic growth in the other coun- 
tries. And, of course, the situation characteristic of the West, where today fantas- 
tic figures of unused production capacities exist, does not threaten us. For fer- 
rous metallurgy alone there is there an underutilization of 230 million tons. Or 
take the level of unemployment. In the socialist countries there are no and will 
be no such costs. 


Among the problems of the economic development of the countries of the community 
during the current 5-year period I would also name the worsening of the conditions 
of trade with the West and the presence of protectionist barriers, which are pre- 
venting individual CEMA countries from paying off their debts, are forcing them to 
appeal for new credits and, consequently, to increase the spiral of debt. But in 
passing | would like in this connection to note the following: I personally do not 
know in the West such countries which would refuse to accept the most modern prod- 
ucts. It is a question, apparently, of whether we have them or not, It is possible, 
of course, to erect barriers for agricultural exports. For example, if the year 
turned out to be good, to force down the prices for agricultural products. The 
monopolies operate cunningly in these cases on the international market. But when 
there are the most advanced technologies in the export assets, here the most cun- 
ning barriers break down. From this standpoint it seems to me that if the CEMA 
countries place the emphasis on new technologies and achieve a technological lead 
in the sectors where the prerequisites exist for this, many barriers will be elimi- 
nated. It is clear that it is possible to accomplish such a task only by collec- 
tive efforts. ’ 


[Question] Perhaps you would cite snecific examples of the successful competition 
of products of the CEMA countries on the world market, in spite of all kinds of 
restrictions on the part of the West? 


[Answer] There are heaps of such examples. If you take the Soviet Union, it is 
possible to name hundreds of items. They also exist in other countries, For ex- 
ample, Czechozlovakia produces processing centers, which in quality are superior to 
similar equipment of the most prestigious West European firms, But here there is 
the following detail. In order to create a sufficiently substantial export re- 
source of technically advanced goods, frequently the potentials of one country are 


29 








not enough. Sometimes some CEMA country develops a new technology and produces 
equipment of world class, but its batch production in this case is limited. There 
is one solution here: to promptly organize cooperation within CEMA in order to 
jointly come out with the latest products on a large scale both on the internation- 
al socialist market and on the western markets. 


Unfortunately, we have examples of missed opportunities. At one time the CEMA 
countries were the first to assimilate new spindleless spinning looms, but did not 
set up series production in sufficiently large quantities, and therefore the con- 
centrated breakthrough of this product onto the world market did not occur. In 
general we need all together to learn not only to work for the domestic market, but 
also to create good export items. For this, obviously, it is necessary to coordi- 
nate more closely the export policy of the countries of the community, including 
their appearances on the western markets. Here it is important not last of all to 
regulate the direct production ties between our countries and to create for the 
realization of these ties, as well as for the formation in necessary instances of 
joint firms the corresponding economic, organizational and legal prerequisites. 
Here we still need to do much. At the same time the countries of the socialist 
community need to orient their economic mechanisms more boldly toward technical 
progress, intensification, as well as the extension of socialist economic integra- 
tion and the development of cooperation and specialization. So far in some coun- 
tries it has been difficult at times to find any system of the stimulation, for 
example, of cooperation. More often you encounter antistimuli. And in some eco- 
nomic mechanisms there are even elenonts which are frankly indifferent to the proc- 
esses of integration and cooperation. 


In conclusion I wish to say the following. Today in the countries of the community, 
according to my observances, the most different versions of the solution of similar 
economic problems are being tested. This is an interesting process. It, of 

course, will enrich our collective experience. But it is necessary to analyze and 
evaluate very seriously every experiment according to its end results. It is the 
dictate of the times to manage economically. I am convinced that the strengthening 
cooperation of the CEMA member countries with the years will promote to a greater 
and greater extent the accomplishment of this socioeconomic and political task. 


As was noted at the plenum, our countries are striving for a qualitatively new 
level of economic integration, without which it is already impossible today to 
imagine the life of the socialist community. 


7807 
CSO: 1825/81 


30 





USSR-CEMA TRADE 


IBB PROJECTS, BALANCES SUMMARIZED 
Moscow FOREIGN TRADE in English No 9, Sep 83 pp 41-42, 44-46 


[Article by Albert Belichenko, chairman of the Board of the International 


Investment Bank] 


[Text] 


In the current five-yeat-plan period 
the socialist communty countries in 
line with the decisions of the Commun- 
ist and Workers’ Parties are fulfilling 
complex and iarge-scale tasks for 
transferring the national economies to 
an intensive way of development. In- 
tensification of the socialist pro- 
duction is accompanied by deepening 
economic and technical cooperation 
and socialist economic integration. 

The present stage of the socialist 
community countries’ economic devel- 
opment is characterized by streng- 
thening production internationa- 
lization and deeper integration ties. 
The decisions of the 26th CPSU Con- 
gress and the congresses of other fra- 
ternal Communist and Workers’ Par- 
ties envisage the furthering of socialist 
economic integration based on the 
Comprehensive programme, long-term 
specific programmes of cooperation, 
multilateral and bilateral agreements 
on specialization and cooperation in 
production aimed at solving vital eco- 
nomic development problems. 

Yu.V. Andropov, General Secretary 
of the CPSU Central Committee, in his 
speech at the ceremonial meeting of the 


CPSU Central Committee, the Su- 
preme Soviet of the USSR and the Su- 
preme Soviet of the RSFSR, December 
21, 1982, pointed out: ‘‘the socialist 
community is a powerful and healthy 
organism which is playing an enor- 
mous and beneficial role in the world 
of today. The mechanism of fraternal 
cooperation encompasses a variety of 
spheres of life in our countries and dif- 
feremt areas of our joint socialist con- 
struction. By pooling our resources we 
are finding increasingly effective ways 
of harmonizing the interests of the 
community with those of each 
member-country."" Yu.V. Andropov 
emphasized that one of the serious 
tasks facing the socialist community 
countries would be provision of ‘'... a 
new impulse to ecunomic integration’. 

In 1982 the socialist community 
countries advanced in strengthening 
the material and technical base of their 


' economies and in perfecting and devel- 


oping their foreign economic relations. 

Sectors assuring acceleration of sci- 
entific and technical progress and 
raising the efficiency of social pro- 
duction (power engineering, machine- 
building industry, electronics, che- 
misiry and petrochemistry) grew at 


31 











outstripping rates. The construction of 
atom power stations moves still fur- 
ther. Large financial means were allo- 
cated not only to cons‘ruct new 
projects but also to technically reequip 
and reconstruct existing production ca- 
pacities. 

Cooperation in investments, includ- 
ing coordination of capital invesimenis 
and joint construction of certain 
projects, expanded. 

With due regard for the above, the 
activity of the International Invest- 
ment Bank (The Agreement on the Es- 
tablishment of the IIB and its statutes 
are published in this issue) is aimed at 
promoting the growth of the Bank 
member -countries’ economic potential 
through participation in realizing the 
tasks stemming from the Comprehen- 
sive Programme of socialist economic 
imtegration, long-term specific pro- 
grammes of cooperation § and 
agreemerts on specialization and co- 
operation in production. At the same 
time the Bank's activity raises the role 
of international socialist credit and ex- 
pands the scope of application of the 
transferable ruble. 

The 11B’s main business is to grant 
credits for: capital construction, create 
new productive assets, reconstruction 
and expansion of existing enterprises’ 
capacities, raise the effectiveness of 
capital investments credited by the 
Bank. 

In 1982 the Bank took on the 
crediting of new projects and allocated 
additional means for financing the de- 
velopment of machine-building in- 
dustry and transport, and also expan- 
sion of the raw material and fuel base. 
Credits are mainly used for assuring 
more efficient capital invesiments in 
reconstruction and technical reequip- 
ping of existing enterprises. 


In Bulgaria it is envisaged, using the 
Bank's credits, to modernize and ex- 
pand the Record complex in Plovdiv 
manufacturing autotrucks, the Star 
factory in Lukovit producing steering 
mechanisms and the Shatorov sto- 
rage-batiery factory in Pazardzhik. All 
these enterprises are included in the 
Transport Engineering which, under 
the CMEA, specializes in manufac- 
turing auto and electrocars and is one 
of the largest producers of these goods 
in the world. 

Modernization and expansion of the 
Record complex included in the 
CMEA member-countries’ Coordi- 
nated Plan for Multilateral Integration 
Measures for 1981-1985 are of great 
importance for meeting the CMEA 
member-countries’ demands for 
truck-loaders and also for developing 
Buigaria’s national economy. By 1985 
the complex’s output will substan’ ially 
increase as well as its export to the 
CMEA member-couniries. 

The Bank's cred used for ex- 
panding the Star factory's production 
(Lukovit) is to increase the output of 
steering mechanisms for completing 
auto and electrocars manufactured in 
Bulgaria and to create steering me- 
chanism production for completing 
MAZ lorries made at the Minsk Motor 
Works in the Soviet Union and 
supplied, in particular, to the CMEA 
member -countries. 

The Shatorov storage-batiery fac- 
tory in Pazardzhik will increase the 
output of batteries with higher techni- 
cal and quality parameters for elec- 
trocars and for automobiles and mo- 
torcycles. The aim is to double their 
service life. Besides meeting Bulgaria's 
requirements export growth to the 


32 











CMEA member-countries is envis- 
aged. 

The deepening of the CMEA 
member-countries’ economic coop 
eration and the steady growth of mutu- 
al tsade put higher claims on transport 
assuring goods shipping on which, toa 
great extent, the development and 
proper interaction of the socialist eco- 
nomic sectors depend. 

The International Investment Bank 
participates in undertakings for re- 
constructing and changing major, in- 
to electric traction and thei outfitting 
with up-to-date automatic locking 
systems and communication means as 
well as for increasing the traffic-cars- 
ying capacity of transshipping stations. 
Under the CMEA member-couniries’ 
long-term specific programme of co- 
operation in developing transport 
communications the Bank, in 1982, 
granted new credits to the enterprise, 
Hungarian State Railways. The change 
over the Budapest-Pecs line to electric 
traction will substantially expand the 
possibilities of transit cargo shipping 
via Hungary, the Hungarian goods 
shipment volumes will grow, the speed 
of freight and passenger trains will in- 
crease and the freight trains’ load ca- 
pacity will become higher. 

Hungary using the Bank's credits, 
granted earlier, reconstructed some 
sections of railways, equipped them 
with automatic locking sysiems, con- 
siructed secondary tracks and also 
adapted some lines to electric traction; 
the developmem of the Zahony 
transshipping centre continued. 

in Bulgaria the International Invest- 
meri Ba: credits are for construction 
of the Sofia-Varna, Varna-Burgas and 
Burgas-Sofia highways. First-class 
highways are of great consequence for 


the developing of Bulgaria's economy. 
Moreover, part of the Sofia-Varna 

highway is included in the inter- 
national Moscow -Kiev-Kishinev- 
Bucharest-Sofia motorway, to be built 
under the CMEA member-countries’ 
long-term specific programme of co- 
operation in devcloping transport 

Lasi year the IIB continued to credit 
ca-..et accepted projects in the ma- 
chine-building, chemical and other in- 
dusiries manufacturing products in 
which the CMEA member-couniries 
are imteresied. 

The advanced development of 
Hungary's aluminium industry is an 
example of efficient utilization of the 
Bank’s credit. This country has large 
bauxite reserves. However, a deficit of 
economic power resources required for 
producing aluminium retarded the 
aluminium industry’s development. 
Thanks to the USSR-Hungary frater- 
nal cooperation, however, this prob- 
lem has been overcome. In line with 
the existing agreement Soviet en- 
terprises annually process Hungarian 
alumina and the produced aluminium 
returns to Hungary. In repayment for 
the services rendered the USSR re- 
ceives Hungarian goods needed for its 
economy. The Bank's credits promote 
fulfilmem of the Soviet-Hungarian 
agreement in both countries’ interests. 

The expansion of the Hungarian 
Ikarus factory manufacturing buses, 
very competitive on the world market, 
using the Bank's credit, is very im- 
portant to Hungary and the CMEA 
member-countries. This factory syste- 
matically introduces new modifi- 
cations to its output meeting the up- 
to-date requirements. The Ikarus fac- 
tory maintains close cooperation ties 
with the Likino bus factory (the USSR) 


33 





and a number of enterprises in the 
GDR and Czechoslovakia. At present 
Ikarus buses carry passengers in more 
than forty countries. Large numbers of 
buses manufactured at the factory run 
on the roads in the USSR and other 
CMEA member-countries. 

The Ganz Mavag machine-building 
constructed and expanded using the 
11B’s credit, participates in realization 
of an Agreement on Multilateral Inter- 
national Specialization and Coop- 
eration in Production of Equipment 
for Atomic Power Stations. The in- 
vesiments will increase the production 
volume at this enterprise and goods 
deliveries to the European CMEA 
member -countries. 

The 11B's cooperation with the GDK 
is fruitfully progressing. The Bank 
granted a series of credits for ex- 
panding and reconstructing the exis- 
ting machine-building enterprises, 
among which is the Umformtechnik 
complex manufacturing press-forging 
equipment, the Fortschritt-Land- 
maschinen agricultural machinery 
complex, the Polygraph complex, the 
Scharfenstein works and the Ernst 
Thalmann heavy engineering complex. 

Equipment with the trade-mark of 
the Umformtechnik complex is used at 
automobile enterprises in the USSR, 
Czechoslovakia, Hungary, Romania 
and a number of capitalist and devel- 
oping countries. The modern products 
of this enterprise being manufactured 
thanks to the reconstruction of the 
complex on the basis of the Bank's 
credit are of great demand on the 
world market. Over ninety per cent of 
the products increase has been 
achieved due to the growth of labour 
productivity. 

The Fortschritt-Landmaschinen 
complex opecializing in manufacturing 


agricultural machinery is being 
successfully reconstructed and ex- 
panded. By its productive capacity it is 
one of the largest and most important 
enterprises within the CMEA 
member-countries’ framework. 

Due to new capital investments the 
production volume at the Polygraph 
printing machine complex will more 
than double and products deliveries to 
the CMEA member-countries will in- 
crease over five times. The further 
automation of ofiset machines using 
microelectronic facilities will consider- 
ably improve printing quality. 

The Scharfenstein enterprise manu- 
factures hermetically sealed refrigerant 
compressors and freezers, meeting the 
highest requirements from the point of 
view of quality. For the manufacture 
of these products the enterprise was 
awarded the honoured name: Factory 
of Excellent Quality. 

The expansion and modernization 
of productive capacities of the Ernst 


Thalmann heavy engineering complex, 
a large producer of rolling equipment, 
equipment for the building material in- 
dustry, cable industry and equipment 
for producing protein foodstuffs from 
oil-bearing seeds, is of great importan- 
ce for the CMEA member-countries. 
At the Leipzig Spring Fair, 1983, the 
1IB’s customers, mainly those in the 
German Democratic Republic, were 
among the exhibitors. For a high sci- 
entific-technical level their products 
were awarded gold medals. The Ernst 
Thalmann complex (Magdeburg) now 
turning out highly productive machine 
tools for rolling wire and steel sheet is 
among the enterprises presented with 
awards. Of great interest were: ma- 
chines manufacturing glass light guides 
for communication facilities made at 


the Magdeburg complex. 


34 











Gold med.ids were also awarded to 
items manufaccured by the Umform- 
technik, Fortschritt-1 andmaschinen. 

The IIB granted credits to the Re- 
public of Cu'sa for constructing sugar 
mills directly re'azted to the fulfilment 
of a long-terr «pce fic programme of 
cooperation in agriculture and the 
food industry. Such factories will pro- 
mote the further comprehensive devel- 
opment of Cuba's sugar industry and 
sugar export growth. 

Several credits were granted for the 
construction of new and reconsiruc- 
tion and expansion of existing 
chemical enterprises among which in 
the Socialist Republic of Romania are: 
the Giurgiu factory manufacturing 
caustx soda and chlorine derivatives, 
the Borzesti woprene rubber factory, 
an installation for manufacturing Me- 
lana polynitrileacryl fibre at the 
SAvinesti synthetic fibre factory; in the 
Crechoslovak Socialist Republic: a 
plant producing aniioxidant used for 
manufacturing tyres, conveyer belts, 
hoses and other rubber items at the 
Duslo Sala chemical complex. 

The International Economic Asso- 
ciation Interatominsirument uses the 
11B’s credits for expanding the volume 
of work on instrument and nuclear fa- 
cilities servicing. 

The credit granted for moder- 
nization and expansion of the Tang 
trol factory (Yugoslavia) manufac- 
turing products important for the 
automobile industry is being success- 
fully realized. This credit is a clear in- 
dication of the widening use of the 
transferable ruble and inclusion of a 
country which is not a member of the 
International Investment Bank or the 
International Bank for Economic Co- 
operation into the sysiem of mul- 
tilateral settlements in this collective 


currency. 


In 1982 the credits granted in the 
previous years for the construction of 
the Soyuz gas pipeline, the Chic 
member-countries’ largest integration 
project, were repaid. From use of the 
11B’s credits a considerable portion of 
ies we financed as well as construc- 
tion-assembly work and mutual 
services fulfilled by the participating 
countries. Through putting this large 
complex into operation the countries 
engaged in its construction obtained 
tens of thousands of millions of cubic 
metres of valuable raw material. 

At the 33rd meeting of the Bank's 
Board (April 1983) a new project— 
Modernization and reconstruction of 
the V. Kolarov diesel engine complex 
in Varna (Bulgaria) was accepted for 
crediting. The new capital investments 
will considerably increase diesel pro- 
duction. A high level of automation 
and mechanization of the production 
process is assured. 

Since the deginning of its activity the 
International Investment Bank has 
credited 83 projects estimated at about 
10 thousand millions transferable 
rubles. The total sum of credits gra- 
nted to the CMEA member-countries, 
Yugoslavia and the International Eco- 
nomic Association Interatomin- 
strument exceeded 3,500 million trans- 
ferable rubles. About 70 per cent of the 
credits went to the development of the 
fuel-power indusiry, 19 per cent— 
machine-building industry and elec- 
tronics, 9 per cent—metallurgy and 
chemistry and 2 per cent—for trans- 
port and communication development. 


The majority of the projecis being 
credited are functioning enterprises. 
They are reconstructed and expanded 
without stopping production and this 
makes it possible to continually in- 
crease the products output and exports 


35 








such as: faience tiles, refrigerating 
plants and compressors from Bulgaria; 
comfortable buses, aluminium semi-fi- 
nished products, cable products and 
textiles from Hungary; press equip- 
mem, agricultural and printing ma- 
chines from the GDR; washed wool 
from Mongolia; brake devices for vehi- 
cles from Poland; railway waggons 
and chemical products from Romania; 
natural gas from the USSR and lorries 
with a high cross-country capability 
from Czechoslovakia. 


All in all in 1972-1982 the projects 
credited by the Bank exported various 
products to the CMEA member-coun- 
tries worth approximately 15,000 mil- 
lion transferable rubles. These projects 
also supply their manufactures to the 
industrial capitalist and developing 
countries. The International Invest- 
ment Bank's activity promotes the de- 
velopment of the CMEA member- 
countries’ export potential as a basic 
source for obtaining convertible cur- 
rency to repay imports bought from 
the capitalist countries. 


At present 56 projects have been put 
into operation, the construction of 
which was undertaken on the basis of 
the '1B’s credits. In 1982 these projects 
exported finished products, whose 
characteristics meet the lates: scientific 
and technical demands, worth 3,700 
million transferable rubles. 

Four projects credited by the Bank 
were commissioned in 1982. The re- 
consiruction and expansion of 
workshops at the Hungarian cable fac- 
tory (Budapest) were completed, as a 
result cable and wire output increased 
and deliveries of communication 
equipment, laboratory instruments 
and other facilities grew. Lines manu- 
facturing equipment for making ce- 
ment and crushers were put into ope- 


36 


ration at the Ernst Thalmann heavy 
engineering complex. Modernization 
of equipment and expansion of pro- 
ductive capacities at the Tatra factory 
in Koprzhivnice (Czechoslovakia) were 
completed. Tatra-815 lorries with a 
large load capacity and high per- 
formance characteristics which work 
faultlessly in severe climates are being 
mass produced. Products manufac- 
tured at this enterprise are made to the 
world’s best standards and are expor- 
ted to many countries. 

The CMEA member-countries’ mul- 
tilateral cooperation in material pro- 
duction is to @ greater extent being ori- 
ented on solving large pressing prob- 
lems concerned with supplying their 
economies with fuel-power and raw 
material goods, machinery and equip- 
ment, agricultrual produce and food- 
stuffs, consumer goods and also with 
the development of transport commu- 
nications. Multilateral and bilateral 
agreements are being elaborated and 
implemented, Their purpose is to 
complete the undertakings envisaged 
in long-term specific programmes of 
cooperation. All CMEA member- 
countries’ economic successes are 
directly due to the further expansion 
and deepening of socialist economic in- 
tegration. 

The role of foreign trade in devel- 
oping the CMEA member-countries’ 
economies is increasing. The ac- 
celerated expansion of the machinery 
and equipment foreign trade in the ma- 
jority of these countries witnesses the 
further deepening of international spe- 
cialization and cooperation in pro- 
duction. 

The results of the 36th CMEA Ses- 
sion indicated that a significant step 
had been made on the way towards 
intensification of the CMEA 
countries’ economies on the basis of 











the further deepening of socialist eco- 
nomic integration. 

The 36th CMEA Session adopted 
the Programme of Coordination of the 
CMEA Member-Countries’ Economic 
Plans for 1986-1990. The Programme 
envisages a wider use of the IIB’s 
credits for implementing the integ- 
ration undertakings. For this purpose 
in the course of coordinating their 
plans the CMEA member-couniries 
will elaborate and inform the Bank of 
possible projects which would promote 
specialization and cooperation in pro- 
duction, etc. The IIB will consider 
these projects when determining the 
main directions of its activity and 
drawing up five-year plans. 

In the course of preparation of draft 
agreements, aimed at fulfilling specific 
_ integration undertakings, the CMEA 
member-countries will specify and co- 
ordinate their deliveries of machinery, 
equipment and materials for the 
projects credited by the Bank as well as 
counter-deliveries for their repayment. 
These deliveries will be stipulated in 
the corresponding section of the Coor- 
dinated Plan for Multilateral Integ- 
ration measures, in special sections of 
long-term trade agreements and in the 
annual protocols on trade turnover. 
They will also be taken into account in 
the integration sections of the CMEA 
member-countries’ State plans of so- 
cial and economic development in line 
with their national legislation. 

Yu.V. Andropov at the Novem- 
ber (1982) Plenary Meeting of the 
CVSU Central Committee stressed that 
it was necessary to make the fraternal 
countries’ cooperation and socialist 
mutual assistance deeper and more ef- 
ficient also in the joint fulfilment of 
scientific, technical, industrial, trans- 
port, power engineering and other 
tasks. 


37 


The importance of the socialist 
states’ closest cooperation increases es- 
pecially in the present world situation. 
The CMEA member -countries’ further 
transition to intensive development 
presupposes selection of the most effi- 
cient ways of specialization and coop- 
eration in production and rational 
utilization of the CMEA member- 
countries’ economic potential with 
simultaneous perfection of the me- 
chanism governing their economic co- 
operation. 

The International Investment Bank 
will continue to actively assist the de- 
velopment of the fraternal socialist 
countries’ economies, promote imple- 
mentation of tasks further improving 
the CMEA member-countries’ cur- 
rency-financial relations, deepen so- 
cialist economic integration and also 
expand mutually beneficial economic 
cooperation with other countries. 

The International Investment 
Bank's further activity will help solve 
the general creative problems facing 
the socialist community as a whole and 
individual CMEA member-countries. 

The International Investment Bank 
constantly places stress on deepening 
and improving business cooperation 
with the Council for Mutual Economic 
Assistance, the International Bank for 
Economic Cooperation and other in- 
ternational organizations and banks in 
the CMEA member-countries and Yu- 
gosiavia, Ties with international and 
regional financial and crediting organi- 
zations and banks in the industrial 
capitalist and developing countries are 
progressing. 

We are sure that under the present 
complicated international situation the 
activity of the International Invest- 
ment Bank will be of still greater signi- 
ficance in developing the fraternal so- 
cialist countries’ cooperation. 





"Poreign Trade” 1983 

















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TRADE WITH IMDUSTRLALIZED COUNTRIES 


SOVIET-WESTERN LICENSING ACREEMENTS DETAILED 
Moscow FOREICN TRADE in English No 9, Sep 83 pp 2-5 


{Article by Yladislav Malkevich, D. Sc. (Econ.), deputy minister of the USSR 
Ministry of Foreign Trade] 


[Text] 
A noteworthy feature of present-day international 


economic relations’ intensification is the continually ex- 
panding specialized and cooperated manufacture and 
research. Growing more sophisticated in form the tradi- 
tional trade links increasingly assume the character of 
long-term extended industrial cooperation between 
various countries’ partners. 

The vast scopes and complexity of the challenges 
facing science and technology today need huge labour and 
financial resources and form the objective pre-condition 
for the concentration, on an international scale, of the 
partners’ production, scientific and technical potentials. 

International industrial cooperation is one of the main 
and a most dynamic factor of the world’s expanding 
imtegration processes. The Final Act of the Helsinki Con- 
ference on European Security and Cooperation em- 
phasized the need of developing industrial cooperation 
and, in particular, the following specific forms: joint 
manufacture and marketing; cooperation in building in- 
dustrial complexes; exchange of know-how, patents and 
licences; and joint industrial research. 

These forms of cooperation are an effective means for 
taking care of complicated scientific and technical prob- 
lems. They are being given increasing emphasis and place 
in the structure of Soviet foreign trade transactions 
adding to and helping extend the traditional trade rela- 
tions with foreign countries in general, and organizations 
and firms in the industrial Western nations in particular. 


39 














Soviet organizations’ relations with their foreign part- 
ners in the sphere of industrial cooperation are wide and 
varied, but their most characteristic feature is that they 
are, as a rule, long-term and designed to improve product 
quality standard: through coordinated scientific, techni- 
cal, production and commercial activity. 

The unified technical and standardized facilities form 
the basis of the partners’ industrial cooperation. Progress 
was initially made in the field of licence agreements which 


were conducive to quick exchanges of R & D results, 
technical, technological and other documentation. 


Soviet licence trade is developing faster than the 
commodity trade and it is now an independent and stable 
foreign trade activity. 

In 1976-1980 the average annual rates of growth of 
Soviet licence exports amounted about 20 per cent, and 
the foreign exchange earnings over this period exceeded 
6.5 times the receipts in all the preceding years. 

More than 20 Western countries are making goods 
today under Soviet licences. Over 30 per cent of the 
licences sold are bought by the USA, Japan, the FRG, 
France, Great Britain and Italy. 

Many Western countries are well aware of the follow- 
ing Soviet inventions: underground gasification of coal; 
dry quenching of coke; transpiration cooling of blast 
furnaces; horizontal type continuous steel teeming; 
medicinal eye films; modicines—carminomycene, <- 
mozine, nonakhiazine, etc. Since 1975 over 100 export 
licence contracts are signed annually with Western firms. 

A series of new licence agreements for prospective 
Soviet inventions was signed in 1982, including contracts 
with Voest-Ailpine (Austria) and Krupp GmbH (FRG) for 
converter gun spraying. Contracts provide for the transfer 
of information on the composition of a refractory fluid 
compound, the devices for and the techniques of its 
spreading on the internal surface of a converter to patch 
up and restore its lining to normal. The new process 
enables repairs to be made between smelts and prolongs 
converter life 20 to 30 per cent. 

The Japanese firm Kensetsu Kikai Chosa purchased a 
licence for an original reinforced concrete hollow pile 
setting installation with special vibrators which makes it 
possible to complete deep foundations almost twice faster 
and substantially cut operating costs. 


40 











The MAN-GHH firm bought a licence for the N-650- 
21-2 natural gas compressor for 25MW gas pumps used 
on large-diameter pipelines. The pumps have high techni- 
cal and economic performance characteristics and can 
operate in extreme climates. Their design is based on 
absolutely new solutions resulting from over 30 patented 
inventions. 

‘Engineering’ services are being increasingly the 
subject in Soviet licence transactions with Western firms. 
These services may be a constituent part of large projects, 
or the subject of independent agreements. For example, a 
complex of designing, exploratory, assembly and con- 
struction services has been offered in addition to manu- 
facturing rights and transfer of technical and know-how 
documentation to the following firms under respective 
licence agreements: Sumitomo, Japan (a system of pipe- 
line transport); American Magnesium, USA (magnesium 
diaphiragmiess electrolyzers); Broken Hill Associated 
Smelters, Australia (reprocessing of compound lead-zinc 
concentrates); etc. 

The agreements with Holiming, Wéa&rtsilé, and 
Rauma-Repola provide exclusively for ship testing 
services in an experimental model basin. In the past 
several years quite a number of ships have been tested on 
Finnish firms’ orders. 

Other forms of licence agreements are also in active 
use. 
For the first time in the history of Soviet foreign trade 
associations Licensintorg concluded an agreement with 
the Indian space research organization, ISRO, on pro- 
viding services related to the launching of an Indian-made 
earth satellite by a Soviet rocket carrier. 

Also a new experience for our organizations was the 
sale of leasing licences to Drilex U.K. (Great Britain) and 
Drilex Overseas (the Bahamas) for screw-type hydraulic 
engines for drilling oil and gas wells. Instead of granting 
the licence holder, as is usually the case, the right to 
manufacture and sell the respective equipment, was mo- 
dified enabling him to lease it and transfer an agreed per 
cent of royalties on its use to the Soviet licence owner. 

The Soviet Union also makes active use of the latest 
achievements of foreign science and engineering. In the 
past two decades it has purchased some 700 licences. The 
major partners are West German, French, British, 


41 








Austrian and Italian firms. Using their know-how the 
Soviet Union makes the following equipment and pro- 
ducts: medium-speed marine diesel engines (Picistick, 
France); railway track repair machines (Plasser und 
Theurer, Austria); powerful thyristors (Siemens, the 
FRG); torque d.c. electric motors (Fanuc, Japan); sprink- 
ling machines (Valmont, USA); high-productivity flour 
mill equipment (Bohier, Switzerland); chioroprene from 
butadiene (Power Gas, Great Britain); etc. 

Among the licence agreements concluded in 1982 men- 
tion can be made of the following: manufacture of electric 
arc steel-melting furnaces (Krupp, the FRG); regulated 
plate pumps (Rexrot, the FRG); spherical graphited cast 
iron gas pipes (Tiroler ROhren und Metallwerke, Austria); 
large-size bearings (Rothe-Erdeschmiedag, the FRG); 
multifunctional electromechanical devices for processing 
food wastes (Merioni Progetti, Italy); mechanical 
treatment of graphite-coated electrodes (Tractionel, 
Belgium); and a series of production processes for the 
automotive industry. 

In the 1970s industrial cooperation on a compensation 
basis played an important part in Soviet trade with capi- 
talist countries. Compensation arrangements envisage de- 
liveries by foreign partners on the basis of their long-term 
credits of equipment, machinery, materials and licences 
for the construction of large enterprises. The credits and 
interest on them are to be repaid in products of the built 
enterprises to their full worth within 10 to 15 years. 

So far compensation agreements have been signed for 
the construction in the Soviet Union of over 60 chemical, 
petrochemical, oil, gas, timber, and pulp-and-paper 
projects. This type of contracts has been signed with 
Austrian, Italian, West German, French, Japanese, US 
and other Western firms and are worth hundreds of 
millions and even thousands of millions of dollars. Ma- 
jority of these projects are well known and have been 
repeatedly mentioned in Soviet and Western press, among 
them are: development of large timber resources in the 
Far East and Siberia; exploitation of the South-Yakutian 
coal-field; cil and gas prospecting and extraction from the 
Sakhalin Island shelf; construction of the Oskol metallur- 
gical complex and the export gas pipeline project. 

In the past decade Soviet organizations and enterprises 
have been increasing their participation in production 


42 





cooperative relations with industrial western firms. And 
though the number of such cooperative projects is not yet 
large, the usefulness of this form of industrial coop- 
eration has become quite obvious. 

Cooperation in production and the trade in licences 
accelerate the production of progressive technologies, 
raise the efficiency of social production and create ad- 
ditional export resources. At the same time it is a higher- 
level form of cooperation which presupposes, along with 
the engineering and technical interaction of partners, 
unification of the applied technologies and arrangement 
of production, synchronization of the partners’ efforts 
and production activities on the basis of specialization, 
coordination of sales and after-sale services and measures 
for the legal protection of industrial property. 

Cooperation between Soviet organizations and firins 
of capitalist countries is accomplished under long-term 
agreemenis (5 to 7 years) which Soviet foreign trade 
associations are parties to. As a rule, the agreements cover 
two main stages of cooperation: preparation and organi- 
zation of the manufacture of cooperated products based 
either on jointly developed technology or the technology 
of one side; and the manufacture and sales of products 
based on coordinated specialization and mutual deliver- 
es. 

The two following contracts are examples of coop- 
eration founded on Soviet technologies: manufacture of 
Shirek-I type machines for comprehensive mechanization 
of coal mining operations (Scharf GmbH, the FRG) and 
manufacture of the UPS-301 type plasma welding equip- 
mem (Northern Engineering Industries, Great Britain). 


The technical documentation for the Shtrek-1 machine 
was handed over on a licence basis to Scharf where 


alterations were made to the original design to acco- 
modate West German hydraulic systems and elec- 
trotechnical components; cooperated manufacture was 
then started in keeping with the agreed specialization. 

A similar procedure was followed in cooperated 
manufacture of the UPS-301 equipment developed in the 
Soviet Union. 

More and more often the mastering of production of 
Western-licensed goods in the Soviet Union is the begin- 
ning of cooperative relations with Western firms. 


43 





An agreement on cooperated manufacture and coordi- 
nated sales of concrete auto pumps (capacity—80 cu.m 
per hour) with Stetter of the FRG has been operative since 
1977. Manufacture of the pumps is based on the technical 
and technological documentation of the firm Stetter. 
Proceeding from their annual production programmes 
the sides regularly sign commercial contracts on the mutu- 
al deliveries of assemblies and parts for the pumps. Each 
side has full freedom to assemble and mount pumps on 
their own chassis. 

The close production and commercial ties and the 
economic benefits accruing from the cooperation encou- 
raged the partners to complete new agreements—on coop- 
erated manufacture of mixer trucks and permanently 
sited concrete mixers. 

Good progress has been achieved in cooperated manu- 
facture of passenger car safety belts fitted with enertia 
spools with the Swedish firm Steel Industry. The contract 
provides for annual mutual deliveries of completing parts 
on the agreed specialization. These safety belts are fitted 
to the Soviet-made Lada cars and West European models. 

Sport shoes made by the Moscow Sport factory in 
cooperation with the West German firm Adidas are in 
high demand in the Soviet Union and abroad. The firm 


handed over to its Soviet partner the technical documen- 
‘ation (know-how) and the right to use its trade mark. 
'i2ss production in the Soviet Union began in less than a 
year and the sides started mutual deliveries: finished pro- 
ducts (130,000-150,000 pairs of shoes per annum) from 
the Soviet Union to the FRG, and a number of completing 
parts and materials from West Germany to the Sovies 
Union. 

As the role of science in production grows cooperation 
more and more extends to research and development, and 
experimental manufacture. An example of this type of 
cooperation is Licensintorg'’s agreements with the French 
firms Thomson-CSF and S.F.1.M. on the joint devel- 
opment of a future air navigational complex to control 
flights in heavy traffic, ease the work of crews and air 
control personnel in airports, as well as make flights 
safer. The agreements were concluded when the design of 
the equipment was about to begin, i.c., at the moment of 
passing over to the practical implementation of the idea. 





Soviet and French specialists jountly developed and tested 
prototypes of air navigational complexes and their ground 
programming and servicing sysiems. 

Long-term, multilateral economic, «ientific and 
technical relations of the Soviet Union with Western 
countries were a notable feature of the 1970s. 

The achieved scale of trade and technological ex- 
changes between the Soviet Union and the Western 
countries have formed the objective prerequisites for the 
further extension of industrial cooperation in various 
forms. 

At the same time recent years have witnessed increas- 
ing attempts of certain Western, specifically, US circles to 
hamper and limit the economic intercourse between the 
East and the West. This was also the aim of new amen- 
dments made to the US export control regulations intro- 
duced in the late seventies and the early eighties. Such a 
policy complicates the development of international in- 
dustrial cooperation and introduces destabilizing el- 
ements into trade and economic relations between states. 
Against this background the Soviet Union continues to 
follow a realistic, objectively justified line for mutually 
profiiable cooperation that meets the interests of all 
nations. The future belongs to this course. 


COPYRICHT: ‘“Vnesnaya torgoviya” 1983. 
English translation, “Yoreign Trade” 1983. 


CSO: 1812/15 





TRADE WITH LDC'S 


ECONOMIC, TECHNICAL COOPERATION OF THE SOVIET UNION WITH DEVELOPING COUNTRIES 


Moscow EKONOMICHESKOYE SOTRUDNICHESTVO STRAN-CHLENOV SEV in Russian No 5, May 83 
pp 64-71 


[Article by Tadeush Teodorovich, deputy director of the Scientific-Research 
Institute of USSR Economic and Technical Cooperation with Foreign Countries, 
USSR State Committee for Foreign Economic Relations: “The Soviet Union's 
Economic and Technical Assistance to the Developing Countries") 


[Text] Within the general system of the USSR's economic ties with the young 
states of Asia, Africa and Latin America, those forms of cooperation which go 
beyond the framework of tsaditional foreign trade and which ensure that a high 
degree of effectiveness and mutual benefit are derived from these ties acquire 
ever greater significance. This applies first of all to the economic and 
technical assistance which the Soviet Union extends to the developing countries 
in strengthening their national economies, in building industrial enterprises 
and power plants, agricultural and transport facilities, in carrying out 
geological prospecting work, in training personnel, etc. 


While carrying out prospecting and planning work, while supplying entire equip- 
ment units, while building and performing installation work and while providing 
for the opening and normal functioning of facilities, USSR organizations estab- 
lish long-term economic relations with the developing countries: these rela- 
tions are realized not only in the circulation sphere but also in the area of 
capital construction and material production. Cooperation of this kind con- 
tributes actively to the progressive restructuring of the economies of the 
developing countries, and it exerts a profound effect on the development of 
their production forces and the resolution of social problems. It helps to 
strengthen the economic independence and the foreign exchange-financial position 
of the developing cvuntries, as well as their positions in the struggle against 
the forces of imperialism and reaction. 


At the same time economic and technical assistance and deliveries of entire 
equipment unite serve as forms for the expansion of our machinery and equipment 
exports; this is completely in line with the task set by the 26th CPSU Congress 
of improving the structure of Soviet exports, especially by increasing the 
production and delivery of machine-building products and other manufactured 

items which meet foreign market requirements. In the last two decades deliveries 
of entire units have ranged on average from 50 to 60 percent of the total volume 


46 





of Soviet machinery and equipment exports to the developing countries, and for 
certain countries the percentages are even greater. For example, in the late 
70's, this figure reached about 90 percent for Algeria and Iran, 80-85 percent 
for Turkey, and 60-70 percent for India and Afghanistan. 


The Soviet Union receives as payment for the complete equipment units and 
technical documentation which it supplies and for the work of the specialists 
which it sends abroad various goods which are essential for our economy, such 
as minerals, fuel, tropical food products and finished industrial goods, in- 
cluding goods from enterprises built with the USSR's economic and technical 
assistance. In this way the practical realization of the principles of equal 
rights and mutual benefit is ensured. The USSR achieves this not by parti- 
cipating in the profits from enterprises built with its assistance or by re- 
ceiving any privileges or concessions, but through the usual commercial channels 
by utilizing the advantages of the international division of labor. 


The expansion of the USSR's economic and technical cooperation with the de- 
veloping countries is taking place at a rapid rate. In the mid-50's the first 
inter-governmental agreements establishing this kind of cooperation were signed 
with Afghanistan and India, and by late 1982 they had been signed with 66 
countries. 


By the start of 1982, the number of projects involving cooperation between the 
Soviet Union and the developing countries had reached 1,271; work had been com 
pleted on 705 of these. They included 310 industrial enterprises, including 
electric power plants with an established capacity of 7.7 million kilowatts, 
metallurgical plants for smelting 12.4 million tons of cast iron and 10.2 
million tons of steel, facilities for the extraction of 67.5 million tons of 
petroleum, 4.8 million tons of coal, 13 million tons of iron ore and 2.5 million 
tons of bauxite per year, as well as cement plants with a capacity of 1.6 
million tons of cement. The following have also been put into operation: 

75 agricultural facilities, 76 transportation and communications facilities, 
149 educational establishments, 12 hospitals and polyclinics, etc. 


There are many indications of the great significance which all of these facili- 
ties have for the economies of the developing countries. For example, in 1981 
about 7.5 million tons of cast iron, 5.7 million tons of steel, and 205,000 
tons of aluminum were smelted at cooperation facilities already in operation; 
the total output of electric power exceeded 33 billion kilowatt hours, which 
amounted to a 1,7-fold increase over 1975. These facilities were responsible 
for 65 percent of Syria's total electric power output, for Afghanistan the 
figure war 60 percent, for Iraq it was 55 percent, for Morocco 23 percent, and 
it was about 15 percent for India, Bangladesh and other countries. The Soviet 
Union helped to establish a national petroleum extracting industry in India 
and Syria, as well as a gas industry in Afghanistan; this had made it possible 
for these three countries alone to have produced 175 million tons of petroleum 
and 47 billion cubic meters of natural gas by the start of 1982. 


In the area of agriculture note should be taken first of all of the constructicn 
of major hy¢drosystem: and irrigation structures in a number of countries; as a 
result of cooperation with the Soviet Union conditions have been established 
for the irrigation of more than 3 million hectares of new lands. 


47 





The training of national personnel constitutes an important direction in foreign 
assistance. in the years of cooperation up to 1 million citizens from the 
developing countries of Asia, Africa and Latin America have received training 
and obtained high-level qualifications with the assistance of Soviet specialists 
during the construction and operation of facilities, in educational establish- 
ments created with USSR assistance or in Soviet secondary and higher educational 
institutions or Soviet enterprises. 


The Soviet Union’s economic and technical assistance is not only being expanded, 
but it is also being steadily improved: it is being enriched with new content 
and forms. Specifically, the last decade has seen the ever broader application 
of the following practices: construction of facilities in the developing 
countries under contract conditions and cooperation based on compensation prin- 
ciples. The transition to long-term agreements, programs and multilateral re- 
lations has been stepped up. Overseas assignments by such categories of 

Soviet specialists as advisers and consultants have acquired great significance, 
and production cooperation with USSR enterprises on the basis of facilities 
built with Soviet assistance has begun to develop. 


Construction under contract conditions typically requires that in addition to 
providing the technical documentation, equipment and materials, the contracting 
company must use its own means and specialists to carry out all construction 
and installation work and hand over to the customer the completed facility 
ready for use. Moreover, the company has legal and material responsibility 

for the work completion deadlines and the quality of the work performed, which 
is determined on the basis of the results obtained from the operation of the 
facility during the warranty period. . 


The most important facilities which have been built under contract conditions 
or are presently under construction by Soviet organizations in the developing 
countries include metallurgical plants in Algeria and Nigeria, electric power 
plants in Iraq and Iran, pipelines in Iraq, Nigeria, Libya and Algeria, grain 
elevators in Iraq and Iran, educational centers, a cement plant and oil fields 
in Iraq, an atomic research center, petroleum borehole installations and an 
electric power transmission line in Libya. 


By the start of 1971 the Soviet Union's economic and technical assistance ob- 
ligations to the developing countries included 30 contract facilities, which 
represented 2.8 percent of total volume in terms of cost, but by 1982 the number 
of facilities had reached 150, and their cost accounted for 35 percent of the 
volume of assistance stipulated in already concluded agreements and contracts. 


By the start of 1982 Soviet organizations had completed work in the developing 
countries on the construction of 63 contract facilities, include 19 in Iraq, 
three each in Iran and Algeria, two each in Afghanistan, Libya and Guinea. 
Contract work is continuing on the erection of 24 facilities in Iraq, 14 in Iran, 
and eight each in Libya and Afghanistan. 


The growing significance of construction carried out on contract facilities 
in the developing countries and the working conditions which have developed in 
some countries present Soviet foreign-economic and construction-installation 


48 














organizations with the task of increasing in every possible way the effective- 
nese of contract construction, which is a very crucial and complex form of 


cooperation. 


Specifically, the completion of the tasks in this area calls for uniting the 
efforts of the construction-installation organizations of the Soviet Union 
and the other CEMA member countries. For example, one can take note of the 
positive results of cooperation between Soviet and Bulgarian organizations 
in the construction of facilities in Libya, and of cooperation among Soviet, 
Hungarian and Polish organizations in Iran. 


Ever increasing attention is being given to cooperation carried out under ex- 
port conditions, i.e., when the USSR receives a portio’: of output obtained at 
facilities established with our assistance (compensation agreements). In the 
first stages of cooperation with the developing countries the enterprises were 
built mainly to satisfy the needs--which arose during the process of econor‘c 
growth--of the population and of domestic production and to replace imports. 
But in the subsequent period ever greater attention has been devoted to the 
construction of enterprises which turn out products for export. The export 
industrial sector, which is an organic component of the national economies 

of the developing countries, also satisfies the needs of the partner country. 
This approach leads to the development and expansion of cooperation on 4 com 
pensation basis. 


The advantage of establishing in the developing countries special-purpose pro- 
duction capacities which supply a portion of their output to the USSR lies not 
only in the opportunity which they provide for the long-term satisfaction of 
the import needs of our economy, but also in the simultaneous resolution of the 
extremely urgent problem of ensuring the complete and prompt repayment of Soviet 
credits by means of goods which we need. This is particularly important for a 
number of the least developed countries, which remain in a difficult foreign 
exchange-financial position, and which have a low repayment capacity. 


Compensation cooperation frequentiy arises as well at the later stages, when 
repayment of Soviet credits is being carried out, and the already completed 
enterprises are in operation. In certain cases deliveries to the USSR serve 

the purposes of 1) ensuring the fullest and most effective utilization of the 
production capacities created with the assistance of Soviet organizations and 

2) overcoming marketing difficulties. One can cite as an example the deliveries 
of cast iron, rolled metal products, metallurgical and other equipment frew 
facilities arising out of Soviet-Indian cooperation. 


All of the above-indicated reasons provide the grounds for viewing compensation 
cooperation as an extremely promising and highly effective form of foreign 
economic ties of a production-commercial nature. At the present time more than 
% agreements concerning cooperation to be carried out under compensation con- 
ditions have been signed. The scale of the compensation cooperation which is 
already being realized can be judged from the fact that during 1976-1980 alone 
facilities built in the developing countries yielded output worth approximately 
3 billion rubles,including 40.9 billion cubic meters of gas from Afghanistan 
and Iran, 23.4 million tons of petroleum from Iraq and Syria, 11.6 million tons 


49 





of Bauxite from Guinea, 213,000 tons of alumina from Turkey, 148,000 tons of 
nitrogen fertilizers from Afghanistan, metallurgical and other equipment to- 
taling about 17 million rubles from India, etc. In some years this output has 
accounted for more than 20 percent of all Soviet imports from the developing 
countri¢s. 


In 1961 the output from facilities built under this kind of cooperation agree- 
ment accounted for 63 percent of imports from Afghanistan: these facilities 
include the oil fields of Shibarghan and Dzharkuduk, the nitrogen fertilizer 
plant in the city of Mazar-i-Sherif and the Khadda and Gaziabad agricultural 
farms. During al\ of these years a total of more than 600 million rubles 
worth of output hus been purchased to clear Soviet credits and to pay for cur- 
rent Soviet exports; this figure includes 34.3 billion cubic meters of natural 
gas, 204,000 tons of fertilizers, 33,000 tons of citrus fruits, and more than 
7,000 tons of olives. The prospects for the further development of compensation 
cooperation between our countries are linked to the development of the Aynak 
copper deposits, discovered with the help of Soviet geologists, to the reali- 
zation of other extracting facilities and to the development of irrigation. 


Output from a bauxite producing complex built with USSR assistance makes up the 
larger part of Soviet imports from Guinea. In the years 1975-1981 about 16 
million tons of bauxite were exported to the Soviet Union. Nearly half 

of this went to clear Soviet credits. At present, work is being carried out 
with USSR assistance to increase the capacity of this complex, and this 

will create the conditions for further growth in the deliveries of Guinena 
bauxite to the USSR, 


Cooperation with Guinea provides a graphic example of how a developing country 
can--on the basis of mutual advantage--attract overseas financial and material 
resources and promptly pay off its debts for assistance provided. Moreover, 
the net profit which this wholly national enterprise receives from every ton 
of bauxite it produces goes into the country's state budget, and this profit 
is 3-fold greater than the profit which Guinea obtains from mixed enterprises 
in which capital from Western firms is used. 


An important item in Soviet imports from the Congo is lead-zinc concentrate, 
which comes from a mining and enriching enterprise in the city of M'Fuati, 
which was built with USSR assistance. The development of compensation cooper- 
ation with Morocco is linked to participation by Soviet organizations in the 
development of phosphorite deposits, and in the case of Mozambique it is linked 
to the mining of coking coal and the ores of rare metals. 


Production cooperation based on facilities built in the developing countries 
with the Soviet Union's economic and technical s«ssistance borders very closely 
on cooperation carried out on a compensation busis. In both cases part of the 
output is purchased by Soviet organizations. The most outstanding example is 
to be found inthe cooperation with machine-building enterprises in India--with 
the heavy machine-building plant in the city of Ranchi, with the mining equip- 
ment plant in the city of Durgapur and with the machine-building plant, lo- 
cated in the city of Khardvar, which produces equipment for the power industry. 


50 





Production cooperation aruse in the 70's as one of the ways of providing help 
to facilities built with USSR assistance in establishing effective operations 
for those facilities, and it subsequently grew into solid production cooper- 
ation. Since 1968 large orders for the production of equipment for facilities 
which are being built in India with USSR assistance have been placed with these 
plants. In 1976 contracts were concluded to cover the manufacture in 1977-1980 
of 19,000 tons of metallurgical equipment for facilities being duilt in third 
countries with the assistance of the Soviet Union. Within the framework of 
these contracts coking equipment has been supplied to Bulgaria and Turkey, and 
bridge reloaders have been supplied to the Kepublic of Cuba, etc. For the 
production of this equipment Soviet organizations handed over to Indian plants 
the necessary technical documentation and supplied items necessary to complete 
the plant, and they took upon themselves the responsibility for the technical 
level and the quality of equipment. The placing of these major orders with 
Indian plants was seen as a demonstration of the great trust which the Soviet 
Union and other foreign countries have in the output of the Indian machine- 
building industry. 


A new stage in the development of Soviet-Indiat; cooperation in machine building 
was started in the late 70's, when it became more stable, planned and long-term 
in nature. According to the agreements which have been concluded, about 120,000 
tons of various types of equipment will be manufactured in 1981-1985 to fill 
Soviet orders. This ensures that the plants in the cities of Ranchi, Durgapur 
and Khardvar will be using their production capacities in the long-term future; 
it provides the opportunity to significantly improve the indicators of their 
production-financial activities and to expand machine-building exports. The 
Soviet Union is supplied with enriching, crushing-grinding and coking equipment, 
large electrical machinery, sinking winches, conveyer belts, a large quantity 

of parts, blocks, castings and other items for the manufacture of machinery and 
equipment at USSR enterprises. 


It should be noted that other CEMA member countries are starting to establish 
similar cooperation links. As the HINDUSTAN TIMES reported on 9 September 1982 
the Heavy Machine Building Corporation in Ranchi reached an agreement on man- 
ufacturing in India--using Czechoslovak technology--the following items which 
are to be supplied to the CSSR: cranes, rolled products and coking equipment, 
forged pleces and castings; the agreement also covered the use of Indian organ- 
izations to supply equipment and to carry out the construction of facilities 

in third countries. 


In the expansion of the USSR's economic and technical assistance to the develop- 
ing countries, it has been possible to observe in recent years an increased 
emphasis on projects which are planned and long-term in nature. In this regard 
particular mention should be made of the March 1979 signing--at the summit 
level--of a document concerning a program of Soviet-Indian economic, trade and 
technical cooperation. It sets out the areas of joint work between Soviet and 
Indian organizations on the leading sectors of India's national economy--ferrous 
and nonferrous metallurgy, the exploration and production of petroleum, electric 
power engineering, the coal industry, machine building, light industry, the 

food industcy and agriculture. 


5] 





In May 1961 a program of cooperation with Mozambique was confirmed for 194]- 
1990; it covers such sectors as geology, the extracting industry, nonferrous 
metallurgy, machine building, agriculture, and the training of national per- 
sonnel. In January 1962, a document was signed concerning a program of cooper- 
ation with Angola to cover 1961-1985 and up to 1990. Long-term programs of 
cooperation with Ethiopia and certain other developing courtries are being 
worked out. 


The work of inter-governmental commissions has great significance for the de- 
velopment of the long-term prospects for mutually advantageous cooperation. 
In the early 70's commissions were set up with India, Iran, Iraq, Turkey, 
Algeria, Morocco and Syria, and in the last five-year plan period inter- 
governmental commissions on economic and trade cooperation with Afghanistan, 
the People's Democratic Republic of Yemen, Ethiopia, Angola, Mozambique, 
Madagascar and Libya were added, 


Amony, the important areas of cooperation which have received particularly intense 
development in recent years one should include tne sending of Soviet experts 

and consultants to the developing countries to transmit the wealth of experi- 
ence accumulated by the Soviet Union in planning and effective economic manage- 
ment. For example, a group of Soviet specialists in Afghanistan is carrying 

out a large project on the introduction and improvement of the system for state- 
wide planning and on the development of measures to strengthen plan and finan- 
clal discipline, and to increase revenues going to the country’s state budget. 
On the basis of the recommendations and proposals put forward by the Soviet 
consultants, the range of plan indicators included in the 1951-1982 economic 

and social development plans for Afghanistan was substantially increased, and 
itemized lists of capital construction projects were compiled. 


Soviet specialists have worked out the basic normative documents and regulations 
of the five-year national development plans covering 1961-1985 for the People’s 
Democratic Republic of Yemen and 1982-1986 for the People's Republic of the 
Congo. They have participated actively in the preparation of long-term plans 
for Ethiopia in 1983-1992 and for Guinea-Bissau in 1983-1986. Assistance is 
being given to Angola and Mozambique in the development of annual and middle- 


range plans. 


Substantial assistance is also being given with the formation of national 
atatistical services, banking affairs, and with the development of sector and 
area comprehensive programs. For example, organizations and specialists from 
the Soviet Union have worked out long-term programs for the development of the 
petroleum and gas industries of Syria, India and Iraq, as well as the power 
supply systems of Libya. They have also worked out long-term water- and land- 
resource utilization programs for a number of river basins in Syria, Afghanistan, 
Mozambique, Madagascar, Ethiopia, as well as a general scheme for the develop- 
ment of fisheries in the People's Republic of Yemen over a 10-year period. The 
governments of Algeria and Mozambique have entrusted Soviet specialists with the 
task of monitoring the efforts of the national organizations in all petroleum 
and gas exploration and drilling work, and in Angola they are helping state 
organizations to monitor the activities of the foreign oil companies. 


52 





And finally, the further development of multilateral economic cooperation of 
the USSK and the other CEMA member countries with the developing countries 
stould be noted, For example, within the framework of the Soviet Union's econ- 
omic and technical assistance in the area of the metallurgical industry, broad 
use tas been made of the potential of Czechoslovakia, which supplied a number 
of developing countries with rolling mill equipment, while the CDR has manu- 
factured equipment for a light-section rolling mill in Iran and a wire mill 

in Algeria. bulgarian construction organizations have served as subcontractors 
im the fulfillment of nearly 30 percent of the obligations related to the con- 
struction of an atomic research center and a significant portion of the power 
transmission line construction, which is part of the Soviet Union's economic and 
technical assistance to Libya. A consortium of USSR, Polish, and Hungarian 
organizations was established, and it is successfully building the Isfagan 
thermal electric power plant in Iran. 


The 35th and 4th CEMA sessions pointed out the importance of expanding multi- 
lateral cooperation with the developing countries and of combining on a planned 
basis the efforts of the CEMA member countries to provide assistance to those 
countries in the expansion of production, including the production of the most 
important raw materials, power and foodstuffs, which could be purchased to 
satinafy the needs of the socialist community. Many projects in this area have 
favorable prospects; among them one can name first of all the development of 
phosphate deposits in Morocco, the development of coking coal deposits in 
Mozambique, copper ores in Afghanistan, and a number of power and agricultural 
facilities in the countries of tropical Africa. 


The consistent resolution of the tasks set by the 26th CPSU Congress in the 
area of economic cooperation with the developing countries will undoubtedly 
be accompanied by the emergence of new and the intensification of previously 
developed directions and forms of work by Soviet organizations which are en- 
gaged in providing economic and technical assistance to the young states of 
Asia, Africa and Latin America. The continuous search for new ways to improve 
werk in this area and the creative application of the experience of other 
socialist countries constitute the absolute prerequisite for the raising of 
both the political and economic effectiveness of the Soviet Union's foreign 
economic ties. 


COPYRIGHT: Sovet Ekonomicheskoy Vzaimopomoshchi Sekretariat Moskva 1983 


55465 
CSO: 1625/87 


53 








TRADE WITH LDC'S 


BRIEFS 


USSR-AFGHAN COOPERATION--The third session of the permanent inter-governmental 
Soviet-Afghan commission on economic cooperation was held in Moscow on 4-5 July. 
The commission approved the results of work by Soviet and Afghan organizations 
on the implementation of bilateral agreements on economic and technical 
cooperationand on trade. Detailed consideration was given to questions of 
cooperation in the area of agriculture and irrigation, transportation, power 
engineering, light industry, the food industry, geological prospecting and the 
training of national personnel. The results of the session, which took place 
in an atmosphere of friendship and complete mutual understanding, were used as 
the basis for the signing of a protocol, as well as a number of inter- 
governmental documents on issues of cCommercial-economic cooperation. The USSR 
delegation was headed by Z.N. Nuriyev, deputy chairman of the USSR Council of 
Ministers and the delegation from the Democratic Republic of Afghanistan was 
headed by Kh. Abawi, deputy chairman of the Council of Ministers and chairman 
of the Afghan State Committee. [Text] [Moscow EKONOMICHESKAYA GAZETA in 
Russian No 29, Jul 83 p 21) 8543 


CSO: 1825/87 


54 





GENERAL 


CURRENCY RATES, UNDERLYING RATIONALE REVIEWED 
l September Rates 
Moscow EKONOMICHESKAYA GAZETA in Russian No 37, Sep 83 p 22 


[Article by Ye. Zolotarenko: 
as of 1 September 1983") 


“Bulletin of Exchange Rates of Foreign Currencies 


{[Text) Name of Currency Exchange Rate in Rubles 


Australian dollar per 100. ....446-. 67.67 
Austrian schilling per 100 ....4+4++e+e8+808 ct © # #@ @@ 4.06 








Albanian leks per 100. ... 46 «© e+ + e+ # wees oeeee 18.00 
Dinars of the Democratic and Popular —aY of Algeria 

per 100. . 1. «6 wo s , a ceo ee eee ee 15.43 
British pounds sterling per 100. a a oe oe ee ee ee ee 114.87 
Argentine pesos per 100. ...+4+4++e+e+e88 8 © # © os 6.88 
Afghan afghanis per 100. ...+6++e+¢+s+e0+80+8e8e8 © #8 © #@ @ 1.47 
Belgian francs per 1,000 ...4.+4+6+6++6+6+se+8e088 © # © # @ @ 14.19 
Burmese kyats per 100. ...4++s+se+se+s+e0e8 eee ee eee 9.41 
Bulgarian levs per 100 ...4+6++e++ee0s8 © 8 © e+ # # @ ®@ 76.92 
Hungarian forints per 100. . TReeaerne ee 7.67 
Dongs of the Socialist Republ ic “of Vietnam per 100 . , 30.60 
Chanatan cedis per 100 ...+4+4+6-6 .. 4 626s 27.09 
Guinea syli per 100. ...46 6 «© eee eee ys 3.13 
Marke of the GDR per 100 ....4+6-s ° °° 40.50 
Deutsche Marks of the FRG per 100. .... ° 28.53 
Dutch guilders per 100 ....4+6+++868 8 oe @ e ° 25.52 
Greek drachmas per 1,000 ...4.+4+6+++8e8688 — 8.33 
Danish krones per 100. .... » ° oe 8 ‘ 7.92 
Egyptian pounds each. . . , aa ° 1.05 
Indian rupees per 100. oe ee oe @ ° oe 7.46 
Indonesian ruplahs pwe 1,000 .... . ko oe @ 0.75 
Iraqi dimars each. ..++s+seeeeeveeve eevee 2 2.47 
Iranian rials per 100. ...+++se+see0e08 ce eee ° 0.86 
Icelandic kronas per 100 ...4+4+++8+88088 ° ° 2.70 
Spanish pesetas per 1,000. .... + ° oe ee ° 5.01 
italian lira per 10,000... . oe “wee ay 2 4.78 
Dinars of the People's Democratic Republic of Yemen each . 2.21 
Rials of the Yemen Arab Republic per 100....+4+46 16.09 








Name of Currency Exchange Rate in Rubles 








Canadian dollars per 100. ... 566 «see ee eees 62.27 
Yuans of the People’s Republic of China per 100... . 37.35 
Wons of the Democratic People's Republic of Korea 


per 10D. eo cc ecereveeeeeee eee eee ee. 74.93 
Cuben pesos each. « ss cc eceeveeeeeeeeeees 0.90 
Kuwaiti dinars each .. s+ ccc eseveesveeeeves 2.61 
Lebanese pounds per 100 ...464+6+6+6e6+e0+808 + 88 eee 16.15 
Libyan dimares each. « «cs cceeveseeeseseeeees 2.48 
Malaysian ringgits per 100. ...4.646s6 «eee eeees 32.54 
Mali frence per 1,000 ...6ccevvevevseveeseee 0.94 
Moroccan dirhams per 100. . 1.1 1s +s eee eeeee 10.37 
Mexican pesos per 1,000 ...+4++e+s+8+80+8+8 8 #8 # # ees 4,91 
Mongolian tugriks per 100 ...464+6+6++8e088 et e#ees 22.50 
Nepalese rupees per 100. ..464+6+4+s066e080e8 8 ee ees 5.34 
New Zealand dollars per 100 ...464+6+6+8+8+888 68s 49,13 
Norwegian krones per 100. ... «6 «+ esse eee ewes 10.23 
Pakistani rupees per 100. ....4se+ eee eee eeee 5.70 
Polish zloty per 100. ..6..«+eeeevevevveeeseees 22.50 
Portuguese escudos per 1,000. ...+4+4++e+e#+s++8888 6.16 
Romanian leus per 100 ...4.4+++6e6+e0+8808088 8888 15.00 
Singapore dollars per 100. ...466s6s6 eee ee ees 35.78 
Syrian pounds per 100 ...464+4+6+6+s8es8e8 ee eeve0es 18.73 
Somali shillings per 100. ...s4s« esse eee eeevesr 4,78 
U.S. dollars per 100. ..4..264-e«ceeeevvveevevees 76.65 
Sudanese pounds per 100 ...4+4+6++e+88 8 8 #8 e# eee 58.77 
Tunisian dimars each. ... +6 s+ eee eevee eveves 1.12 
Turkish lira per 1,000. . . 16. s+ se eeeeeveveveves 3.27 
Uruguayan pesos per 100 ...4+4++s++0+80+8+88 8 # #@e 2.23 
Finnish markkas per 100 ...4.+64+4+e6+s0s8 ee 80 e8eee 13.40 
French francs per 100 ...4+6¢+e¢+se0s8e8 ee ee eees 9.48 
Czechoslovak korunas per 100. ...46+4+4+ s+ eee # ee 12.50 
Swedish kronas per 100. . . 1. s+ s+ e+ ee ee ee wwes 9.70 
Swiss francs per 100. ...++s+seee8e8e8 eee eee 35.08 
Sri Lanka rupees per 100... 544s «ese eeeeveer 3.14 
Ethiopian birrs per 100 ...4+646+6+6+e6ee 8 #8 # # # ee 36.26 
Yugoslav dinars per 1,000 ...46+64+e+s6+6e0e0 et eee eee 7.51 
Japanese yen per 1,000. . . 16 ++ eee ee eee eves 3.11 


Our Commentary 


The USSR State Bank changed as of 1 September the exchange rates of 18 foreign 
currencies. The exchange rate of the Austrian schilling, the Argentine peso, 

the Belgian, French and Swiss francs, the Deutsche Mark of the FRC, the Dutch 
guilder, the Greek drachma, the Danish krone, the Italian and Turkish lira and 
the Moroccan dirham was decreased. The exchange rate of the U.S. dollar, the 
Australian, Canadian and Singapore dollars, the Malaysian ringgit and the Finnish 
markka was increased. 


The decrease of the exchange rate of the dollar at the end of the second 10-day 
period of August was short-term, by the beginning of September it was increased 


56 








again. The main factor of such a movement of the exchange rate is the anticipation 
by the market of new restrictive actions on the part of the U.S. Federal Reserve 
Bank, which can lead to the further increase of interest rates. 


The signs of the slowing of the just begun “recovery” of the U.S. economy also af- 
fected the market predictions. Among these signs are the July decrease of the 
backlog of orders in industry by 1.7 percent and house sales by 6.5 percent, as 
well as the increase of the trade deficit to $6.36 billion in July as against 

$4.96 billion in June and the 0.4-percent increase of the reserves of raw materials 
and materials in industry. 


At the same time the worsening of some economic indicators of the FRC occurred. 
Ite foreign trade assets decreased from 3.9 billion Marks in June to 2.1 billion 
Marks in July, the increase of consumer prices accelerated somewhat. This led to 
a slight decrease of the exchange rate of the Mark of the FRC, and along with it 
of the majority of currencies of the member countries of the European Monetary 
System. 


The price of gold on international markets remained at the level of $418-420 per 
ounce as 4 result of the appearance of two opposing trends: the increase of the 
exchange rate of the dollar acted in the direction of its decrease, while the ag- 
4ravation of the tension in the Near East and Africa acted in the opposite direc- 
tion, in the direction of its increase. 


Rate Changes Explained 
Moscow IZVESTIYA in Russian 10 Aug 83 p 4 


[Article by Candidate of Economic Sciences V. A. Gromov, chief of the Exchange 
Rates Department of the Main Currency and Economic Administration of the Board of 
the USSR State Bank: “The Ruble and Foreign Currency") 


[Text] A bulletin of the exchange rates of foreign currencies 
is published each month in the newspaper IZVESTIYA. What are 
the changes in these exchange rates due to and of what economic 
importance are they for our state? 


A. Krasivekiy, Moscow 


IZVESTIYA asked Candidate of Economic Sciences V. A. Gromov, 
chief of the Exchange Rates Department of the Main Currency and 
Economic Administration of the Board of the USSR State Bank, to 
answer these questions. 


internaticnal economic relations presume the trade in goods and services of some 
countries with others. This trade is carried out in monetary form. Since no com- 
mon international money exists, the national currencies of states are involved in 
international settlements. Here for one of the trade partners the currency of 

the transaction is always a foreign currency. Therefore objectively in interna- 
tional economic relations there always exists the need for the exchange of na- 
tional currency for foreign currency: the buyer needs foreign currency for the 
payment for imported goods, while the seller, on the contrary, needs national money 


57 





in exchange tor foreign receipts. The proportions, in which such exchange is car- 
ried out, are called the exchange rate. The exchange rate can be established 
spontaneously on the exchange markets, where it is formed under the influence of 
miny factors. As opposed to the market method of the formation of the exchange 
rate there also exists the method of its state regulation. 


The planned nature of the development of the national economy of the Soviet Union 
also includes the sphere of foreign economic relations, while the establishment of 
the exchange rate is one of the important functions of the management of these re- 
lations. When specifying the proportions of the exchange of the Soviet ruble for 
foreign currencies, we are thereby to a considerable extent specifying the value 
proportions of foreign trade exchange and its effectiveness from the point of view 
of the national economy. For if the exchange rate of the ruble is “overstated” 
(that is, the foreign currency is valued too cheaply), many goods become more prof- 
itable to buy abroad than to produce ourselves. If the exchange rate of the ruble 
is “understated,” the effectiveness of Soviet exports is artificially decreased and 
the enterprises, which produce export products, do not have adequate financial 
stimuli. 


Therefore the most important demand, which is made on the establishment of the ex- 
change rates of foreign currencies to the ruble, is their realisticness, that is, 
the conformity of the exchange proportions to the purchasing power of the cur- 
rencies. Here it is necessary to bear in mind that the comparative purchasing 
power of currencies can change within broad limits depending on what goods are 
used for comparison. In order to avoid possible distortions in this matter, a 
wide “selection” of goods, which represent all the basic types of products pro- 
duced in our country, has been made the basis for the exchange rate of the Soviet 
ruble to the dollar (and in terms of it to other currencies). But a calculation 

of this kind due to its labor intensity and complexity cannot serve as an efficient 
tool of the establishment of the exchange rates of foreign currencies to the ruble. 


Therefore their current adjustment is made by a special method, which takes into 
account the movement of the exchange rates of the most important capitalist cur- 
rencies with each other on the international exchange markets. This method has 
the name of “a basket of currencies." Its essence consists in the fact that the 
“orice” of a ruble is equated with the current market value of the foreign compo- 
nents of the “basket,” that is, to the fixed proportions of several foreign cur- 
rencies, which have been added together. The choice of the foreign currency com- 
ponents and their quantitative proportioning take into account the role of indi- 
vidual capitalist currencies in the foreign settlements of the Soviet Union. 


The method of “a basket of currencies" makes it possible to keep track very effi- 
clently of all the changes on the exchange markets. However, from a national eco- 
nomic point of view there is no reed to carry over automatically all the spontane- 
ous fluctuations of the capitalist market to the exchange rate of the Soviet ruble, 
since frequent changes of the exchange rates create difficulties in the accounting 
of foreign currency operations. In order to ensure some stability of the exchange 
rates, the USSR State Bank adjusts them periodically, in recent times twice a month. 
For the purpose of the prompt notification of the workers of the ministries and 
departments, which make currency settlements, all the changes of the exchange rates 
of foreign currencies to the ruble are published in the newspaper IZVESTIYA. 


7807 
CSO: 1825/83 


58 





GENERAL 


MOSCOW INTERNATIONAL TRADE CENTER DESCRIBED 
Moscow MOSCOW NEWS in English No 35, 4-11 Sep 83 p 8 


[Article by Viktor Yevkin] 


[Text] Businessmen treasure their time. business information or 


and Technical Cooperation with Foreign Countries (CIT) 
EVERYTHING UNDER which represents-on contractual SOcountries In 1961, the Moscow CIT 
ONE ROOF terms ~ the commercial interests of was the venue of its 12th Ceneral 
a huge complies of foreign customers, offers its services Assembly After the meeting. | asked 


im which the missions of more than a reception, excurnon 

% terms and banks from the USA, = theatres and concert halls SOME HISTORY 

Japan, the PRC, Prance, Maly, and 

other countries have already celebrat THE VENUE bay 4 Ld establishment 

ed their housew porte, he OF INTERNATIONAL MEETINGS Ad a 1h to say 

their dusposal are closed circuit object Soviet. 

advertise their , Woraries, in This car well be said about the CIT American cooperation,” | was told 

formation computer-leasing Where some 150 economic, scientific Vyacheslav T , Deputy 

services etc and technical congresses sympo §=©Director of V/O Sovincentr “All the 
‘Work hard, play hard” is the sums, conferences. exhibitions. and = piganing and materials calculations 

motto some specialists hold for seminars were held last year alone § were done jointly with the Bechtel 

success in work Therefore, the CIT The Centre welcomed 6,000 partici 2nd Welton Beckett companies Part 

has 4 sports and health building pants in the 9th World Congress of of the equipment and materials was 


compiles with gymnasiums, swim Cardiology, it was the venue of the dought in the USA 


mung pools and saunas. restaurants, 7th annual meeting of the US USSR “while our due to these 
cates, bars. etc Trade and Econom« Council fiers. we would like to stress that the 
ON A COMMERCIAL BASIS This year the CIT received the onstruction of the CIT experienced 


The CIT « operated by V/O 
Sovincents of the USSR Chamber of — Shroad it has seen the mectonn 
a eae ae the BritishGowiet and the French. construction was suepended for a 
up for the purpose its firms offer whole year, and Carter's ‘pre 
different services connected with the = the ~soth European Congress of pie’ eubarpe affected mney oopghes 


ization of business meetings, Rheumatologists The Americans refused to carry out 
ural and communal facilities. and a number of starting and adjustment 
hotel accommodation V/O Sovincentr has taken an active ations. which, sstursity, had its 


cooperate with our country have their but also 
offices in Moscow inpred, a. firm ore than 100 organizations from 4.1255 firms themecives 


CSO: 1812/09 


59 





CENERAL 


OIL AND GAS-83 EXHIBITION IN BAKU, WESTERN COMMENTS 


Moscow MOSCOW NEWS in English No 42, 23-30 Oct 83 p 4 


[Interview by Valery Grigoryev] 


[Text] 


“Prendly relations between 
Countries ate more important than 
commerce * “Turing the last five 
years the volume of deliveries my 
form thas made to the USSR has 
neatly doubled and can merecase 
further “© “The USSE not only 
» powerful, but also an utterly 
rcliatle partner © “We have been 
cwuperating with the USSE for 
2 years and during all thes time 
cooper mien hams =6tecadily =m 
cremed * “We cannot remember a 
wngic case when the USSE has not 
fulfiiied is contractual obliga 
tons © “My tiem Maruben: will 
ingly Carries Ous Commercial trans. 
athons with the USSR ~ 


| heard the above said at the 
International Exhibition, Ov and 
Cat} m Baku. capital of Azer 
baijan The statements came from 
people who were far from being 
Communists, and all the more 
mteresting were their anewers to 
two questions | asked them in an 
mierview The questions were 


1. Why do you trade with the 
Usen’ 

2. What ts your attitude to the 
motives are 


tonal trade’ 

Bobby E. Taylor, president of Bet 
Trading Associates Inc (USA). re- 
pled 

“Dering the last five years trade 
between my firm and the Soviet 
Union has imcreased from 10 to 
between 15 to 20 milion dollars It 1s 
a tone result consedering the re 
cession in the world market The 
eshitition Oil and Cas-76 which 
took place in Baku and which we 
attended. played an important role 


.the USSR and | maintained that 


board ships. or im conditions of 
open sea 
“In a word, the Soviet Union is 
smply a powerful partner for us 
is also utterly rehable 

“| agree that the present-day 
political situation in the world, to 
put it mildly, « disturdi but 
politics politics, and fulfilling 


m wach 2 leap it goes without 
saying that we pin all our hopes on 
the Onl and Cas-63 exhibition 


“I spoke twice in Congress about 
my countrys trading policy with 


only narrow-minded people can 
~ - Ay be of limitation on 
t ¢. nessmen have More 
Se ee 
perience im ’ ' VE = Robert G. Plastre, director of the 
embargoes t. practice ay a Inter Trade Producers’ Association 
country which hes introduced them, © Equipment for the Oil, Ces and 
Geothermal industries (France), 
“This was the case with both em- commented 
bargoes brought in by Presidents “We have been cooperating with 
Carter and Reagan Because of these the USSR for 20 years and during al! 
embargoes American business lost this time cooperation has steadily 
nearly half a billion dollars a year. increased We supply floating and 
which was found by competitors in stationary oi) drilling equipment. 
Western Europe and japan” diving and immersion technology 
Rolf Dressler, head of the sales for work in very deep water and so 
department in the USSR and other on it just so happened that 
socialist countries for the firm American firms also participated in 
Blohm & Voss AG (West Germany), Ovf work US restrictions on trade 
stated with the Soviet Union, however, 
“Today m the Hamburg docks we forced us to look for other partners 
have just finished assembling a self. $0 44 to complete Soviet contracts 
unloading barge with a cargo 5° these measures cost us a ict“ 
capacity of 14 thousand tons It will Franz M. Schlager, international 
which 1s being built mm Azerbaijan '€ Province of Alberta (Canadaj 
This order provided work for ten 4 
per cent of our shipbuilders “A conmderable area of the Soviet 
“Ties between our firm and the Union, as is the case in Canada, is 
USSR are not only limited to the subjected to a severe climate And it 
supply of technical equipment We is exactly in these areas where the 
also work with the well-known Soviet Union's present-day oi! re. 
Paton Institute of Electrical Weld search is going on and 80 per cent of 


ing im Kiev Specialists there devise Canada’s oj) and su is 
new methods of welding and we concentrated Therelore fiems from 


make the equi t and ships. the ‘oil-rich’ Canadian province 
which use these methods to weld Alberta d their products at the 
large-diameter pipes either directly Oi) and #3 exhibition They 








ob its i 


pile tn 283 


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il a 
aaa agit? 
ea he ft 
i fa Hi 
auth a 


if tS z 
a ny 
iat at H 


THE an 


1812/09 


cso: 


61