ECONOMIC - CEMA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600250865-4
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: July 6, 2011
• Sequence Number: 865
• Publication Date: October 10, 1949
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/07/06: CIA-RDP80-00809A000600250865-4
CENTRAL INTELLIGENCE AGENCY REPORT
INFORMATION FROM
COUNTRY USSR Satellites
SUBJECT Economic - CM4A
WHERE
DATE
PUBLISHED Jan Mar-L949
LANGUAGE Rumanian
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DATE DIST. /p Oct 1949
NO. OF PAGES 4
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
SOURCE Problems Ecoucuatce (Economic Problems), No 1, 1949. ? (Information
- 1 -
CLASSIFICATION RFSTRICTM)jES111G1E
TRIBUT:ON
!
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In Jazouary of this year, a conference of the representatives of the Soviet
Union and of the people's ?emocraoieo was held in Motcov. It was deemed uwce3-
nary att this conference to create a Council of Economic Mutual Aid for the pu,-
pose of assuring a broader:eccaomic collaboration among the participating
countries.
This step has been taken because the governments of the United States,
Grrat Britain, and some of the other states of western Europe have actually
severed trade relations with the people's democracies and the Soviet TTn?.on.
The aim cf tha council is to ezcheuge economic experiences, to organize
reciprocal, tectaical assistance, and aid in raw materials, foods, machinery,
equipment, etc. The basis of the collaboration of the council members is the
full equality at rights of all pabticipants. The council will take a o action
without the assent of the interested countries. It is open to membership by
all European countries which approve the principles of the council and are
stimulated by the same desire of broad economic collaboration.
The Council of Economic Mutual Aid advoca'E:es intensifying economic co}-
laboratin between the Soviet Union and the'people's democracies on one ha-id,
and collaboration among these latter on the other hand -- collaboration which
has been and Is one of the most important aspects of the relations of all these
states since their liberation by the Red Army.
The people's democracies have begun to construct the foundatiohe of social-
ism through the nationalization of industries, transport, banking, and foreign
trade, through increased domestic trans, and through the first steps for the
mechanization of agriculture. The Co munist and Workers' parties have struggled
to establish the governments of the people's democracies and to promote social-
Ism by identifying 'nl liquldAIst1ng tho ca*italtet elements, by cementing the
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ties between workere and peasants, and by f ulfilling and exceeding plane
through introduc.in~ socialistcome2etition. These are the internal factors
which are leading to the strengthening of national independence, to raising
the living standard ;or the workers, and to fostering socialism. The ex-
ternal factors are the political and economic assistance from the Soviet
Union and the reciprocal aid of the people's democracies.
of Economic Mutual Aid. proposes to, develop still further, -e long-term trade
agreements, In this respect, the iirngarian-Soviet trade agreement of October
1948 calls for a volume of trade of 150 million dollars over a period of 17
months. On 15 January 1949, the Soviet Union concluded with Poland an agree-
ment on the basis of which 717 million rubles of goods would be delivered by
each contracting party during 1949. The volume of Czech-Soviet trade will be
45 percent greater in 19119 than in 1948. As for Rumania, the agreement signed
on 24 January 1949 at Moscow calleu for the exchange of goods valued at 465
million rubles, an increase by 250 percent over 1948.
Mo2?eovar, today Rim4a,tsia is in a position to pay for imported raw materials
with the products of its own industries, ('us to the orders and help of USSR.
At the same time, through the activities of the Sovrcms Rumania is assured
domestic consumers' goods and export goods. Gheorghe Gheorghe-Dej, in 'tis
speech before the National Assembly on the occasion of voting for the State
P1 _ for 191:0_ set i ^ "( inn s nronrmic relation, with the Soviet Union not
only have helped and are helping to increase the economic poker of the 4tuuamian
People's Republic but also are protecting us from the serious economic dif-
ficulties which beset countries with a capitalist system."
Starting in 1947, the people's democracies hare concluded amcne them-
selves agreements of long-term economic collabora',ion, which have effected
an increase In the volume of trade between these :;oantries. They have ex-
changed technical experiences and, in some cases, L'eve c,llabors,ted in the
field of industrial irvestments. To cite a single example, the Czech-Run-
ge.rian trade agreement signed 20 November. 1948 runs for 5 years and calls
for an exchange of goods wort;i 15 billion crowns. The agreement provides
that Hungary will deliver to Czechoslovakia raw materials, food products,
and industrial electrical products; and, in exchange, Czechoslovakia will
deliver coke, wood, iron ore, and machinery. Since Czech heap industry
is highly developed, Czechoslovakia has taken orders for the delivery of
400 million d.oilars' worth of equipment to the people's democracies by
1952. This equipment will contribute greatly to the industrialization of
these countries.
The countries participating in the Council of Economic Mutual Aid pro-
pose to extend the ecoxcmic collaboration within the Council by reciprocal
investments, especially for the development of heavy industry and the best pos-
sible preservation of natural resources, in addition to long-term trade agree-
ments and scientific and technical assistance,
The importance of the Council of Economic Mutual Aid is shown by the
action of Foland and Czechoslovakia who have instituted a bilateral council
of economic cooperation in order to put into practice the Polish-Czech economic
agreement. This council proposes to develop the natural resources, exl.erience,
and productive potential of these two states. It also plans to create 20
common, industrial enterprises with equally divided capital. The first enter-
prises will be a eugar mill at Dwory, a 120,000-kilowatt electric power plant
at Oswiecim, which will deliver half of the generated electricity to Czecho-
slovakia over high-tension lines, and an important metallurgical center In
the forntier coal district. The collaboration between these two countries in
the field of transportation will be realized with Czechoslovakia opening for
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30 years a special zone on the Oder River, and Poland zone in the port of
Szczecin for transporting and storing goods.. A portion of the Czech river
fleet will use Polish harbors,
ning of every participating nation. The economies of the people's democracies
and the Soviet Union o.iffer in structure; the collaboration effected by the
Soviet Union had supplied the diverse needs of these countries. For example,
the Soviet Union furnished Poland with machinery, tractors, petroleum,
metals, coke, wood, and cotton; Bulgaria with machinery, petroleum products,
metals and ores, chemicals rubber and rubber articles; Czechoslovakia with
and surgical inetruaents, medical supplies, rubber and rubber articles, cotton,
wool, and other merchandise.
the ceramic industrv; to Hungary. coke; automobiles, rcna*.,r,rticc., err`wr, lcca
for buSiding'and for processing, paper, and mineral oils; to Bulgaria and.
Rumania, machinery, automobiles, heavl? transport vehicles, seeders and grain
sorters, lamps, special industrial chemicals, coke, refractory bricks, driving
baits, and rubber articles.
Bulgaria has sent to all the participating countries large quantities of
ores, volatile oils, tobacco, fruit juices, and furs,
Poland, he great coal supplier, has helped Czechoslovakia by sending coal,
zinc, and machinery for the paper and textile industries. Rumania received:
coke, coal, zinc, anal refractory bricks, Hungary received. coal, coke, raw
metals, and carbide. The USSR received.: coal, coke, cement, railroad material,
textiles, and RU@Lr,
Hungary sent to the USSR; cotton goods, cotton thread, electrical macidin-
ery and equipment, crude oil, and fruit preserves; to Rumania; electric bulbs,
tanner hides, medical supplies, and rubber articles; to Poland mineral oil,
medical supp13.es, allka.L ids, and fruit; to Czechoslovakia; mineral oil, lig-
nite, tanned hides, and fresh and preserved fruit..
Rumania, in turn, could be useful to the other members of the council by
sending to the USSR, lumber, petroleum and petroleum products, tarred paper,
cement, window glass, and glass articles; to Czechoslovakia, grains, most,
fate fruits, and petroleum; to Hungary, lumber, firewood, logs for building
and processing, mine.-il oil, and window glass; to Poland, gasoline, motor
fuel, petroleum coke, manganese ore, zinc.. ore, mineral oil, lumber, and corn;
to Bulgaria, gasoline, motor fuel, petroleum, tar, mineral otl, window glass
and glass articles, lumber, potatoes, and corn.
While, in each of the countries forming the new council, economy is
planned, there ie evidence of difficulties and problems in the develcpment of
this economy. The shortcomings in the economy of the respective countries
will be examined and corrected under thin broad, planned, economic collabora-
tion, en achieves:ent of the Council of Econouic Mutual Aid.
Although the industrial installations in the. west 11ad suffered much less than
those in the people 'a democratise in the course of the war, the development of in-
dustrial production is more favorable in the east, For example in the fall of 1948
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percent, in Italy 83 percent, and in Bizonia 40 percent. In contraer? to this,
indistrinl
ro
ti
i
p
duc
on
n the Soviet Union and in the people's dem:ooxacles
greatly exceeded the prewar level,
was 118 percent of the 1940 level. InC.echoslorakia production was was 110 ~n per.-
Cent Cent of the prewar level, is Poland 151 percent. In Aungar
27 e.
y
n
prcthu
..
,m_v., figures U.GCmee
greater as the eooncry of these countries develops, whereas the percentages of
increase become smaller as the bass of the prewar econc v is further extended.)
In the Rumanian People's Republic, the prewar level has been exceeded consider
enthusiastically by the working masses of Rumania and all the member countries.
Th
?
f
t
e a
me o
.
he oounoii are the broadening and the consolidating of eocI:alist
eeoelosy and the. etrcngthening of "the economic basis of the democratic and
arts-imperialistic cemnp;against the Marshall Plan, against the plans of
American imperialism to.enslave peoples," Gcmrade Pasile Luca has said that
the workers of the enterprises, of the fields, and of all institutions in the
Rmmanlaa People's Republic are actively engaged in fulfilling and oxceeding
the State Plea for, 1949.
Oalp. with the realization of the plan ia each of the pnrticipatia
g
ommtriee will the objectives of the newly created council be attained: the
recreating of the war-torn econccy of the member countries, the develop[.:ant
and the oon6olidation of soiiu*116m, the raising of the standard of living of
the workers, the guarenteiing of national indepaateence, and the strengthening
of the comp of vermw arA socialism.
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