JPRS ID: 8288 TRANSLATIONS ON USSR TRADE AND SERVICES

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. JPR5 L/8288
26 February 1979
~
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TRANSl1~TI0NS ON USSR TRADE AND SERVICES -
CFOUO 3/79)
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~ T~RANSLATIONS ON USSR TRADE AND SERVICES, (FOUO 3/79) s 26P~February 1979 ~
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. JPRS L/8288
2G February 1979
TRANSLATIONS ON USSR TRA1~E ANA SERVICES
_ (FOUO 3/79)
CONTENTS PAGE -
INTERNATIONAG ECONOMIC RII,ATIONS
Discussion on the Transferable Ruble
(Rainer poh; OSTE~iOPA WIl~TSCHAFT, No 3, 1978) 1
MANFUW~: LA.BQR, IDUCATION, DII~IC~GRAPHY -
Settlement Policy Important for Urban, Rural Grorrth
(M. Strongina; VOPROSY EKONONBIQ, No 12, 1978) 18
T�~1N3PORTATION -
l~actional Econ~mfc Zoning of the Ee.stern BAM Zone
- ( P. Ya. Baklanov, et al.; IZVESTIYA AKADF~I NALTK -
, SSSR, SIItIXA GEOGRAFICHE~SKAYA, Nov-Dec 78) 33
~ ' a- IIII - USSR - 38 FOUOj -
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INTE~iNA'~IONAL ECONOMIC RELATTONS
- DISCUSSION ON THE TRANSFERABLE RUB~,E -
Stuttgart OSTEUROPA WIRTSCHAk'T in German No 3, 1978 pp 203-216
[Article by Rainer poh examining whether the tranaferable ruble fulfills
= the functions that would ~ustify it as an international currency, ~tc] -
Introduction
[Text] "Foreign trade between the socialiatic planned economies of Eastern
~ Europe cannot readily depend upon the categoriea of the market. As in the
field of the national econonry, market categories such as price and money -
are instruments ("levers") of the dominant planning syatem. Since the
countries unified in ~he Council for Mutual Ecoaomic Assistance (CEMA)
have no total overall plan, because national sovereignty (including plan-
ning power) is protected, a fact which, in the face of existing conflicts �
of intereat is neither strange nor always successful, the CEMA is left to
prices and money; even in the CEMA nothing is free. If there is trade be-
tween the states, and if one does not wish to stay with direct barter, then
the various flows of goods must be charged and psid for respectively. For
this purpose the CEMA countries have created a special international cur-
rency, the transferable ruble (TRbl) and an inatitution which calculates
international trade in the CEMA, the International Bank for Economic Coop-
era~ion (IBEC, founded in 1963). Both are the basis for multilateral ex-
change of payments in the CEMA. .
While Western literature in general is very critical and doubtful about
the monetary properties of the transferable ruble, the common iuternational
currency of the member countries of the Council for Mutual Economic Assis- ~
- tance--it doubts whether the TRbl is real, genuine moneyl--Eastern litera-
ture (above all in the GDR and the USSR) usually does not raise this ques-
tion. Here it is considered obvioue that the TRbl is "real money" and not ~
_ ~uat a calculating unit, that the TRbl "by its nature can fulfill all the
functions of an international currency,"2 and therefore does not haae to
be afraid of a comparison with other (that is, Western) international cur-
- rencies. Difficulties in the use of the TRbl are not found to stem from
_ its "nature" but from ~he fact that "it does not yet fulfill its essential
- functions completely." In agreement with this, another passage runs:
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- "~he tranaferable ruble fulfills in accordance with its nature all the -
main �unctiens of an internaCional social3stic currency: measurement of
_ valuea, meana of payment and of accumularion."4
_ But whaC makes the TRbl inCo an international currency of socialistic
nature--which must be underetood in the sense of a limitation--is not that
- it fulfilla these functions, but how it fu1f311s them [underscoring here -
~ and later indicates italica].
_ National and International Money in CEMA
Unlike Che situation in rhe West, national monetary spheres in CEMA coun-
trie~ are isolated from one ~nother. Since monetary flows are integraCed
natioaally into the system of economic levers and function as parametera
of national economic pla~ing, they are of neceasity u~ependent upon the ~
area of their validity for their effectiveness; payments, etc, cannot be
~ realized without an additional arrangement in the plan. As a result, the
- currency monopoly, which is a necessary element in the system for direct- -
ing the eco~tomy, hinders international effectiveness of the national so-
- cialistic money. Without currency monopoly the domestic circulation of
money would be sub~ect to unplanned external influences. Just as there is
no international price connection in the CEMA (prices, too, are planning
parametera), there is also no "monetary connectian" in the sense that the
currency of a country can serve as a means for settlement of claims. The
_ national currencies of CEMA countries are therefore purely domeatic cur-
rencies. -
~ ~ The fact that money of CEMA countries cannot be effective in foreign eco-
nomic relations shows a basic fault in this moaey: none of the national
currencies servea as a general calculating unit and as a general means of
payment in the CEMA standard.
This fault also appears in the postulates of Marxist theory L~pon which the
monetary t~eory in CEMA countries is based. When, here, money is defined ' ~
- as "general equivalent...for mediation between production and circulation
of goods"5--in Marx as the "absolute" or "g~neral goode"--then money
limite~ in foreign use is no longer really a"general equivalent" for all
goods. Such money, ho~,rever, which according to Marx is "the ~ecessary
evidence of the immanent measure of value of goods, worktime," and there-
fore would have to be independent of the limits of a national planning
' area, wouZ3 have to exist in CEMA countries as a consequen~e of Marx' "Law
of Value," which is valid as a leading principle in soci~list planned
economies.
_ Marx himself emphasized in this connectian that the "flight" of money from
` the area of the domestic economy and the fulfillment of a function as a
- general means of payment independent of national borders anci national state
- peculiaritiea is a consequence of his concept o� ~money. "World money func-
_ tions as a general means of payment, and means of buying and of social
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evidence of weelth in general."8 But this "world money" has a direct _
connecCion Co national money. It is domestic money that d~.vests itself
of iCs naCional form and thereby becomes international money--"world
money." Domestic money which cannot take such a stiep is therefore not
"world money," and furthermore--because this is a consequence of Marx' -
concept of money--it is only money of limited uae.
On the o~ther hand, with this limitation of the fun~tional capabiliCy of -
the money to the area of Che domestic economy, an essential condition is
lacking for the development of intra-CEMA trade on a multilateral basis:9
? exchange relationahipe~ are accompanied on a bilateral ba~is without recog-
nition by a third country. The lack of a money which could provide a com-
mon denominator for outstanding debts, and which would make their mu1Ci- _
lateral payment possible, made the necessity of first having a bilateral
clearing which ahowed a considerable hindrance of the international dis-
tribution of labor in the CEMA. As a solution to these faults, however,
the reasone for lack of inCernationalization of the money were not re-
moved (that is, above all, the planning systems which are isolated from
, one another and which are directed toward national interests), but rather `
alonRside domeatic currencies, an international currency was established--
the transferable ruble--on the basis of which multilateral foreign eco-
_ nomic relations were to develop.
_ The TRbl, then, is international money ~aithout being national money, and ~
it is therefore, ~ust as the national money of the CEMA countries, neither
an international currency in the Western sense, nor "world money" in the
Marxist sense. It cannot even live up to the often-used concept of "World ~
- Money Representative," because the TRbl lacks essential qualities which -
would enable it to represent "world money." The fact that the TRbl, as
it is claimed in the Eastern literature, is "Che first really collective
currency in the world,"10 is the expression of a lack, eince the TRbl
- is not simply a real but rather only a collective cu~rency! Therefore,
~ by means of the central handling of all international payments in a common
currency in the International aank for Economic Co~peration (IBEC), the _
desired multilateral nature ~f trade and payment could not be accomplished: -
over 90 percent of intra-CEMA trade is developed and calculated on a bi- -
lateral basis, although this payment takes place formally for all coun-
_ tries in TRbl.ll This is also admitted in the East: "Each country balances
- its payments not unconditionally"(!) "bilaterally;" "for the planning
period as a whole, hawev~r, each country strives to balance out its pay-
ments with the other countries in their totality by means of payment of ~
the account balance with each ~ountry."12
TRbls arise in the IBEC only on the basis of flow of goods--this is what
is meant by the "goods coverage" of the TRbl. "Tranaferable rubles arise ~
primarily only from the export of goods and services from one country -
into others."~�3 Since the imports and expnrts are basically planned to -
be balanced bilaterally, a balancing and a credit of TRbls beyond the cur-
rent payment (ahort-term credit) can only occur outside the regular plan; -
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_ TRb1 reserves or crediCa preauppoae, then, dc~viatians fram the plan or -
arise because of periodic lack of synchroniz~~tion of deliveries of two
~ partners (gutomatic crediC). In Che processy the previously planned
yearly balance of accounte is done away with.14 However, theae unplanned
TRbl credits are, within Che framework ~f intra CEMA tr~de, which ie de-
_ veloped on tl~e basis of plaxu?ing, not directly usable. These problems
are ge:lerally skipped over in the Easterce literature; thue it is said:
"The TRbl is freely transferable and can be transferred from the account -
of a member country of Che IBEC to the account of another. This currency
- can be used without exception in all CEMA countriea. This meane Chat eaelt
_ country can use the proceeds from Che exporL� of ita produc ~ in TRbl freely
- for the payment of imports from ~very other country which ~~kea part in the -
multilateral payments service."1S
However, this tranaferabiliCy transpires within the framework of the bi- _
laterally (ex ante) ad~ueted balancea and quoCas. A country that has
= TRbls "assures itself the poesibility of buying goods for this currency
beyond the balanced deliveries...."lb BuC whether the poasibility of such -
- purchases also leads to actual purchases depends upon more than aimply the
- existence of a corresponding amount of TRbl credit:
- "If the deliveries vary from the plans agreed upon among the countries... .
~ the accwnulated funds for the planning period are used for the payment of
free goods of the member countriea of the CEMA which exceed the pla~a in
their mutual exchange."17
~
~ For this, however, it is first necessary that such reserve goods exist at
all in the necessary amounts, so that variationa from the plan in one di-
r~ction are balanced by variations in the other. For this, reserve goods
. would have to be built up (increasing prices to cover excess demand will
� not work for planned export trade), whereby such a"collective reserve"
naturally would create resis~ance in the creditor countries, since this
reserve would not demand payment discipline. Also, the r.oundabQUt way of =
diaposing of such a reaerve on the world market would create difficulties,
_ because CEMA generally lacks goods suitable for the warld market, and
since for this very reason one would not want to put them--if they are
available--into a reserve fund.18
The resolution of such unplanned-for TRbl credits, which are identical
with sutomatic credits, is therefore only possible by means of planned
~ deliveries of goods and services by the borrowers, for in the domestic
market nothing can be bought with TRbls--the forg~gn economic monopoly is
not touched by the general balancing operations. Therefore this "free
utilization" of TRbls does not exist. But here authors, particularly
from the Soviet Union and the GDR, are of a different opinion:
"It cannot be concluded from the planned arrangem~nt of economic relation-
ships of CEMA that there is no free purchase of goods in a given member
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country, and Chat the TRb1 therefore cannot become compleCely effective
in ita functions.i20
To thie ob~ecCion it must be said thaC free purchase cannot at all belong
to t:~e functiona of the TRbl* that it can only exist, by nature of the _
system, ae an excepCion, a fact which, to be aure, does not mean that the
TRb 1 cannoC completely fulfill ita functiona. The TRbl, which wae created
and determined by the planned economic syatem, cannot have the function -
- of a freely usable currency in the model of a market economy--the TRb~. can-
not fulfill functiona not postulated in ite foundation; thus the ob~ection
- . of Berk/Seidel is meaninglesr~.
- The limitation of the payment function of the TRbl to be sure is noticed
only by countries capable of producing eurpluaes. This syatem oi` paym~nte
is a disadvantage for the potential creditor countries because surpluses
lead to automatic credita, the criterium of which ia not their profitable-
- ness.
Credits which are automatically produced, and which arise of necessity in
the payment of bilaters~l accounta, contradict the principle that foreign
trade should make a'maximum contribution to the national income; if there
are no econ~mic calculationa as a basis for the credit, but if it rather
must be granted because the partner with the return delivery is late, then
the efficiency and profit of thQ foreign trade ia hurt. The positive
balances in TRbla in the IBEC are not used. because the creditor country _
is interested in a reserve, b ecause he is counting on long-range use of
the balance or becauae he considera the interest to be profitable, but
rather because they were buil~ up in an unplanned way and can be used only
in a planned way.
From the viewpoint of the deb tor country this disadvantage becomes an ad-
- vantage. Deviations from foreign trade plans which lead to unplanned
deficits in the balance of paymenta do not result in the appearance of -
unplanned demanda from abroad, and the impo~rt plans can sti11 be realized.
' Credit, which the creditor would not provide if economic calculations
were the decisive factor, becomes an advantage to the debtor, since he r
obtains the ;.~sdit under relatively favoralrle conditions.
Accordingly, then, improvement of the present system of pay-ments is an
area of mutual national interest. Here there are some countrie~ who
favor an efficient currency syatem21 with profitably functioning interest .
rates and with at least a partially existing convertibility of TRbl credits
_ into gold and convertible currencies (Poland, Hungary), and there are other
countries which are only interested in perfecting the existing system of
payments, because they understandably do not want to have to pay high
interest rates--even if the latter are economically justified--for their
~ generally negative account balances, but would rather look upon the credits
as functions for technical bridging and evening-out of payments. The in-
terest palicy of the IBEC therefore shows a continual search for compro- -
mises in the oppoaing interests of creditor and debtor countries.
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- In thia connecti,on ~.t sitould be noted, however, that the allocation of
resourcea and the mutual delivery of goods are nox direcrly influenced ~
by inCereaC policy, aince the amount of inCereat in Che trade relation-
ahips of the CEMA countries is not a direcC tax rate--the accountg which
are to be aub~ect to intereat appear ex poaC as plan deviations.22 But
an indirect influence can atill ariae if foreign Crade planning should,
for example, anCicipate the advantages of a low interest rate policy, and, _
, say, in bilaterally balanced plannsd exchange, set exports unrealistically _
high in order to take advanCage in this way of the automaCic payment
credits.
- , In apite of many past technical improvementa in the system of paymenta,
the basic problem which was auppoaed to be solved by the TRbl has had
to remain unaolved. Now as before, money--also as international money--
plays no independent role in the socialistic planned economy but is raCher ~
subordinated in essenCial pointe as the meana of planning. This problem
ia one created by the system and characterized by it, and r.annot be solved
by technical-organizati~sna]. reforms or by the creation of new institutions.
The Value of the TRbl
On the basis of its foreign trade ~nopoly and its economic implications,
go3.d paritiea and exchanges rates in the CEMA have a different position
than they have in market economy countries. As with all other economic
categories, they are not independent in the planned Pconomy system but
rather function as "economic levers" as means of planning.
The �act that in the agreement on the multilateral payment in TRbls a
_ fixed ~old c~ntent was established for the TRbl at 0.987,412 grams of fine '
gold, but that at the same time the TRbl is not exchangeable into gold, led
Western authors to say generally that this gold content of the TRbl.is
"fictional."23 But the maintenance of a gold atandard not only for the
TRbl but also for all domestic currencies in the CEMA cannot be explair�d -
. simply by ideological motivation.24 The CEMA countries, to be sure, de-
termine independently the gold content of their currencies and of the
TRbl, i.e., the gold price doea not arise ae a balance price on the mar-
' ket, but thia fixed gold content still makes a formal comparison with
Western currencies possible. The important thing here is the acceptance
of world mark~t prices for the CEMA price system. Here it is not neces-
sary that TRbl credits actually be exchangeable for gold--the Eastern
literature speaks ~a this connection continually of gold content or gold
- parity and not of gold coverage. Since there is no integration of tne
_ TRbl in the ititernational currency markets, gold parity is the only pos-
sibility of creating a relationship to the dollar which is independent
of its revaluations and exchange movem~nt~5 gold parity here takes over
the function of a conversion coefficient.
On the other hand, independence from gold is found in planning which makes ~
~iation of the monetary value from the gold value, and therefore the _
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autonomous determ~naCion of gold parity, possible. What the following
_ eays for the gold atandard of the domesCic currencies is also valid for
the TRbl:
"Although the prices of goQds are expressed in gold, their movement ~s ,
relatively independent of the changes in the value of gold iCself."2 ~
~
With thia it is also possible to maintain "false," i.e. economically un-
founded, relationshipa to gold and to the convertible currencies; the
"relative independence" of tt~e TRbl from gold means that only very large
variations have to be corrected from time to tiime: "The inner economic -
connection between tl~~e value of gold and Che price level becomes particu-
larly evident when the variation continually increasea."27
Thus a di.J.emma arises: the gold contenC of the TRbl is first set inde-
pendently of the market and made sub~ect to planniitg (state gold monopoly); ~
nevertheless the planning must somehow be related to the market value of
gold in order to be able to apply it at all. Only then is "gol~ in so-
cialism a means of con.acious fixing and changing of prices...." 8 For the
TRbl this means that it has only an economically founded relationship to
Western currencies when it is related to the market value of go1d, but _
that it is then divested of its value f~r planning.
Since on ttice other hand the role of gold in the Western currency syatem
is bsing reducedr a~ove all in its significance as a reference figure
for currency pariti~~a and as a general calculating unit, gold aeems to be
a doubtful vehicle sn ~he long run to form a solid basis for the calcula-
tion of TRbls into ~lester-n currencies.
, On the basis of the g~~ld standard of the TRbl, it would have been exoected
that in the past the inflationary developments of the Western currencies -
would have to have led to a continual upwar,3 valuation of the Eastern
domestic currencies and of the TRbl; in other words, to maintain the
stabil.ity of the currencies a"flexible exchange policy" would have to
~ have taken place.29 In the opinian of the Polish economist Raczkoweki,� _
however, such exchange and price revisions should take place only when
the present overvaluation of the TRbl is removed.30 The existence of a
"substantial" overvaluation of the Titbl is hereby noC only recognized ia
Western literature31 but is slso expressed implicitly in Eastern sources
when, for example, it is said with reserve that the TRbl rate must "become
- realistic."32 Authors who expressly emphasize that the TRbl rate is
- realistic still throw some doubt on the matter themselves when they call
for a"confirmation of the reality of the exchange rate."33 Or, expressed
' another way: -
"At present the CEMA countries are working on the establishment of eco-
nomically based and mutually agreed-upon relat~onships of their currencies
to each other and to the transferable ruble.i3
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This ~,s a remarkable confeasion of what Cheae relationships at present
are not: economically founded und mutually agreed upon.
Even if the economic ~ust3fication of the axchange rate of the TRb1 to,
say, the U.S. dollar, ie controversial and disputed, yet even if iC is
doubtful whether on the basis of diverging planned price structures an ~
- economically based exchange rate can exist at all--the pro~ects mentioned
by Fadd~~ew have been gcing on since 1964 and no end is in aight--neverthe-
less suci; a rElaCi.onship, which ia to a great extent administraCive, is
- in fact used for the calculation of world market prices into TRbl piices.
Since Che total inrtra-CEMA trade is caught up in world market pricea, Che
exchange calculaCion (independently of all East-West business) is of great ~
importance for the CEMA, tf a deviation from the result is necessary for
planning reasons, this can also take place by way of modificatio~ and set- `
tlement o� world maxket prices and must not take the form of a change in -
the exchange rate.35 When one talka about a deviation of the world market
prices from the contract prices in CEMA, then taken literally this means
that an unchangf+~ exchange rate is imputed.
- Since each one of the domestic currenci~s in the CEMA has a gold parity,
� ,just as the TRbl doea, the so-called official exchange ratea can be deter-
mined from it. The rates and coefficients used in commercial trade, how-
� ever, do not correspond to these official rates, because direct compari-
- son of the currencies cannot be accomplished by sucli cent.ralized raCes.
~ The relationship between domestic and foreign trade is accompliahed ac-
cording to the preferences of state planning through the foreign trade
~ monopoly, so that the exchange calculation of, say, the proceeds of a
TRbl export into a domestic cur~~ency, is ~nfluenced "according to plan" _
by the ~agplication of special. rates and coefficients which are differen- ~
- tiated accc.~rding to countrie~ and currency structures in question.
Exchange Rates and Coefficients ~
The offi~ial exchange rates do not reflect the relative buying power of
the currencies. The actual calculation comes by way of the differentiated
ratea and coefficients that are said to be, say, between Poland and other
_ CEMA countries, 2.7 to 5.7 times higher than the official rates.36
Coefficients and rates are different in that the latter are based on in-
ternational agreements and.Cherefore always valid between the national _
curr~ncies and between them and the TRbl respectively, while the "currency
exchange coefficients" are internal calculation figures.37 There is no
agreement in Eastern literature o� how the exchange rates come about. Thus
according to Huber the rates are average prices which arise from "thousands
of price comparisons."38 But Ehlert and Luchterhand come to the oppo~ite
conclusion: "...with the lack of economically founded and mutually agreed =
upon rates between the TRbl and Lhe national currencies of the member Cnun- -
tries, (it ia) hardly possible to make precise comparisons of costs and
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prices."3~ Here~ ehen~ lack of rgCes hinder~ price comparison which is
what Huber says leade to Che rate. From thie we can see Chat the national
pricea are not compgrable; wlien there are diverging price structures~ 40
there can, under Chese conditinna, be no uni�ied buying power parities.
ih~ nece~g~ry administrative setting of rates therefore alway~ inalude~
' a certain gmount of arbitrarinese which allowa room for conflicCa and for _
Che intrnduction of nation.al interesCs. From th{s on~ can get Che impree-
ei~on that it is a problem of lack of agreemenC among parCners. IIut this
is rather the consequence of lack of unified buying power paritiea in
C('.~MA. ~rom this, consequences arise for the utilization of these ratea:
"At preeent the rates have extremely conditional character; their practical
effectiveness is more or less limited."41
In pr~;ctice, the exchange r~tes become effective only in connection with
Che coefficients; only through Chem does Che TRbl come into connection
w~th the domestic currenciee. The latter are changed by a coefficient sys-
tem in accordance with Che way planning wanta the foreign trade structured,
according to the structures for the ~ooda and regions.
. By roeans of Che differentiation between rates and coefficienta, i.e. by
the double exchange calculation, thexe arise alongside the domestic cur-
renciea so-called ~oreign currencies (exchange mark, etc). The exchange
mark, for example~ is defined as followa:
"Calculating unit for the exchange calculation of world market prices of
exports or imports expresaed in foreign currencies. The VI~i [Valutamark
(exchange mark)j ia above all a planning coefficient.... It has signifi-
cance for pr~ce ad~ue.*_ment and for evaluation of the profitability of for-
eign trade." 2
The exchange wark is therefore not an independent currency unit, but rather
a connection between domeatic and foreign currencies. Domestically the
exchange mark is connected with the national currency by way of the dif-
ferentiated coefficients. In this vay the relationahip between domestic
and foreign currezcy (for example~ between the exchange mark and the mark
of the GDR) is of variable greatness,43 and depends upon the coefficient
structure at the time. This relationghip influencea the structure of
foreign trade, but, conversely, the latter does not iafluence the rela-
tionahip of domestic and foreign currency, even if presented this way in
the fina2 result and repercussiona arise.
The significance of the foreign currency for price tidjustment is that the ~
coefficients of foreign trade and its structure are regulated (along vith -
other instruments) for the businesses engaged in foreign trade so that a
profitable state-desired foreign trade comes about on the basis of economic
calculations and economic levers, although without appltcation of these
coefficients it would not be profitable. This discrepancy must be elimi-
nated by maans of a price adjustment. The difference betWeen domeatic and
foreign trade prices~ and there~+ith also the coefficienta, is financed by
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- the nationai economy. Y� ehere are positive differences Chey are paid
over to the government. In this way~ by subsidies or skimming off of
exceas profits~ Che profiCgbility of foreign Crade is inFluenced.
In the 5oviet Union Chere is a peculiarity of this rate and coe�ficient
~y~Cem because the Soviet domesCic ruble and the TRbl formally have the
same gold contenC and can be calculated in Che relationehip of 1:1. In
spite of ehe formal agreement~ the TItbl ie however an exclueively intra-
state currency and not usable in the Soviet Union. The difference for ChP
domestic ruiole comes from Che use of the coeffici.enC~ which modify the -
_ exchange rate from 1:1. But the Soviet foreign currency muat noC ~e calcu~ -
lated in TRbl through the mediation of a special exchange raCe; TRbl "ex-
change rubles" are formally the eame but are differentiated by their eco-
nomic character.
Schematically, the exchange calculation syatem of the CEMA counCries can
be represented ae follows: =
CEMA Country* Soviet Union
Domeatic ~ Exchange T~1 ~ Domestic
Currency ~ Currency I Ruble
~ 1: 1 I
-
Coefficients Exchange
Rate
The adjustment of undesired exc~:~^;p rates by means of coefficients can,
to be sure~ inaure the control of foreign trade, but the national economy
auffera. Since the exchange rates and coefficients have a"redistribu-
tion" function,44 the exchange rate as an average figure doea not bring
all partnera the same benefit. and here, too, conflicta of intere8t arise;
each country would like to ensure itself the greatest possible bene~it in
the determination of such average figures. .
If in fact--se prospects have variously been set forth--by 1979 there are
unified excha~ge rates for all payments, this will also require a change
in existiag price etructures,4S wh~ich will, however, hurt the natioaal
intere8ta of various CEMA countries; therefore the realization of such
plans in the face of the present situation in the CEMA must seem doubtful.
According to an older suggeation by Kuehne, the complete agreement of
domestic and foreign currencies should come about in order to ~llow inter-
national monetary relationships to have full ss~ap in the domeatic economy.
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The balance of paymente is suppoged~ in the process, among other things,
to be assu~~d by means of a"balance of payments oriented don~estic price
structure" 6 which, in the long run, would lead to an ~pproximaCion of
Che domestic price struc..~res. Thie auggeaCion poinCa to the dilemma
which exiete here: removal of the isolation of the monetary 4omesCic
circulation would imply an end to government price-aetiting--it could
only be r~intained if it were ad~usted to ehe eituation, and if it did
thia it would iCaelf become supertluous. zn vi~~r of the priorities of
Che CEMA countries, such suggeatiiona are not in agreement with Che preaent
economic syetem~ since Chey point toward an end to aovereign economic
planning.
Under present condiCiona, ra~ea and prir,ea are not the main criteria of
- Intra-CEMA trade, but rather the agreed-upon contingenee among the atatea.
But in order to be able to balance and calculaCe the laCCer evenly~ an
evaluation of boCh sides of the balances muat be poseible. Thie evalua-
tion in TRbl prices, however, doee not come over an international marke~
but rather in bilateral n~gotiatione, the mechanism of which can lead Co
different prices for homogenous goods as well as to special conditiona
- of the producta !quality, technical etandard, etc) not being expreased
properly. Therefore, within the framework of bilateral balancing, goods
are ad~ueted as "hard" and "soft~'� becauae it is not posaible to expreas ~
in the price the existing differencea auch as qvality, technical standards,
eCc., for examp~e, between groups of goode such as machinea and agricul-
tural producta. ~ The appearance of the CEMA contract pricea and their
connection ~ith planning prevent the TRbl from being the common denominator
for all gooda which could express all qualitative differencea quantits-
tively with the result th~t the TRbl could really be a"general equiva-
lent." Thus the IBEC credit balance in TRbl is dependent on the value
the goods being delivered at the time which forms th~ bs.ais of their
existence. As a result of this, the lack of a balanced price system
forces the countries to b1la~eral behavior: an excesa of TRbls becomea -
less valuable when it is carried over to a third partner or When it has _
been obtained from "hard" goods and must be used for "soft" goods; thus,
planning always strives for equal balaacea. "Under theae circumstancea
the CEMA countries would, in the case of a non-bilateral, multilateral ~
- trade adjustment, after a mutual adjustment of accounts, be uaequally
reararded or neglected."48 Disadvantages would accrue to all countries
~ that ex~orted "hard" goode with a relatively high degree of world market-
- ability, while on the other hand the countries that mainly exported "soft"
goods in the CEMA area would gain certain advantagea, or they could reduce ~
their poorer competitive position in the CEMA. In this respect bilateral
balancing, under the given circumstances, better suits the interests of
the more highly developed CF~A countries--at least as long as it is not
possible ~roperly to express the qualitatlve differences o: the goods
in the price.
If sums earned 3n foreign trade $re not comparable becauae of the conver-
sion by means of exchange rates, then a canetarSr grasp of the efficiency
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of foreign trade i,g pracCical~ly impossible. To be aure, by meana o� the
coefficienC system, foreign ti~rade can be inCegraCed into Che system of
economic accounting, so that ;Eor the businese firm Che profitability of
ito foreign trade can be dete~rmined~ but only after transfarmation of the
foreign Crade ~roceeda into a domeeCic economy figure with inclueion of
the ad~ustmenC through the naltional fingnce nffice. The conce~pt of a
people's economic foreign tracie profiCability as g"monetary expression
of the directly beneficial eftects of foreign trade in relation to the
expendiCure"49 is noC clearly possible, because one and the same "economic
beneficial effect" can have a completely diff~rent "monetary expresaion~"
i.e.~ a credit in TRb1s as such does not allow any inference $bout Che
profitability of the underlyi~ag transactions. The determination of for-
eigh trade prafitabi~~ty is therefore bound to Che limiCs of bilateral
_ trade relationahipa; a profit comparison between several countries is
noe poesible. The basic subordination of moneCary categoriea to planning~
which is expresaed in Che obvious difficulties o1 the TRbl, makes a sub-
ordination of the monetary grasp of foreign trade efficiency under the
criterium of plan fu1fi11menC necessary.
Convertibility of the TRbl?
It has been ahown in the above diacussion that the TRbl can neither be
converted into Western currencies nor into the national currenciea of the
CEMA couatriea. (Ir~ the following discuseion, convertibility mPana the
latter.) The domeatic character of the currencies, the dominance of the
planning categoriea, and the lack of international price correlation force-
fully hinder an optional transferability of the TRbl independent of the
uae or the origin of the amount--and thia is what one must understand by
the term convertibility. The TRbl as an international currency independent
of the aational currencies is the result of their inconvertibility (see
above). Since the domestic currencies could not be used for international
payments and could not come into direct correlation, there was the neces-
sity of creating an international currency which could only be used for
international payments. But a convertibility of the TRbl with the natioaal
currencies of the CEMA becomes under theae circumatances a contradictio
in adjecto. If the TRbl could namely be exchanged at Will for each of the
uational currenciea~ then the same would be true for them with each other,
and there would be nn reseon aot to use their own international currency
alonASide the national currencies for international payments. The con-
vertibility which is to be reached by reform of the price and currency
system as well as by an approximation of the price structures cannot coa- -
cern the TRbl but only the national currencies. If this were successful,
the TRbl ~rould become superfluous.
It is therefore aot atxange that in crea~:ion of the convertibility of the
TRbl, which Was diecussed in the "Comple~;Program" for 1980,51 no essential
progress could be made. Under these cir