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Comecon The Council for Mutual Economic Assistance (, ; English abbreviation COMECON, CMEA, CEMA, or CAME) was an economic organization from 1949 to 1991 under the leadership of the Soviet Union that comprised the countries of the Eastern Bloc#List of s ...
'' The "Council for Mutual Economic Assistance" (Comecon) was an economic organization of
communist state A communist state, also known as a Marxist–Leninist state, is a one-party state that is administered and governed by a communist party guided by Marxism–Leninism. Marxism–Leninism was the state ideology of the Soviet Union, the Comint ...
s, created in 1949, and dissolved in 1991, with the collapse of the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
. International relations within Comecon is best discussed under three separate categories, as the nature of the relationships between the Soviet Union and its constituent members were not
homogeneous Homogeneity and heterogeneity are concepts often used in the sciences and statistics relating to the uniformity of a substance or organism. A material or image that is homogeneous is uniform in composition or character (i.e. color, shape, siz ...
.


The Soviet Union and Eastern Europe

Since Comecon's creation in 1949, the relationship between the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
and the six East European countries had generally remained the same. The six countries were:
Albania Albania ( ; sq, Shqipëri or ), or , also or . officially the Republic of Albania ( sq, Republika e Shqipërisë), is a country in Southeastern Europe. It is located on the Adriatic and Ionian Seas within the Mediterranean Sea and share ...
,
Bulgaria Bulgaria (; bg, България, Bǎlgariya), officially the Republic of Bulgaria,, ) is a country in Southeast Europe. It is situated on the eastern flank of the Balkans, and is bordered by Romania to the north, Serbia and North Macedo ...
,
Czechoslovakia , rue, Чеськословеньско, , yi, טשעכאסלאוואקיי, , common_name = Czechoslovakia , life_span = 1918–19391945–1992 , p1 = Austria-Hungary , image_p1 ...
,
Hungary Hungary ( hu, Magyarország ) is a landlocked country in Central Europe. Spanning of the Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Cr ...
,
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populou ...
, and
Romania Romania ( ; ro, România ) is a country located at the crossroads of Central Europe, Central, Eastern Europe, Eastern, and Southeast Europe, Southeastern Europe. It borders Bulgaria to the south, Ukraine to the north, Hungary to the west, S ...
. The Soviet Union had provided fuel, non-food raw materials, airplane and helicopter designs and semi-manufactures ("hard goods") to
Eastern Europe Eastern Europe is a subregion of the European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural, and socio-economic connotations. The vast majority of the region is covered by Russia, whi ...
, which in turn, had supplied the Soviet Union with finished machinery, and industrial consumer goods ("soft goods"). This kind of economic relationship stemmed from a genuine economic problem within the Eastern communist states in the 1950s. Eastern Europe had poor energy and mineral resources, a problem exacerbated by the low energy efficiency of East European industry. As of mid-1985, factories in Eastern Europe still used 40% more fuel than those in the West. Eastern European countries have always relied heavily on the Soviet Union for oil. During the 1950s, Eastern Europe supplied the Soviet Union with those goods, otherwise unavailable, because of Western
embargo Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they m ...
es. Thus, from the early 1950s to the early 1970s, the Soviet Union inexpensively supplied its East European clients with hard goods in exchange for finished machinery and equipment. Soviet economic policies also brought with them, political and military support. During these years, the Soviet Union could be assured of relative political tranquillity within the
bloc Bloc may refer to: Government and politics * Political bloc, a coalition of political parties * Trade bloc, a type of intergovernmental agreement * Voting bloc, a group of voters voting together Other uses * Bloc (code school), an educational ...
, obedience in international strategy, as laid down by the Soviet Union, and military support of Soviet aims. By the 1980s, both parties were accustomed to this arrangement, which was still particularly advantageous to The Soviet Union, as it could expand its energy and raw materials complex quickly, and relatively cheaply. In the 1970s, the terms of trade for the Soviet Union had improved. The
OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headqua ...
price for oil had soared, placing the oil-rich Soviet Union in an advantageous position. The soaring price increased the cost of providing Eastern Europe with oil at prices lower than those established by OPEC. In addition, extraction and transportation costs for oil, much of which originated in
Siberia Siberia ( ; rus, Сибирь, r=Sibir', p=sʲɪˈbʲirʲ, a=Ru-Сибирь.ogg) is an extensive geographical region, constituting all of North Asia, from the Ural Mountains in the west to the Pacific Ocean in the east. It has been a part ...
, was also rising. In response to the market, the Soviet Union decreased its exports to its East European partners and increased its purchases of soft goods from these countries. This policy forced the East European countries to turn to the West for hard goods, despite the fact that they had fewer goods to export in return for hard currency. Any hard goods supplied to Eastern Europe by the Soviet Union were sold essentially at a discount price, as Comecon prices lagged behind, and were lower than those of the world market. Developments in the 1980s made this situation even more complex. The 1983–84 decline in international oil prices left the Soviets with large holdings of oil that, because of the lag in Comecon prices, were still rising in price. The "non-market gains from preferential trade" became quite expensive for the Soviets. East European profits from the implicit subsidization were almost US$102 billion between 1971 and 1981.


Mongolia, Cuba, and Vietnam

Soviet-initiated Comecon support for the Council's three least-developed members,
Cuba Cuba ( , ), officially the Republic of Cuba ( es, República de Cuba, links=no ), is an island country comprising the island of Cuba, as well as Isla de la Juventud and several minor archipelagos. Cuba is located where the northern Caribb ...
,
Mongolia Mongolia; Mongolian script: , , ; lit. "Mongol Nation" or "State of Mongolia" () is a landlocked country in East Asia, bordered by Russia to the north and China to the south. It covers an area of , with a population of just 3.3 million ...
, and
Vietnam Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making ...
, benefited them, but the burden on the six East European Comecon members had been most unwelcome. Comecon was structured in such a way that the more economically developed members provided support to the less developed members in their major economic sectors. When Mongolia initially joined the Comecon in 1962, there was no great added burden. The population of Mongolia was relatively small, and the country's subsidies came primarily from the Soviet Union. But the addition of Cuba in 1972, and Vietnam in 1978, quickly escalated this burden. As of early 1987, three-fourths of Comecon's overseas economic aid went to Cuba, Mongolia, and Vietnam: almost US$4 billion went to Cuba, US$2 billion to Vietnam (half in military aid), and US$1 billion to Mongolia. Although the Soviets carried most of the burden since 1976, the East Europeans had been persuaded to take part in projects to boost the developing countries' economies. East European countries imported Cuban
nickel Nickel is a chemical element with symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel is a hard and ductile transition metal. Pure nickel is chemically reactive but large pieces are slow t ...
, and Mongolian
molybdenum Molybdenum is a chemical element with the symbol Mo and atomic number 42 which is located in period 5 and group 6. The name is from Neo-Latin ''molybdaenum'', which is based on Ancient Greek ', meaning lead, since its ores were confused with lead ...
and
copper Copper is a chemical element with the symbol Cu (from la, cuprum) and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a pink ...
. They were also pressed to buy staples, such as Cuban sugar (80% of Cuba's exports), at inflated prices. Eastern Europe also contributed to the International Investment Bank, from which the underdeveloped three could acquire loans at lower interest rates than the East Europeans themselves. The Soviets also sold their fuel and raw materials to Cuba, Vietnam, and Mongolia for less than it was sold to the six East European members. Hence, the former had become competitors for the slowly diminishing Soviet resources. In the late 1980s, the only benefit accruing to the East Europeans was the services provided by Vietnamese guest workers. However, the majority of the Vietnamese had worked primarily on the Friendship pipeline in the Soviet Union. Comecon was investing heavily in Mongolia, Cuba, and Vietnam, and the three countries had benefited substantially from its resources. In 1984, increases in capital investments within Comecon were the highest for Vietnam and Cuba — coming to 26.9% for Vietnam, and 14% for Cuba, compared with 3.3% and less, for the others, except
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populou ...
and
Romania Romania ( ; ro, România ) is a country located at the crossroads of Central Europe, Central, Eastern Europe, Eastern, and Southeast Europe, Southeastern Europe. It borders Bulgaria to the south, Ukraine to the north, Hungary to the west, S ...
. Increased investments in Mongolia lagged behind Poland and Romania, but were nevertheless substantial, at 5.8%. In 1984, the economies of the three developing countries registered the fastest industrial growth of all the Comecon members. Given their locations, Comecon membership for Mongolia, Cuba, and Vietnam principally served Soviet foreign policy interests. The Soviet Union contributed the most to the development of the three poorer Comecon members, and it also reaped most of the benefits. It imported most of Cuba's sugar and nickel, and all of Mongolia's copper and molybdenum (widely used in the construction of aircraft, automobiles, machine tools,
gas turbines A gas turbine, also called a combustion turbine, is a type of continuous flow internal combustion engine. The main parts common to all gas turbine engines form the power-producing part (known as the gas generator or core) and are, in the directio ...
, and in the field of
electronics The field of electronics is a branch of physics and electrical engineering that deals with the emission, behaviour and effects of electrons using electronic devices. Electronics uses active devices to control electron flow by amplification ...
). Cuba had provided bases for the Soviet Navy, and military support to Soviet allies in
Africa Africa is the world's second-largest and second-most populous continent, after Asia in both cases. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 6% of Earth's total surface area ...
. Vietnam made its naval and air bases, as well as some 100,000 guest workers, available to the Soviets. At the June 1984 Comecon economic summit, and at subsequent Council sessions, the policy of equalizing the levels of economic development between Comecon member countries was repeatedly stressed. At the November 1986 Comecon session in
Bucharest Bucharest ( , ; ro, București ) is the capital and largest city of Romania, as well as its cultural, industrial, and financial centre. It is located in the southeast of the country, on the banks of the Dâmbovița River, less than north o ...
, the East European members "outlined measures to further improve cooperation with Vietnam, Cuba, and Mongolia with a view to developing the main sectors of these countries' national economies". Moreover, the Soviets have repeatedly stressed their earnestness in "normalizing the situation in the Asia-Pacific region, and in including that region in the overall process of creating a universal system of international security".


Support for developing countries

Comecon provided economic and technical support to 34 developing countries in 1960, 62 countries in 1970, and over 100 countries in 1985. As of 1987, Comecon had assisted in the construction or preparation of over 4,000 mostly industrial projects in
Asia Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an are ...
,
Latin America Latin America or * french: Amérique Latine, link=no * ht, Amerik Latin, link=no * pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived ...
, and Africa. A monetary figure for this assistance was difficult to estimate, although a June 1986 Czechoslovak source valued the exchange between Comecon and developing countries at 34 billion  Rbls per year, the equivalent of US$44.2 billion. The precise nature of this aid was unclear, and Western observers believe the data to be inflated. From the 1960s to the mid-1980s, Comecon had sought to encourage the development of industry, energy, transportation, mineral resources, and agriculture of Third World countries. Comecon countries had also provided technical and economic training for personnel in
Asia Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an are ...
, Africa, and
Latin America Latin America or * french: Amérique Latine, link=no * ht, Amerik Latin, link=no * pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived ...
. When Comecon initially lent support to developing countries, it generally concentrated on developing those products that would support the domestic economies of the Third World, including replacements for imports. In the 1970s and 1980s, assistance from Comecon had been directed toward export-oriented industries. Third World countries had paid for this support with products, produced by the project for which Comecon rendered help. This policy had provided Comecon with a stable source of necessary deliveries, in addition to political influence in these strategically important areas.


References



{{Foreign relations of the Soviet Union Comecon, Relations