FOREIGN TRADE PLAN FOR 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00926A001300010013-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 14, 2016
• Document Release Date: February 22, 2002
• Sequence Number: 13
• Publication Date: June 27, 1949
• Content Type: REPORT

CL+ SSIFIC'Ya0N
Approved FoC f ea~Ql9WP802
CE AGENCY
INFORMATION. REPORT
COUNTRY Czechoslovakia
25k'4JECt orei;n Trade Plan.,
NO. OF PAGES :i
NO. OF ENCLS.
(LISTED BELOW)
SUPPLEMENT TO
REPORT NO.
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Available on loan 4"rom the CIA Library is a document entitled, "Foreign 'tirade
Plan for 19L 9". The document was prepared by the Czechoslovak Ministry of
Foreign Trade on the basis of directives from the Central Planning Commission
and in consultation with the Ministries of Food and Agriculture, monopoly companies,
all central managements, the Ministry of Industry, the Slovak Ministry of Industry,
the Union of industry, and various economic groups. The final plan was approved
by the Central Planning Commission. The document gives the bases for planning
foreign trade for 19149, analyzes the planned exports and imports by area and item,
and estimates suryLuse and deficits f 49 foreign trade. Three tables are
included in the do t: imates and th' 191,9 Plan for imports',
"Comparison of r o (c 9149 figures and showing the differences),
and tCompariso g 91.E and 191,,9 figures and showing the c'iff-
erences).
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Foreign Trade Flan for 1
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The task of the foreign trade plan ! (IA LiL?
The law concerning the Five-Year Plan proves or foreign traded
in Paragraph 26 as follows:
"Foreign trade will be organized and directed so as to assure the
necessary imports for fulfillment of the assignments set by the Five-
Year Plan, to cover the cost of imports by export, and to assure a'+n e V e h
balance
"Foreign trade will be . ively increased so that its volume
in 1953 will be about 40 percent greater than in 1948. In connection
with this, the continuous development of the economy and its resistance
to crises will be assured by the expansion of commercial contacts,
-~- k f o o g L sw~+.c.. a C1_1_11
dal-lab 1the system of economic agreement sithed-eco c y
state e . "
direc+ ive-
The foreign trade plan is a compulsoryA for the
control of foreign trade in the sense of the basic provisions of the
law concerning the Five-Year Plan.
The fulfillment of the import i x-% foreign +-.a e plan is
a condition for the fulfillment of all operational production plans;
C ~~ '-t t
the _j?;~e fulfillment of the production plans is in turn a pre-
er '"''~
requisite for the fulfillment of the export -side
plan.
The fulfillment of the foreign trade plan is therefore one of
the most important prerequisites for fulfilling the-tasks set by
the economic plan.
cI iffe_ -S
The foreign trade plan from other operational
plans in that its fulfillment is not exclusively within our power.
We deal with t foreign market; therefore the implementation of the
SEGRIE'~
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plan depends on a number of factors beyond our direct control. Therefore 25X1A
this plan will always contain a certain element of uncertainty, par-
ticularly in regard to Sit exports.
How the plan was coiled
The technique of planning, based on two years' experience in plan-
ping and on the fact that the plan s ppl4ee-tc monopoly companies, its d t '-F -fe 1-5
from previous practice in that all statistical items wt* cute
planned)not only as to areas but even down to individual countries.
The procedure in planning was as follows:
Estimates were compiled, which we submitted to the Central Planning
lard dowl4 by
Commission. On the basis of directives midoh Attie Central Planning
Commission each individual item of these estimates
was discussed with the importer or exporter, the consumer, and the
producer; that is, with the P01inistries of Food and Agriculture,
monopoly companies, with all Central Managementsfand the Ministry of
Industry, the Slovak Ministry of Industry, the Union of Industr ,
economic groups, and planning commissions. On the basis of this, we
arrived at the operational plan for 1949. g W 'this plan,
after preliminary conferences, required major conferences lasting for
30 working days, in which more than 1,000 experts participated; 40,000
individual matters were discussed. We are analyzing this plan below"
I,.,- -' `tom es
and are proposing than es- r'+t.
Establishment of the estimates
In establishing the estimates, we began with the following prInciples:
a) -Incasing the share of planned-economy states in our foreign
trade. tx c v~c~r _~ rS .
T. EgvoI' 7-r
b) e g our
OFFI
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c P sit g more realistically, that is, including items in the
plan, especially in regard to import, which are not necessary from the
standpoint of our planned economy, but which must be imported for
commercialpolitical reasons (apples, watches, wine, refrigerators,
automobiles, etc.).
These estimates were accepted by the Central Planning Commission
(3 August 1948, File Number 15266/48 - 1/6 K/15) on the condition that
the export figures be increased 6- percent or the import figures be
reduced 7 percent in the plan. Moreover, the Central Planning Commission
in principle considered the import estimates as maximum and the export
estimates as minimum.
Without going into details, it should be mentioned that the
v eS :
individual commissions did not observe these directiews;W the riginal -*
import c~ms wereA52 billion, -aiid a detailed discussion revealed,
dad 1oee~~
at the directieexere / exceeded by about 10 percent.
Table I gives a comparison of the estimates and the plan import S
for 1949. The estimates which were proposed tp the Central Planning
Commission are given in the first column of this table; in the second
column are the estimates minus 7 percent, calculated on the basis of
the above mentioned decision of the Central Planning Commission; and
in the third column is the actual plan for 1949. From this it follows
that the import plan as compiled is 5,820 million) greater than it
should be, if we take the estimates that have been reduced 7 percent
into consideration (with the exception of the textile sector, where
this 7 percent was not deducted). Table II shows the import plan for
1949 in comparison with the plan for 1948 in individual sectors and
lavic countries; III - other countries
areas (Area I - the USSR; II - S
A
with planned economy, including Austria; IVa - Germany, Soviet zone;
IVb - Germany, western zone; V - European-a1sax-in countries; including
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Italy; VI - pe l~area; VII - dollar area). Ta le III contains the
similarly compiled export plan, in which the overall trade balance and
the balance for individual payment areas are given.
Comparison of import and export
Import s
r'P
Manned imports &'1948 amounted to 40,805,000,000 crowns. We
, estimate that 37 billion will be realized, which means that 'e actual
. L-_ ..%,-,,+ a in nmmn rison with 6 planned
import's In compiling the plan for 1948, a `_sa Yrt of 20" was
mod-.open; planned exports for 1949 amount4 to 47,766,000,000 crowns.
~..~.^, ~... 9 percent reached a
Fe tle so laulate - y rie n s
figure of about 43,500,000,000 crowns of import', which we will use as
a basis for our calculations.
Export 5
r.,,-:_t ,Q tt
lanned export for 1948 was 46,421,000,000 crowns, and we assume
that about 35 billion will be realized, that is, about 23 percent less;
LAS Q
6, lowe
we also aasunie4 a safety ffieient of 25, which practically .a hi d.
In regard to considering how high the et eefficient- for 1949 should
be, we are of the opinion that it could be substantially reduced. -e
op4ni-on i-s based on the following assumptions: -#.ki&t experience
that our export production in general UwA not d a correct T sla-tiensh-tp
to the problem of exports that'.expo at'remained on the periphery of
es -
the agenda ofNresponsible agents of nationalized industry-i-likKk and that
10-
poduc#,iers~ not fulfilled 449-obligations. The most striking proof
of this
contracts, were not fu-lfid, and that the difference betweenexport
- 11P A.
p.rmmits and actual exports for 1948 A7 billion crovins. We may therefore
assume that the i ttrod~zctfono monopoly companies and the a sion? of
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the private sector from foreign trade would make it possible to reduce
the oaf f?eien1 for export3 by one-half., wh4vaba"'-A about 12
percent or air~ 5,500,000,000 crowns. This means that we may assume
that our exports will actually amount to about 42 crowns
at the best. From this it follows that if we were to reduce imports
cui eves
to 42 billion, we would achieve ae trade balance at best
oLvi eveli- ^ w`11' r
we will not, however, achieve a,.. 3~e pwymwA balancee which will
,'I iT
require an additional sum of about 4sR- _,. crowns.
We are counting on the fact that we have certain reserves, that
[o -4'e W e.rt:
is, possibilities of exports"Z"Aof about 1 billion in Areas VI and
[ -t -tk UJsPi
VII, and a reserve of about 1,000,000,000 crowns in export "C'%!in
Area I. Without this reserve we could not propose an even trade
balance, because the slightest disruption in exportA would affect the
fulfillment of imports In this connection it must be noted that
although the import plan as a whole was well fulfilled, it was not
fulfilled uniformly in all items, mainly for the following reasons:
1) The import of foods has increased, and will probably be
fulfilled more than 100 percent. This has resulted in a shift at
the expense of the most valuable and vw*t important raw materials
and investments.
2) Under the plan for 1948, we had to import a great amount of
superfluous, unplanned goods, for commercial~politieal reasons.
Territorial composition of foreign trade
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According to the Five-Year Plan, our export was to be distributed
to the various areas as follows:
(in percentage of total import or export)
Import
Year I. II. III. IV. V. VI. VII.
1948 11.8 12.3 8.8 1.6 31.9 19.1 1 5 . 3 ~N'\Ae: r eS
5 -
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Year
I.
II.
III.
V.
VI.
VII.
1949
14.6
17.1
10.1
2.3
29.1
14.4
12.4
1953
14.3
17.0
10.8
Export
3.2
27.8
14.3
12.6
Year
I.
II.
III.
IV.
V.
VI.
VII.
1948
11.7
14.4
7.7
1.8
BZ.3
18.3
13.8
1949
16.3
16.6
9.8
2.8
30.5
13.1
10.9
1953
14.7
16.4
10.4
4.3
29.9
13.0
11.3
In contrast to this, the plan as
indicates the following figures:
it appears in Tables I and II
Area
Import
Export
I
19.24
17.53
II
13.77
14.96
III
8.77
9.08
IVa
1.77
2.07
IVb
1.64
2.81
V
27.05
28.24
VI
14.58
15.17
VII
13.18
10.14
100.00
100.00
These figures indicate an improvement not only in comparison with
1948, but also in.comparison with the target for 1949.
Realistic planning
We consider the plan to be realistic. In regard to imports we
have included some items which"would like to have omitted. We, are at
the limits ofhcommercial~political capacityfand have acted one e timu&
a8-s&ptions.A In regard to exports we have started with the assumption
that an increase in actual exports from 35 billion to 42 billion crowns
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(20 percent) is the maximum of our capacity, even if we must conclude
below that the export figure is toq low in relation to prewar exports
It is evident from the above discussion that Yn tithe final balance
of -the-pl we must either increase exportsor reduce import4
In spite of the fact that an increase in the export figure would
mean a simplification of planning tasks, we cannot recommend such a
Ia.s -t
step; experiences from tiw