USSR: TRENDS IN TRADE WITH THE MIDDLE EAST AND SOUTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01098A000100020001-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 34
• Document Creation Date: November 16, 2016
• Document Release Date: February 28, 2000
• Sequence Number: 1
• Publication Date: April 1, 1973
• Content Type: REPORT

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CENTRAL INTELLIGENCE AGENCY
office of Economic Research
USSR: Trends in Trade
with the Middle East and South Asia
Classified by 015319
Exempt from general
declossificotion schedule of E.O. 11652
exemption category 56(1),(2),(3)
Automatically declossified on
Date I cpossbfe to Determine
ER RP 73-2
April 1973
Copy No.
49
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USSR: Trends in Trade
with the Middle East and South Asia
1. Soviet trade with the countries of the
Middle East and South Asia (MESA) has grown fifteen-
fold since 1955 to more than US $2 billion annually.
Most of this growth has stemmed (a) directly from
the flow of goods under Moscow's aid program, and
(b) indirectly from the secondary economic relation-
ships generated by the aid program. Almost $5 billion,
or about 30% of Soviet-MESA trade since 1955, have
been directly connected to an estimated $3 billion
of Soviet exports of aid goods and nearly $2 billion
of repayments for Soviet aid.
2. The leading partners in this trade are, in
order of rank: Egypt, India, Iran, Iraq, and Tur-
key. The commodity composition of the trade features
the exchange of Soviet machinery, ferrous metals,
fuels, and grain for MESA agricultural raw materials
and foodstuffs. In recent years, Soviet aid deliv-
eries have increased more slowly than total Soviet
Note: Comments and queries regardin this paper are 25X1A
welcomed. They may be directed to of the
Office of Economic Research, Code 143, Extension 6716.
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exports to MESA. Nonetheless, exports of machinery
and equipment, the category which includes most
Soviet aid deliveries, have remained high, indi-
cating a growing acceptance of Soviet non-aid goods
in aid-receiving countries.
3. As for Soviet imports, the share of agri-
cultural raw materials and foodstuffs has declined
from about 80% in 1964 to about 60%, whereas the
share of manufactured goods and energy fuels has
climbed to 40%. Moscow is importing growing quanti-
ties of MESA industrial and consumer goods to meet
some of its domestic requirements and to help aid
recipients use the excess capacity of Soviet-aided
plants.
4. The economic growth of MESA countries, their
geographic proximity to the USSR, the commercial
ties the Soviet aid program has helped establish,
and the expansion called for in new trade agreements
all point toward continued growth of Soviet trade
with MESA countries. Moscow's extension of more
than $1 billion in new economic aid to this area
over the last two years also will contribute to the
growth of Soviet exports and keep the machinery and
equipment category at least at the present level.
Soviet imports will grow as the level of repayments
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rises. An increasing share will be in the form of
gas and oil from Afghanistan, Iran, Iraq, and Syria.
Discussion
Introduction
5. Much of Soviet trade with the less developed
countries (LDCs) during the past 18 years has been
generated by Moscow's aid program. The major trad-
ing partners also are the major aid recipients.
During most of these years, the aid program frequently
determined the composition of trade of the larger
aid-receiving countries. Since the mid-1960s, how-
ever, there have been noticeable changes in the
character of that trade. Soviet machinery and
equipment, initially aid generated, have become
increasingly accepted for their own sake in LDC
markets. Soviet purchases of LDC exports have been
shifting toward raw materials and goods produced in
newly created plants. These latter goods are
generally not marketable in the West. This paper
examines the growth and changes in Soviet trade with
countries of the Middle East and South Asia (MESA),
the area that accounts for most Soviet-LDC economic
relations. Text and appendix tables provide de-
tailed statistical data on Soviet-MESA trade.
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Overview of Soviet Trade and Aid
6. Soviet trade with the LDCs grew rapidly
after Moscow launched its aid program in the mid-
1950s. During 1955-60, trade more than tripled.
By 1971, it had tripled again, reaching about $2.8
billion. MESA trade grew even faster, quadrupling
in both periods and totaling more than $2 billion
in 1971 (see Table 1 and Tables-A-1 and A-2).
USSR: Trade with Middle Eastern and South Asian Countries
MESA Trade
Soviet-MESA Trade
as a Percent
of
Total
Soviet-LDC
Soviet
Soviet
Soviet-LDC
Trade I
Total
Imports
Exports
Trade
1955
294
127
58
68
43
1956
448
255
118
137
57
1960
901
525
280
245
58
1965
1,756
1,142
489
653
65
1970
2,591
1,870
829
1,040
72
1971
2,793
2,028 -
926
1,102
73
I Value of identified trade. Unspecified trade, virtually all of which
consists of Soviet exports to the LDCs, is believed to represent largely
military-related deliveries. Because of rounding, components may not
add to the totals shown.
MESA trade rose from about 45% of Soviet-LDC trade
in 1955 to nearly 75% in 1971.
7. The dominance of MESA countries in Soviet-
LDC trade is reflected in the Soviet aid program
as well. Nearly 80% of about $17 billion of Soviet
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economic and military aid obligated since 1954 has
been extended to MESA countries. About $6.4 billion
of economic aid has been committed to these areas --
more than 550-6 to Afghanistan, Egypt, and India --
and $6.8 billion of military aid -- more than 70%
to Egypt, India, and Iraq (see Table 2)
Table 2
USSR: Economic and Military Aid Extended to Middle Eastern and South Asian Countries 1
1954-72
Percent of Percent of
Total Total
Million US $ LDCs MESA
Total LDCs 8,320 100 ....
Total MESA 6,370 77 100
Afghanistan 825 10 13
Egypt 1,195 14 19
India 1,610 19 25
Iran 600 7 9
Iraq 555 7 9
Pakistan 390 5 6
Syria 320 4 5
Turkey 530 6 8
Other 345 4 5
Million US $
Percent of
Total
LDCs
Percent of
Total
MESA
8,475
100
....
6,765
80
100
455
5
7
2,685
32
40
1,230
15
18
480
6
7
1,000
12
15
65
1
1
715
8
11
I Because of rounding, components may not add to the totals shown.
8. Economic aid enters the trade stream as
Soviet exports of investment goods for its projects
and as repayments of Soviet credits by LDC exports.'
The rate of flow depends on the pace of project
lemenLation, the terms of credit repayment, and
1. 1.1ilitary aid deliveries are not considered here,
because they are. not part of the economic resource
flo?,?. to the LDCs and are not reflected in trade data.
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the recipient's ability to meet those terms. The
Soviet economic aid generally is repaid over 8-12
years at 2.5%-3% interest; the military debt in 8-10
years at 2%-2.5% interest. Thus, Soviet aid has
directly increased trade with MESA countries by (a)
the amount of economic aid delivered under credit,
and (b) the amount of goods imported by the USSR
as repayment for both military and economic aid.2
About 30% (almost $5 billion) of Moscow's total
trade with MESA countries since 1955 has been aid
generated.
Economic Aid Disbursements Generate Ex2orts
9. Aid disbursements accounted for an estimated
$3 billion of Soviet exports to MESA countries dur-
ing 1956-71 and contributed substantially to the
export growth in the early years.3 They totaled
$10 million in 1956, increased to $90 million by
1959, and averaged about $220 million annually dur-
ing 1961-65 (see Table 3). By 1964, Soviet economic
aid deliveries accounted for one-half of Soviet
2. It is assumed that the two-way flow of goods is
in addition to the commercial flows and would not
have occurred if the aid program did not exist..
3. Disbursements cover only credit deliveries, as
Soviet trade data do not include grants. However,
the magnitude of Soviet grants is small, and only
Afghanistan has received a sizable share of such
Soviet aid -- $145 million.
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USSR: Exports and Aid Deliveries to Middle
Eastern and South Asian Countries
-----_--~ --- Million US $
---
Total Soviet
Exports to
MESA
Countries
-----
Soviet Aid
Deliveries to
MESA
Countries
Aid
Deliveries as
a Percent of
Soviet
Exports
Total
9,067
3,050
34
7
1956
137
10
35
14
1057
1958
254
312
85
27
1959
238
90
38
1960
245
60
24
1961
356
110
31
1962
396
180
45
1963
554
260
47
1964
589
295
260
50
40
1965
1966
653
720
285
40
1967
792
245
31
1968
754
265
35
1969
925
275
30
1970
1,040
295
28
1971
1,102
300
27
exports to MESA countries. Although the rate of
increase slackened thereafter, aid deliveries in
the last half of the 1960s still averaged about
$270 million annually and reached almost $300 million
annually during 1970-71. Because total exports
rose much more rapidly, aid-generated deliveries had
declined to 27% of total exports by 1971.
Repayments Increase Soviet Imports
10. Nearly $1.7 billion -- 30% -- of Soviet
imports from MESA countries during 1960-71 were
generated by aid repayments. Although not significant
until the early 1960s, aid repayments totaled $125
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Million in 1964, jumped to $170 million in 1968,
and rocketed to $325 million in 1971 (see Table 4).
Table 4
USSR: Import, and Aid Repayments by Middle Eastern and
es
i
ian Countr
h A
s
Sout
Total Soviet
Imports from
Million US $
Repayments
Estimated MESA
Repayments
as a Percent
A4ESA
Countries
Total
Economic
Military
of Imports
Total
5,999
1 ,6
95
4r
935
20
760
25
28
16
1960
280
~
45
20
25
15
1961
252
0 80
25
55
33
1962
241
8
90
25
65
28
1963
326
5
RO
30
0
125
4
1964
41
0
50
60
22
1965
489
11
140
70
70
27
1966
510
35
85
70
27
1967
506
1 1
70
115
55
31
1968 5
r
ll5
65
6
685
150
30
1969
829
250
175
75
3.5
1970
1971.
926
325
190
135
In 1971 they were about seven times the 1960 level,
and since 1967 have accounted for about one-third of
total Soviet imports from MESA countries.
Comp osition of Trade
11. Machinery and equipment, a category
et aid deliveries, comprised more
includes most Sovi
than one-half of Soviet exports to MESA countries
during 1955-71. In 1971, it totaled more than
$600 million and accounted for 550 of Soviet exports
(see Table A-3). Metals, wood products, and fuels
represented another 20%. Soviet grain exports have
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been significant in some years, their size depending
on the Soviet crop. During 1967-71, grain shipments
varied between practically zero and nearly 10% of
total Soviet exports to MESA countries.
12. The machinery and equipment category is
particularly important for Moscow's major aid re-
cipients. In 1964, for example, it represented
about 75% and 70%, respectively, of Soviet exports
to India and Egypt. Even though these shares have
declined in recent years upon completion of large
aid projects, they remain sizable for both countries
as well as for the LDCs as a whole.
13. Whereas aid deliveries to MESA countries
have remained almost constant, commercial sales of
capital goods have increased rapidly. Machinery
and equipment previously sold on deferred payment
have created repeat sales of spares and replace-
ments, have dispelled many inhibitions against
Soviet products, and have increased demand for non-
aid Soviet goods. Moreover, the purchase of Soviet
equipment represents a low opportunity cost to MESA
countries because the goods used in repayment
generally are not marketable in the West. Soviet
commercial sales almost tripled during 1964-71. By
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1971, they comprised nearly three-fourths of total
Soviet exports, compared with one-half in 1964.
14. Soviet imports from MESA countries have
been dominated by cotton and other agricultural raw
materials and by foodstuffs (see Table A-4).. In
some years these categories accounted for 80%-85%
of Soviet imports. Recently, however, a rapid in-
crease has occurred in the share of manufactured
and semi-manufactured goods and energy fuels. Imports
of MESA manufactures totaled $285 million in 1971,
four times the 1964 volume, and more than 30% of total
Soviet imports from MESA countries. Imports of fuel
totaled about $70 million, compared with almost
nothing in 1964. MESA countries now supply the USSR
with all of its LDC imports of machinery and equip-
ment, tires, jute products, cotton. fabrics, clothing,
furniture, and natural gas.
15. These new products, as well as the tradi-
tional exports, not only help repay aid debts to
the USSR but also represent growing supplementary
sources to meet Soviet domestic requirements. One
Soviet author, for example, states:
The resources received in redemp-
tion of the credits and in payment of
interest are utilized by Soviet foreign
trade organizations for the purchase in
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India of tea, wool, jute, coffee, tobacco,
as well as rolled ferrous metal, products
of engineering plants and manufactured
consumer goods. The Arab Republic of
Egypt redeems Soviet credits with such
traditional Egyptian exports as cotton,
yarn, fabrics, and rice as well as the
products of enterprises built with Soviet
assistance -- ferrous metals, stampings,
parts of automobiles and tractors, and
other goods. (D. Chertkov, "The USSR and
Developing Countries: Economic Relations,"
International Affairs, August 1972, p. 59)
Along the same lines, another author points out:
Soviet purchases of their tradition-
al exports and of products of their
young national industries are of great
importance for this group of countries.
Our economic ties with these countries
have also begun to play a greater role
in solving the Soviet Union's national
economic tasks. Our increased purchases
in these countries and the delivery of
their products in repayment of Soviet
credits enable the USSR to organize a
better supply of many types of raw
materials for its industry and to satisfy
the needs of its population for food-
stuffs and consumer goods more fully.
(V. Smirnov, "To Our Mutual Advantage
and in the Interest of the Economic
Independence of the Developing Countries,"
USSR Foreign Trade, December 1972, p. 27)
Major Trading Partners
16. Since the mid-1950s, Egypt and India have
been Moscow's largest Third World trading partners.
Together they have received 40% of Moscow's economic
and military aid commitments. More recently, Soviet
aid to Iran has risen substantially, with trade
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following. In 1971 these three countries accounted
for one-half ($1.4 billion) of Soviet-LDC trade and
about 70% of soviet-MESA trade.
Egypt
17. Soviet-Egyptian trade increased more than
sixfold between 1955 and 1957 and reached $193
million even before sizable economic aid was ex-
tended (see Table 5). Soviet imports led the
Table 5
USSR: Trade with and Aid to Egypt ' f
Estimated Aid Repayments
Million US $
Estimated Aid
Deliveries
Total
As a
t
Million US $ Percen
Total
Soviet-
Egyptian
Trade
Soviet
Exports
Soviet
imports
Million
US $
Percent
of Soviet
Exports
Total
of Soviet
Economic Military
Iq'S 26
11
15
50
....
1956 89
38
82
111
....
....
l
....
Negl.
Negl
1957 193
107
Negl.
Negl.
.
Ncg
20
N
22
5
1
1958
88
15
17
20
eg' 20
17
88
93
20
1 .
Neg
81
18
195,.q
121
15
21 2
20
N
]
21
1960 191
70
96
30
20
eg
.
5 45
68
1901 205
109
73
55
53
50
5 45
40
176
1962
103
124
85
63
50
15 45
48
59
2
1963 259
135
124
60
39
60
20 20
25
1964 278
1
9
163
55
26
40
20 20
27
1965 5 372
0
2~
150
80
40
40
20
14
1966 349
199
145
90
32
20
30 ....
18
1967 426
281
80
40
30
18
1968 369
198
171
40
19
40
0
40 ....
l
21
6
238
228
6
.
65 Neg
1969 46
311
45
12
65 35
30
1970 674
363
70
18
100
--
1971 715
381
334
-----
Because of rounding, components may not add to the totals shown.
growth, as Moscow quickly purchased a large part
of Egypt's surplus cotton. By 1971, Soviet-Egyptian
trade of $715 million was 35% of Soviet-MESA trade
and 45% of Egypt's total tr_ade..
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18. Although Soviet exports to Egypt rose seven-
fold between 1955 and 1959, they did not begin to
show the impact of Soviet aid until after 1960.
In 1958 and 1960 the USSR committed $500 million for
various industrial facilities and the Aswan High
Dam. As deliveries for these projects accelerated,
exports jumped from $70 million in 1960 to $209
million in 1965. During 1962-68, years of the
most extensive Soviet project construction, aid
deliveries comprised about 40% of Soviet exports to
Egypt-
19. Since the end of 1967, aid drawings have
declined, but Soviet exports have generally risen
rapidly. Deliveries of machinery and equipment also
have increased, indicating the growth of a non-aid
Egyptian market for these goods. In relative terms,
however, they have declined from about 70% of Soviet
exports to Egypt in 1964 to 45% in 1971. Soviet
oil exports have expanded under an arrangement caused
by the closure of the Suez Canal. Oil is delivered
to Alexandria in exchange for Egyptian oil from the
El Morgan fields. Egypt also has taken increased
amounts of such Soviet food products as fish, sugar,
and vegetable oils. The balance of Soviet exports
has been mostly ferrous and non-ferrous metals and
wood (see Table A-5).
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20. Except for the mid-1950s, when the present
Soviet-Egyptian economic relationship developed,
Soviet imports remained stagnant. Only aid repay-
ments kept them at the existing levels. During
1962-66, they represented about 40% of Soviet imports
from Egypt. In 1969, however, imports jumped sharply
from $171 million to $228 million and reached a
peak of $334 million in 1971. Aid repayments did not
play an important role in this growth, particularly
during 1967-70, when Moscow granted Egypt a mora-
torium on military repayments. The share has begun
to rise again, as the moratorium has ended and
economic aid repayments are increasing. In 1971,
repayments totaled $100 million.
21. Although traditional goods such as cotton,
rice, and other agricultural products still account
for the larger part of Soviet imports from Egypt,
their share has been declining. During 1957-62,
cotton accounted for about 95% of these imports and
almost all of the aid repayments. By 1964, manu-
factured and semi-manufactured products -- almost
all of it cotton yarn -- accounted for 22% of the
total. In 1971, manufactures, largely from Soviet-
built plants, accounted for 32% of total imports
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(see Table A-6). Less than one-half was cotton
yarn. Other products included aluminum products,
rolled steel, wire, automobile stampings, clothing,
fabrics, and footwear, not imported at all in 1964.
22. Recent protocols indicate that such imports
will continue to grow and diversify. Soviet imports
of such consumer goods as furniture, leather goods,
liquor, and rugs alone are scheduled to rise from
$45 million in 1973 to $115 million in 1975. In
addition, industrial products such as tractors,
steel, and heavy cargo ships also will increase.
Their value to the USSR is pointed out in a Soviet
publication:
Practical experience has shown that
assistance in creating and developing
Egypt's export economic branches and, in
particular, the branches which turn out
goods of interest to our national economy,
is a most effective form of co-operation
between our countries. At present, the
Soviet Union is providing Egypt with
technical aid in expanding the Helwan
Iron and Steel Mill and in building an
aluminum works (Nag Hammadi), a ferro-
silicon alloys plant, and a phosphorus
factory. The Helwan Mill not only meets
already Egypt's needs in many kinds of
rolled metal, but also supplies essen-
tial amounts of it to the USSR. The
shipyard in Alexandria built with Soviet
aid. now fulfills orders of Soviet foreign
trade organizations.
Soviet economic and technical aid
in electrifying the Egyptian countryside,
developing desert lands, and supplying
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it with agricultural machinery, ferti-
lizer, and chemicals will make it pos-
sible for Egypt to boost considerably
agricultural production and exports,
including deliveries to our country.
(R. Klekovsky and V. Lutskevich,
"Soviet-Egyptian Trade on the Upgrade,"
USSR Foreign Trade, June, 1972, p. 19).
India
23. The USSR accounts for 10% of India's
foreign trade and is New Delhi's second largest
trading partner, far behind the United States.
Soviet-Indian trade totaled a record $413 million
in 1971 and continued to rise in 1972. Trade
accelerated almost immediately after 1955, when
Moscow agreed to build the Bhilai steel mill. Soviet
exports to India rose from $40 million in 1956 to
$130 million in 1958. Exports to India. continued
to mount as other aid projects were built, reaching
a peak of $235 million in 1964. Soviet aid deliv-
eries rose from $5 million in 1956 to $125 million
in 1964 (see Table 6)
24. Soviet exports to India began to decline
in 1965, when aid deliveries dropped. Severe
droughts in 1965-66 triggered an economic recession
that caused New Delhi to slash public capital ex-
penditures. The cutback particularly affected
large investment in heavy industrial undertakings
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Estimated Aid Repayments
Million US
Estimated Aid
-- -
----------
Deliveries
Total
Total
-------
As a
Soviet-
Percent
Million US $
Percent
i
S
-
of Soviet
Indian
Trade
Soviet
Exports
Soviet
Imports
Million
US $
ov
et
of
Exports
Total
Economic
Military
Imports
1955
12
7
4
....
....
....
....
....
....
1956
59
40
18
5
12
1957
127
85
42
30
35
Negl.
NegL
...
Negl.
1958
181
130
51
65
50
5
5
....
10
1959
129
68
61
40
59
10
10
....
16
1960
116
47
68
15
32
15
15
....
22
1961
162
95
67
35
37
15
15
....
22
1962
196
125
72
45
30
20
15
5
28
1963
317
222
95
100
45
25
15
10
26
1964
391
235
156
125
53
50
25
25
32
1965
403
215
188
115
53
55
30
25
29
1966
384
193
191
80
41
80
45
35
42
1967
343
162
181
45
28
95
55
40
52
1968
366
183
183
75
41
100
55
45
55
1969
393
171
221
70
41
100
50
50
45
1970
406
136
270
60
44
130
75
55
48
1971
413
129
284
45
35
145
75
70
51
-- projects comprising the largest part of Moscow's
aid program in India. The Indian economy recovered
in 1968, but Soviet exports remained below their
pre-recession expansion. By 1971, Soviet exports to
India had fallen to $129 million. Exports of
machinery and equipment fell from $182 million in
1964 to $68 million in 1971 (see Table A-7). Draw-
ings on Soviet aid declined from $115 million in
1965 to $54 million in 1971.
17
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25. Soviet imports from India rose gradually in
the early years, then began to accelerate. In 1964,
they jumped from $95 million to $156 million, jumped
again in 1965 to $188 million, leveled off during
the next few years, and then climbed again after
1968 to a peak of nearly $285 million in 1971.
Soviet imports from India began to exceed exports
to India in 1967 and thereafter constituted the
growth factor in Soviet-Indian trade.
26. Much of this growth in Soviet imports was
generated by Indian repayments on the military and
economic aid debt. New Delhi generally makes these
repayments into blocked rupee accounts with the Bank
of India which are drawn down as Moscow purchases
Indian goods. Thus, Moscow must run a deficit in
its trade to enable India to repay its aid debts.
Indian repayments began to rise rapidly after 1963
and reached a peak of $145 million in 1971, when
they were about equal to the Soviet deficit. Indian
debt repayments represented about 25% of Soviet im-
ports from India during 1960-65; since then the
share has been close to 50%.
27. To help ease the transfer problem, Moscow
has accepted increasing amounts of Indian nontra-
18
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 Approved For ReleacP U 6*i -RDP79T01098A000100020001-3
ditional manufactures. During 1964-71, Moscow's
imports of Indian finished and semi-finished goods
more than doubled. These goods accounted for 42%
of India's exports to the USSR in 1971, compared
with 34% in 1964 (see Table A-8). One-third of
the increase was in machinery and equipment and
rolled ferrous metals, goods not exported anywhere
by India prior to 1966. Imports of fabrics and
clothing rose eightfold and accounted for about one-
half of the $66 million increase in manufactures.
The recent Soviet-Indian five-year trade agreement
calls for increases in Soviet imports of 15% annually,
with manufactured goods to comprise about 60% of
total imports by 1976. One innovation under the
agreement is the export of Soviet cotton to India
for processing and its return to the USSR as cotton
textiles.
Iran
28. Soviet-Iranian trade did not reach sizable
proportions until the onset of Moscow's aid program
in the mid-1960s. Trade nearly tripled during
1962-67 and by 1971 had nearly tripled again to
$226 million, making Iran the USSR's third largest
LDC trading partner.
19
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29. With the speed-up of Soviet aid in 1966,
Soviet exports began to rise rapidly, doubling in
1967 to $63 million and tripling to $188 million in
1970 during the height of construction on the Isfahan
steel mill. Aid deliveries rose from $5 million in
1966 to $40 million in 1968 and reached a peak of
$95 million in 1970 (see Table 7). When aid de-
Table 7
Million US $
Estimated Aid
Estimated Aid Repayments
Total
Deliveries
Total
Soviet-
Iranian
Soviet
Soviet
Million
Percent
of Soviet
-
Million US $
--
As a
Percent
Trade
Exports
Imports
US $
Exports
Total
--
Economic
Military
of Soviet
Imports
1960
37
18
19
....
-1961
36,
18
18
....
....
1 962
32
....
....
16
16
....
....
....
....
1063
42
24
18
....
....
1964
43
22
21
Negl.
Negl.
Negi.
Negl.
....
Neg].
1965
33
15
18
Negl.
Ncgl.
Negl.
Negl.
....
Negl.
1966
50
31
19
5
10
Negl.
Negl.
....
Negl.
1967
94
63
31
15
24
Negl.
NegL
....
Negl.
1968
128
88
40
40
45
5
5
Negl.
12
1969
218
162
56
75
46
15
5
10
27
1970
257
188
69
95
51
30
15
15
43
1971
266
155
Ill
75
48
50
25
25
45
liveries declined in 1971, so did Soviet exports to
Iran.
30. In recent years, as repayments have begun
to reach sizable levels, Iranian exports to the
USSR have climbed -- from $31 million in 1967 to
20
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$111 million in 1971. Aid repayments now represent
almost one-half of Iranian exports to the USSR.
31. The aid program has altered the composition
of trade between the two countries. Machinery and
equipment, which represented only about 10o.of
Soviet exports in 1964 (see Table A-9), now accounts
for three-fourths. The balance of exports consists
mainly of cement, sugar, paper, timber, vegetable
oil, and transportation equipment. Whereas Soviet
imports from Iran in 1964 consisted largely of
cotton, leather products, and dried fruit, by 1971,
natural gas and manufactured goods accounted for
60% of the total (see Table A-10) .
32. In 1971, the first full year of operation
of the Soviet-built natural gas pipeline, almost 6
billion cubic meters of Iranian natural gas, worth
$39 million, flowed to the USSR. This represented
some 80% of Iran's debt payments to the USSR and
accounted for 35% of Soviet imports from Iran.
The share will continue to grow as gas deliveries
reach a peak of 10 billion cubic meters in 1974,
about the time debt repayments also approach their
highest level.
33. Manufactured products, negligible in 1964,
represented one-fourth of Soviet imports from Iran
21
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in 1971. Under a five-year trade agreement for
1971-75, Moscow will increase its imports of foot-
wear, fabrics, and other manufactures and import
a number of new products, including aluminum.
Manufactures are expected to represent about one-
third of Iran's exports to the USSR by 1975.
A Look at Developments in 1972
34. Although official Soviet trade data for
1972 are not available, all indications point to a
growth of Soviet-MESA trade at least equal to the 8%
registered in 1971.4 Aid deliveries and repayments
will remain high. Large annual increases in trade
are called for in trade agreements with Egypt, India,
and Iran as well as with other major MESA trading
partners. Iranian gas exports increased substantially,
and Iraq projects a doubling of trade with the
USSR. In April 1972, Baghdad agreed to provide
1 million metric tons of oil, gradually rising to
2 million tons by 1975. Afghanistan, Cyprus,
4. The Soviet Ministry of Trade publication,
Vneshnyaya torgovlya SSSR (Soviet Foreign Trade)-is
the primary and most reliable source of Soviet trade
data used in this paper. The last issue appeared
in mid-1972 and covered trade for 1971. The con-
clusions of this section are based largely on US
Embassy reports, published trade agreements, official
LDC publications, and Soviet and LDC periodicals.
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Greece, and Syria expected sizable jumps in Soviet
trade. The first trade agreements between Bangla-
desh and the USSR called for turnover of more than
$20 million in 1972.
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I PEiNDIX
The A-]
USSR; Exports In the 11iddle East nod South Asia
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
Total
68.4
137.1
253.9
311.7
237.5
2.15.2
356.1
395.8
553.9
9
44
589.4
47
4
653.1
51
6
719.8
73
3
792.2
56.7
751.1
39.7
925.1
44.8
1,010.4
40.0
I ,102.0
50.3
Afghanistan
13.6
18.2
18.1
23.1
15.6
32.0
39.4
39.4
.
.
.
.
.
0
2
3
4
5
1
4.6
8.1
C3 pr.is
0.3
0.2
0.6
1.4
1.1
1.8
1.3
3.4
7
3.3
7
198
.
281
3
.
198
0
.
238.2
363.2
381.3
Egypt
11.0
38.4
92.2
87.7
88.0
60.8
105.7
103.3
135.2
154.8
208.
7
.
38
4
.
31
2
.
7
24
28.8
35.2
33.0
Greece
4.2
7.2
12.2
14.0
12.2
25.8
21.1
27.0
26.7
25.9
36.
.
3
.
162
3
.
193
3
171
3
135.9
129.2
India
7.3
40.4
64.7
130.0
68.0
47.1
05.4
124.8
221.9
231.8
215.0
193.
0
.
63
0
.
88
1
.
161
0
157.8
151.8
lr..n
22.4
17,2
31.7
27.4
18.8
18.0
18.1
16.1
23.8
21.8
15.3
31.
.
.
50
8
.
67
7
66
0
110.1
2
3
20.2
37.3
52.0
43.4
31.0
29.6
35.9
30.7
.
.
.
f roll
.
1
1
0.6
....
0.3
0,6
....
Israel
0.3
5.9
6 . 8
~~~~
~~~~
....
....
....
....
....
....
.
7
3
1
3
4
3
3
4
7.1
6.6
....
....
....
1.7
2.9
.
.
.
.
Jordan
Kuanil
....
....
....
0.8
....
....
....
2.1
6,7
7.8
70.6
0
9
]5A
13
6
15.3
11
6
10,8
15.2
19.3
20.4
Lebanon
1.3
1.7
2.0
1.1
3.3
4.3
4.7
4.3
4.6
6.0
5.6
....
5.6
0.2
.
0.5
.
....
.
0.6
1.2
....
Malta
....
0.3
0.8
.I.]
lt2
2.1
1.2
0.9
0.9
0.9
0.9
0.7
Nepal
Pakistan
0'3
0.1
1.7
2.0
1.0
2.4
3.0
5.1
6.2
11.0
13.2
39.0
30.4
36.8
9
3
39.4
6
4
35.7
6
0
28.7
0.0
0.4
....
....
....
0.7
3.6
2.9
....
.
.
.
Saudi Arabia
?
??
....
....
79
2
24
4
21
3
21.3
20.2
11.8
8.3
5.6
9.4
Sr, Lanka
Syria
0.3
1.6
4.3
0.6
15.2
4.7
15.1
1.0
11.0
1.8
17.0
10.1
5.2
.
13.1
.
12.2
.
12.7
22.7
34.2
42.1
47.8
57
9
46.4
4
62
57.7
76
0
Turkey
7.4
6.0
9.0
9.4
5.6
8.2
5.8
4.3
8.7
9.9
16.7
27.4
28.1
30.8
.
.
8
4
.
2
4
Yemen (Aden)
..,,
..,.
....
.,,.
.,.,
....
1.2
1.2
1.4
6.9
7
9
.
1
11
.
8
0
Yemen (Sawa)
....
0.2
1.2
1.2
2.9
3.6
2.1
2.3
3.3
.3.2
8.0
11.8
10.1
0.4
.
.
.
USSR: Imports from the Middle East and South Asia
Million US S
1955
1956
1957
1958 ?
1959
1960
1961
1962 .
1963
1964
19G5
1966
1967
1968
1969
1970
1971
Total
58.3
117.8
223.0
263.0
226.0
279.8
252.3
241.4
325.8
409.5
489.4
509.9
505.6
541.8
0
31
688.0
30
6
829.4
34
3
926.1
38
4
Afghanistan
10.9
15.1
20.7
12.7
15.6
16.9
10.7
25.3
19.6
22.7
20.2
18.8
21.3
.
4
3
.
8
5
.
5
9
.
5.4
Cyprus
0.1
0.7
0.2
0.6
1.6
1.6
1.3
0.3
3.4
4.3
4.4
145
1
.
7
170
.
228
1
.
310.6
334.1
Egypt
15.3
50.3
110.9
107.1
92.7
121.3
90.2
73.0
21
7
123.E
4
22
123.6
6
24
163.4
28
4
150.0
29.7
.
29.2
.
24.8
.
29.9
34.9
18
Greece
2.3
6.3
9.6
16.9
12.2
19.0
16.9
.
.
.
.
80
8
163
0
4
221
23
4
9
.9
2
India
4.4
18.3
42.0
50.9
GO.G
68.4
66.9
71.7
6
94.8
17
8
155.0
0
21
188.2
1
18
191.1.
19.4
1
.
30.0
.
40.1
.
56.4
.
69.
111.2
l ran 19.1
15.1
18.6
26.4
18.8
19.0
18.3
1
.4
.
.
.
1
4
4
7
4
6
6.1
Iraq 0.3
....
....
....
2.3
3.4
4.7
3.8
5.2
2.4
3.7
3.2
5,1
.
.
Ne
l
.
l
Ne
.
Israel 1.7
1.9
1.9
....
....
1.0
0.2
....
g
.
.
g
..
.
Jordan
0.3
0.8
Kuwait
Lebanon 0.9
1.8
1.6
1.7
3.9
3.9
3.9
4.0
1.1
5.3
2.4
3.8
3.9
....
3.4
....
3.0
0.1
4.2
Negl.
4.1
....
51 alto
Nepal
,,,,
....
0.3
....
....
....
0.1
0.3
0.4
0.0
11
1
1.1
23
7
0.7
31
4
1.1
38.9
Pak islau Ncgl.
0.7
5.1
7.4
3.7
4.4
4.3
3.9
9.7
2.7
3.9
29.3
27.0
.
.
.
Saudi Arabia
Sr' L..nka
0.2
4.3
4.7
8.6
9.0
6,1
7.3
22.9
19.1
17.3
10.7
16.2
11.1
13,3
16.1
3
29
Syria
1.6
5.4
23.3
6.1
7.8
4.3
0.9
14.2
17.8
18.6
20.3
18.2
20.9
30
0
37.3
29
9
19.2
30
1
.
37
3
Turkey 5.1
6.6
5.4
11.4
4.8
5.2
4.0
5.4
7.1
0.2
18.9
18.8
27.0
.
.
.
2
0
.
N
l
....
0.]
0.1
....
1.0
.
cg
.
Y onlen (Aden)
Yemen (Ssn'a)
....
0.9
0.7
0.6
1.3
1.4
1.6
1.7
1.1
1.()
1.0
0.7
1.6
1.4
1.1
0.3
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 CONFIDE NTIAL
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Million
US $
Total 589
Machinery and
equipment 373
Metals 43
Wood products 34
hoods 29
Fuels 65
Other 45
Percent
100
63
7
6
5
11
8
Million
US $
1 ,040
594
100
51
58
GIs
169
Percent
100
57
10
5
6
7
16
Million
US $
1,102
604
90
58
77
1 86
187
Percent
100
55
8
5
7
8
17
Million
US $
Percent
Million
US $
Percent
Million
US $
Percent
Total
410
100
829
100
926
100
Finished and semi-finished goods
72
18
210
29
284
31
Of which:
Rolled ferrous metals
....
....
27
3
29
3
Cotton yarn
26
6
32
4
47
5
Bags and packing fabric 2
36
9
38
5
40
4
Fabric and clothing
5
1
85
10
94
10
Fuels
I
Negl.
40
5
69
7
Traditional products
338
82
549
66
573
62
Of which:
Textile raw materials
141
34
265
32
278
30
Raw skins
19
5
41
5
29
3
Foods
121
30
188
23
254
27
I Because of rounding, components may not add to the totals shown.
2 Mostly jute.
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1961
1970
1971
Million
US $
Percent
Million
US $
Percent
Million
US $
Percent
Total
155
100
363
100
381
100
Machinery and
equipment
106
68
164
45
171
45
Fuels
9
6
29
8
35
9
Ferrous metals
7
5
25
7
25
7
Nonferrous
metals
3
2
7
2
7
2
Wood products
12
8
21
6
25
7
Foods
2
1
10
3
18
5
Other
16
10
107
29
100
26
I Because of rounding, components may not add to the totals shown.
USSR: Commodity Composition of Imports from Egypt
1964
1970
1971
Million
US $
Percent
Million
US $
Percent
Million
US $
Percent
Total
124
100
311
100
334
100
Finished and semifinished goods
27
22
79
25
106
32
Of which:
Cotton yarn
26
21
32
10
47
14
Fabrics and carpeting
Neg1.
Negl.
6
2
7
2
Clothing
...
11
4
12
4
Footwear
....
....
8
3
9
3
Crude oil
....
....
17
5
15
4
Traditional products
97
78
215
69
213
64
Of which:
Cotton
72
58
158
51
1.51
45
Rice
19
15
30
10
24
7
Vegetables and fruits
2
2
18
6
24
7
I Because of rounding, components may not add to the totals shown.
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USSR: Commodity Composition of Exports to India
1964
1970
Million
US $
Percent
Million
US $
Percent
Million
US $
Total
235
100
13G
100
129
100
Machinery and
65
68
53
equipment
182
77
88
Petroleum
11
9
products
14
6
5
4
10
8
Ferrous metals
12
5
8
6
Nonferrous metals
4
2
4
3
4
3
5
3
1
6
4
6
Newsprint
30
23
23
Other2
20
9
25
25
18
--
-
L Because of rounding, components may not add to the totals shown.
2 Including mostly chemical:: and construction materials.
USSR: Commodity Composition of Imports from India I
-------- -------19G4
1970
Million
US $
Percent
Million
US $
Percent
Million
US $
Percent
156
100
270
100
284
100
Total
119
42
Finished and semifinished goods
53
34
114
42
Of which:
22
8
20
Rolled ferrous metals
2
1
15
6
9
Fabrics
2
1
20
7
26
Clothing
Jute products
36
23
38
14
40
Traditional products
102
65
155
57
165
Of which:
4
8
Textile raw materials
4
18
Tobacco
18
69
10
20
Cashew nuts
33
12
22
Raw skins
I Because of rounding, components may not add to the totals shown.
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Table A--9
Total
machinery and
equipment
Ferrous lnctals
WOOd products
USSR: Commodity Composition of Exports to Iran
1964 1970 1971
Million Million Million
US $ Percent US $ Percent US $ Percent
22 100 188 100 155 100
2 0 159 85 120
9 9 5 8
2
2 9 3 6
5
14 64 5 3 2
2 9 10 5 19
Because of rounding, components may not add to the totals shown.
2 Mostly chemicals and cement.
other 2
USSR: Commodity Composition of imports from Iran
Total
Finished and semifinished goods
196,4 1970 1971
Million Million Million
US $ Percent US $ Percent US $ Percent
21 100 69 100 111 100
Negl. Negl. 23 33 27 24
Of which: 7 10 g
Detergent "" .... 7 10 10
Clothing .... "" 6
39
Natural gas . 2 . i 1 "" 00 40 58 9 45
Traditional products
Of which: 12 17
Cotton 7 33
Fruits and nuts 3 14 11 16
14 13
10 9
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 Approved For Release 240E-79T01098A000100020001-3
Approved For ReleasC?Fwd/IK "UAIRDP79T01098A000100020001-3
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DISSEM: 25 A r 73 STATINTL
SERIES NUMBER
ER RP 73-2
CLASSIFICATION OF REPORT
CONFIDENTIAL
DISTRIBUTION TO RC
ter- ,T-E S-
DATE OF DOCUMENT
April 1973 STATINTL
NUMBER OF COPIES
50
NUMBER IN RC
COPY
NO
(S)
RECIPIENT
DATE
.
SENT
RETURNED
1
O/DCI
25 Apr 73
2
3
D/OER
DD/OER
II
II
yj
27 Apr 713
4
SA/.ER & SA/RCA
If
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5
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6
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24
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28
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30
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31
OCT
32
D/Qsz STATINTL
II
33
SA
34
St/P
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35
State, Thomas R. Buchanan, INR/REC
27 Apr 73
36
DIA, Rm. 1508, A Bldg. AHS
37
Elmer E. Glaser, AID/FMSRD
II
38
Miss Frances L. Hall, Dept. of Commerce
Dir. International Trade Analysis Div. ,
IC
39
Wilharn 1-1, Bray, Dept. of the Treasury
AS for National Security Affairs
40
St/SD
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41
st/cs
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DP79T01098A000100020001-313
 Aooroved For Release 2000/05/15: CIA-RDP79TO1098A000100020001-3
COPY
NO. (S)
STATI NIL
Approved For Release 2000/05/15: CIA-RDP79TO1098A000100020001-3
 RECORD OF REVIEW OF
OER PUBLICATIONS FOR SECURITY/SANITIZATION APPROVAL
SUBJECT
/Rf 73- oZ
A
SECURITY REVIEW
SANITIZING
I STRUCTIONS
ITEM
DATE
INI
TIALS
REMOVE
UNEDITED DRAFT
25X1A
EDITED DRAFT
DELETE
RELEASABLE TO
FOREIGN RECIPIENT
YES
N
25X1 C
SUBSTITUTE
REMARKS
FORM 7Q Q M?j o i a u
When Filled
GROUP 1
Excluded from automatic
downgrading and declassification
 SECRET
(When Filled In)
hVP
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PICK UP
MAPS
CHARTS
PHOTOGRAPHS
L L cop, c DRAFT PAGES FINAL PAGES
DATE TO REPRODUCTION REMARKS
t i
DATE SCHEDULED
0
TO: Chief, Publications Staff, OER Date g4/ 7
Approval for reproduction of the above project number with changes or
corrections as noted is herewith submitted.
-
lex
u cnecxea and. approved
Graphics checked and approved
DDI synopsis paragraph attached
Approved For Release 2000/05/15: CIA-R
FORM REPLACES FORMS 2351, 2352
1-72 2352 AND 1653 WHICH ARE OBSOLETE SECRET
(5-13-36-5d