USSR-EASTERN EUROPE: TRADE IN MANUFACTURED CONSUMER GOODS AND LIGHT INDUSTRIAL EQUIPMENT

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• Collection: General CIA Records
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• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 39
• Document Creation Date: December 22, 2016
• Document Release Date: March 14, 2012
• Sequence Number: 2
• Publication Date: August 1, 1986
• Content Type: REPORT

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Directorate of
Intelligence
A 1,1
USSR-Eastern Europe:
Trade in Manufactured
Consumer Goods and
Light Industrial Equipment
A Research Paper
?eunfidentia1-
SOV 86-10036
EUR 86-10026
August 1986
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USSR-Eastern Europe:
Trade in Manufactured
Consumer Goods and
Light Industrial Equipment
A Research Paper
This paper was prepared by
CEMA Task Force, Office of Soviet
Analysis and Office of European Anaysis.
Comments and queries are welcome and may be
addressed to the Chief, CEMA Task Force
Confidential
SOV 86-10036
EUR 86-10026
August 1986
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Summary
Information available
as of 25 June 1986
was used in this report.
USSR?Eastern Europe:
Trade in Manufactured
Consumer Goods and
Light Industrial Equipment
In 1983 the USSR demanded that Eastern Europe play an increased role
in its effort to improve the lot of the Soviet consumer. Beset with mounting
economic problems, Moscow intensified pressure on its allies to supply
more and better quality consumer products for Soviet workers and to
expand exports of light industrial equipment for its long-term moderniza-
tion drive. Soviet threats to reduce critical energy exports spurred East
European compliance in 1984-85. The Kremlin, despite tough talk, appears
to have backed off from this strategy for 1986-90, apparently because it is
reluctant to threaten political stability and economic growth in the region
with high trade targets. Inability to purchase Western consumer products
and machinery because of hard currency shortfalls or to achieve hoped-for
productivity gains at home, however, may force the Soviets to reapply
pressure on Eastern Europe to provide more consumer goods and equip-
ment before the end of the decade.
Imports of manufactured consumer goods from Eastern Europe?some 4.7
billion rubles' worth in 1984?currently account for 15 percent of total
Soviet purchases from the region. Moscow allocates only 3 percent of its to-
tal imports from outside Eastern Europe to such goods. Because they are
reluctant to spend scarce hard currency on Western consumer goods and
have little interest in products from less developed countries, the Soviets
have relied upon their Council for Mutual Economic Assistance (CEMA)
partners for more than half of their imports of consumer goods, with the
bulk coming from East Germany, Czechoslovakia, and Poland. Clothing
and shoes represent the largest commodity category. Purchases of pharma-
ceuticals and cosmetic items, however, have assumed greater importance in
recent years. Moscow sells far fewer consumer goods to Eastern Europe
than it buys; such products account for only 1 percent of total East
European imports from the USSR.
The USSR imported 735 million rubles' worth of East European light
industrial equipment in 1984. The purchases were almost double their 1980
level, reflecting the Soviets' commitment to modernizing their domestic
plant and equipment. CEMA partners?primarily Czechoslovakia and
East Germany?provide 90 percent of Soviet imports of textile equipment.
In response to Soviet plans to expand product assortment, these suppliers
have dramatically changed the composition of their deliveries to include
smaller and more varied processing lines.
111
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SOV 86-10036
EUR 86-10026
August 1986
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Political considerations have been an important influence on the level of
East European goods demanded by the Soviet Union and on Moscow's
deliveries to Eastern Europe:
? Increasing supplies of Soviet household appliances appeared in Polish
stores throughout the 1980s to aid the Polish leadership in pacifying
restless workers.
? Because of its worsening economic conditions, Bulgaria was protected
from much of the cutback in Moscow's exports of consumer goods to
Eastern Europe in recent years. Although Sofia imported fewer passen-
ger cars?which went instead to Moscow's hard currency customers?it
received compensation in more appliances and automobile spare parts.
? Their political stability and relatively healthy economic performance
have made East Germany, Czechoslovakia, and Hungary victims of even
greater reductions. Exports rebounded somewhat in 1983 and 1984, but
were still lower than a decade earlier.
? East Germany and Czechoslovakia, with the brightest prospects for
increased output, are slated to remain the Soviets' leading suppliers of
consumer goods in 1986-90.
? Poland and Romania, who are courting Moscow for increased aid to their
ailing economies, have agreed to boost exports of consumer products in
the next five years dramatically over current levels.
Moscow has relaxed?at least for the near term?its demands on Eastern
Europe for rapid increases in deliveries of consumer goods. Soviet pur-
chases for 1986-90 are targeted for the slowest increases in 15 years.
Gorbachev also has shifted the focus of Soviet buying to machinery and
technology, banking on the long-term payoff of higher Soviet production of
consumer goods and decreased reliance on East European finished
products.
This pragmatic approach reflects Moscow's awareness of the risks in
squeezing its allies too hard. An aging stock of plant and equipment and
tight investment funds will probably hold down growth in East European
production of consumer goods. To meet increased Soviet demands, regimes
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in the region would face the unpalatable choice of losing hard currency
earnings from sales to the West or cutting supplies to their own popula-
tions. By shifting its demands, Moscow apparently has chosen to avoid the
hazards of greater political instability in Eastern Europe, additional debt
service problems, and reduced access to Western materials and technology.
Current trends may compel the Soviets to reaccelerate their requirements
before the end of the decade. A drop in Soviet hard currency revenues?the
product of falling oil prices and faltering production?may press Moscow
to delay or curtail consumer goods purchases from Western suppliers,
filling the void with CEMA products. Additional purchases from Eastern
Europe could also result from:
? Production shortfalls in Soviet light industry.
? Stagnating labor productivity and/or failure of worker incentive
programs.
? Increased health problems from the Chernobyl' accident.
If Moscow raises the ante, we would expect to see increased bickering over
the volume and composition of such trade and some foot-dragging by the
East Europeans in fulfilling agreements. The loudest complaints probably
would come from Hungary, East Germany, and possibly Czechoslovakia?
the regimes with the most consumer-oriented domestic policies and the
greatest reliance on consumer goods for hard currency revenues.
v Confidential
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Contents
Page
Summary
111
Introduction
1
Trade in Manufactured Consumer Goods
1
Trade Trends, 1970-84
Trade Partners
The Composition of Soviet Imports
4
The Soviet Export Picture
7
Moscow's Imports of Light Industrial Equipment
9
CEMA Cooperation Agreements: Pressure for Integration
10
The Raw Materials Base: Interkhimvolkon
10
Textile Machinery: Intertextilmash
11
Finished Goods: The Long-Term Target Program
12
Prospects: Tough Talk, Modest Pressure
13
Appendixes
A. Statistical Tables of Trade in Manufactured Consumer Goods
17
B. Reconciling Soviet and East European Trade Data:
27
A Methodological Note
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USSR?Eastern Europe:
Trade in Manufactured
Consumer Goods and
Light Industrial Equipment
Introduction
At the CEMA Council Meeting in East Berlin in
October 1983, Moscow notified its allies that it would
no longer tolerate the large trade imbalances and
subsidies that characterized Soviet economic ties to
Eastern Europe during the late 1970s and early
1980s) Beset by mounting economic problems at
home, Premier Tikhonov stated in blunt language that
future deliveries of fuel and raw materials?upon
which the East Europeans are critically dependent?
would be tied to increased exports of high-quality
intermediate goods and equipment from the CEMA
partners. In particular, the Soviets demanded a great-
er share of the manufactured consumer products that
contribute to the higher standard of living enjoyed by
the East European populace. They also called for
more light industrial machinery.
As the new General Secretary, Gorbachev embraced
and intensified the campaign for more consumer
goods and light industrial equipment from Eastern
Europe as part of his overall strategy to revitalize the
Soviet economy. The Soviet leader knows that, if his
plans to modernize the Soviet industrial base are to
work, he must move quickly to improve worker perfor-
mance. A key element of his strategy to spark greater
labor effort in the short term focuses on stocking
shelves with sought-after East European clothing,
shoes, and associated goods. For the longer term,
Moscow is seeking East European machinery to retool
and expand production capacity in the USSR's ne-
glected light industry.
Trade in Manufactured Consumer Goods
Trade Trends, 1970-84. Manufactured consumer
goods?which include such items as fabrics, clothing,
shoes, housewares, pharmaceuticals, cosmetics, appli-
ances, and automobiles?are the third-largest com-
modity group, after machinery and food and raw
' CEMA?the Council for Mutual Economic Assistance?is made
up of the USSR, Poland, East Germany, Czechoslovakia, Hungary,
Bulgaria, Romania, Mongolia, Cuba, and Vietnam. In this paper,
however, our discussion of CEMA excludes the three non-European
nations. The terms Eastern Europe and CEMA partners are used
interchangeably
1
Confidential
materials, of Soviet imports from Eastern Europe. In
1984, they accounted for 15 percent of Soviet pur-
chases from the region. The USSR, reluctant to spend
scarce hard currency on Western goods and little
interested in low-quality products from less developed
countries, has relied upon its CEMA partners for
more than half of its consumer goods imports. In spite
of the brisk growth in these imports?from roughly
1.4 billion rubles' worth in 1970 to nearly 4.7 billion
rubles' worth in 1984?they grew at three-fourths the
rate of total purchases from the CEMA countries,
reflecting Moscow's higher priority for machinery and
equipment imports from its allies. Measured in real
terms, the Soviets roughly doubled imports of con-
sumer goods from Eastern Europe between 1970 and
1984 (see figure 1).2 They sustained their most rapid
real growth in 1975-78, only to level off in 1979-81.
Faced with the traumas of the second global oil shock
and the Solidarity uprisings in Poland, Eastern Eu-
rope, with Soviet approval, put consumer goods trade
with the USSR on hold.
Soviet efforts to reduce large trade surpluses with the
region in recent years have produced brisk growth in
East European exports of consumer goods to the
USSR. During 1981-84:
? Consumer goods accounted for some 40 percent of
the rise in volume of East European exports to the
Soviets.
? Eastern Europe's nominal trade deficit with the
USSR would have been roughly twice as large
without the 13-billion-ruble increase in net exports
of these goods.
Official Soviet data published in Vneshnyaya Torgovlya SSSR
(Foreign Trade USSR) are cited, except where specified. Trade in
constant prices is derived from Hungarian indexes. See appendix A
for a more detailed accounting of consumer goods exports and
imports. Appendix B explains our methodology for estimating trade
in major commodity categories omitted from Soviet statistics
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Figure 1
Eastern Europe: Exports of Manufactured
Consumer Goods to the USSR, 1970-84
Billion rubles
5
4
Current prices
3 Constant
1970 prices
1 1 1 1 1 1 1 1 1 1 I I I I
0 1970 75 80 84
Imports in constant prices are derived from Hungarian foreign trade price
indexes for consumer goods. Data for 1984 are preliminary.
Source: Foreign Trade USSR and Hungarian Foreign Trade Statistical Yearbook.
310075 8-86
Declines in Polish and Hungarian exports?a result of
trade adjustments with the West necessitated by the
worst of the debt crisis in 1982?caused a slight drop
in real East European exports to the Soviet consumer
market during 1983. In response to continued Soviet
arm twisting, however, sales in 1984 jumped almost
10 percent in real terms, and preliminary data indi-
cate similar growth in 1985.
The East Europeans, however, expanded sales to hard
currency markets at an even higher rate, as the region
directed exports to the West to pay debt service to
Western banks.3 Moscow's allies, which could offer
few other goods that US and Western European
buyers wanted, shipped their top-of-the-line consumer
products to the West and delivered generally shoddy
merchandise to the Soviet market. Hard currency
exports grew so rapidly that by 1983 over one-half of
Hungarian clothing exports went to Western buyers,
compared with one-fifth in 1970 (see table 1). Poland
' Czechoslovakia proved the exception. Conservative borrowing in
the West during the 1980s spared the Czechs from the regional
crunch for hard currency sales.
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Table 1
Eastern Europe: Shares of Selected
Exports of Consumer Goods
to the Developed West, by Country
Percent
1970
1983
Knitted garments
Bulgaria
0.9
12.6
Hungary
20.0
31.0
East Germany
18.1
25.8
Clothing and linens
Bulgaria
3.9
9.9
Hungary
20.6
55.0
East Germany
25.8
35.4
Poland
14.2
30.9
Leather footwear
Bulgaria
6.4
20.5
Poland
22.6
69.5
Romania
30.0
67.6
and Romania sold nearly 70 percent of their leather
footwear exports to the West in 1983?more than
double the shares in 1970. Even the surge in deliveries
of consumer goods to the USSR in 1984-85 did not
dampen comparable East European sales to hard
currency buyers, undermining Moscow's implicit goal
of reorienting its allies' trade away from the West.
In contrast, manufactured consumer goods play a
minor role in Soviet exports to Eastern Europe.' They
currently comprise only 1 percent of total Soviet sales
by value to the CEMA partners. Real growth in
Soviet exports of consumer goods surged during 1970-
78, but plunged sharply in 1979-81, reflecting Mos-
cow's own domestic production woes in light industry
(see figure 2). Although exports rebounded slightly in
1982-84 from their 1981 nadir, in real terms they
were lower in 1984 than a decade earlier.
? Although the standard Soviet trade classification of manufactured
consumer goods does not include passenger cars, motorcycles, and
associated spare parts, we have incorporated such data into our
discussion of Soviet exports because of their large volume and
importance to the East European consumer. Automobile purchases,
in comparison, constitute less than 1 percent of total Soviet imports
of consumer goods from Eastern Europe and are omitted.
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Eastern Europe: Imports of Manufactured
Consumer Goods From the USSR, 1970-842
Million rubles
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Figure 3
Eastern Europe: Exports of Manufactured
Consumer Goods to the USSR, by Country,
1970-84
Million rubles
1,000
800
600
400
200
1 1 1 1 1 1 1 1 1 1 1 1 1
Current prices
Constant
1970 prices b
0 1970 75 80 84
a Includes passenger cars, motorcycles, and associated spare parts, which
are not listed in the Soviet classification of manufactured consumer goods.
b Imports in constant prices are derived from Hungarian foreign trade
indexes for consumer goods. Data for 1984 are preliminary.
Source: Foreign Trade USSR and Hungarian Foreign Trade Statistical Yearbook.
3111076 8.86
Trade Partners. A strong record of consumer goods
production and high overall economic performance
have underpinned Moscow's choice of consumer goods
suppliers within Eastern Europe. East Germany?
renowned for stylish products and large selection?
took over as the Soviets' major CEMA supplier in
1982 (see figure 3). Western press sources have noted
that the East Germans have moved vigorously to
restructure production and alter specifications to meet
Soviet requirements. Czechoslovakia follows closely
as the second-leading exporter, its position boosted by
average annual increases in exports of some 18 per-
cent during 1981-84.5 Rapid growth in Czechoslovak
exports to the Soviet market has been buttressed by
Prague's staunch commitment to CEMA integration
and by output gains in consumer goods production?
an area where Czechoslovakia is trying to capitalize
on its historical advantage.
Czechoslovakia actually became the leading supplier of Soviet
consumer goods in 1984 by a very slim margin, but preliminary
1985 data indicate Eait Germany regained the first position.
1,200
1,000
800
600
400
200
I 1
0 1970
1 I 1 I i I 1 1 1
East Germany
Czechoslovakia
Poland
Hungary
Bulgaria
Romania
75 80 84
Source: Foreign Trade USSR.
3
310077 8-86
Once Moscow's prime source of consumer goods in
Eastern Europe, Poland was unable to maintain its
deliveries in the early 1980s. Consumer goods output
dropped sharply because of economic and political
upheaval, leaving less for both consumption and ex-
port. The Polish leadership won relief from some of its
export commitments to Moscow after the declaration
of martial law in December 1981. With Moscow's
approval, Warsaw redirected some consumer goods
earmarked for delivery to the Soviet Union to the
Polish domestic market to placate workers.
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In the second tier of CEMA suppliers, Hungary and 25X1
Bulgaria raised their annual volumes of consumer
goods exports by 11.7 and 15.5 percent, respectively,
in 1981-84, although hard currency trade pressures
led Hungary to reduce its exports slightly in 1983.
Romania, with the weakest economic links to the
USSR and mounting financial and production diffi-
culties, allowed its deliveries of consumer goods to
stagnate during the early 1980s.
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Figure 4
Eastern Europe: Imports of Manufactured
Consumer Goods From the USSR, by Country,
1970-842
Million rubles
300
I I I I I h I I I I I I I
Poland
Bulgaria
Hungary
Czechoslovakia
East Germany
Romania
0 1970 75 80 84
Includes passenger cars, motorcycles, and associated spare parts, which are
not listed in the Soviet classification of manufactured consumer goods.
Source: Foreign Trade USSR.
310078 8-86
Political considerations have been an important influ-
ence in determining the level of Soviet consumer
goods exports to Eastern Europe (see figure 4). Mos-
cow stepped up its support for Warsaw?currently the
leading recipient of Soviet consumer goods in
CEMA?to aid the Polish leadership in limiting
political fallout from severe domestic shortages. Po-
land enjoyed Moscow's favor in two ways?with a
boost in deliveries of consumer goods and an even
greater reduction in its export commitments. Al-
though Bulgaria retained its position as the USSR's
second major purchaser of consumer goods in CEMA,
the Soviets trimmed average annual deliveries of these
goods to Sofia slightly in 1981-84 to reduce their
trade surplus. Political stability and relatively healthy
economic performance made Czechoslovakia and East
Germany targets for even deeper cuts during 1979-83,
although exports rebounded in 1984. Hungary, too,
felt the pinch of Soviet adjustments in consumer
goods exports during the early 1980s, but managed to
obtain increases in deliveries in 1982-85. Sales to
Romania remained at low levels.
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Figure 5
Eastern Europe: Exports of Manufactured
Consumer Goods to the USSR, by Commodity,
1970-84
Billion rubles
6
Appliances/
other
Medical goods b
Household
goods c
Wearing
apparel d
Textiles
0 1970 75 80 84
Household appliances, bicycles, watches, TV sets, cameras, and other
miscellaneous consumer items.
h Includes pharmaceuticals, cosmetics, and soaps.
c Includes household utensils, tableware, and furniture.
d Includes clothing, shoes, and miscellaneous haberdashery goods.
Source: Foreign Trade USSR.
310079 8.86
The Composition of Soviet Imports. As a counter-
point to the USSR's comparative advantage in the
production of durable consumer goods, Soviet imports
from Eastern Europe are weighted heavily in favor of
"soft" commodities (see figure 5).6 Soft goods at
present comprise some 80 percent of Soviet purchases
of consumer goods from the region?about the same
as in 1970. Within this category, clothing imports
dominate, with Moscow tailoring its purchases to
match specific domestic needs (see figure 6):
? Shoe imports?which reached almost 40 million
pairs in 1984?offset Soviet production shortfalls
and offered greater size, quality, and style selections
to Soviet consumers.
As used in the strictest sense in both Soviet and US economic
nomenclature, the term "soft goods" refers to fabrics, clothing,
shoes, and other wearing apparel. We have expanded our definition
of soft goods to include other "nondurable" items, such as dishes,
glassware, pharmaceuticals, cosmetics, and soaps. Appliances, oth-
er household machinery, furniture, and miscellaneous consumer
goods fall in the durables category.
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Figure 6
Eastern Europe: Who Clothes Ivan?a
Million rubles
450
400
350
Jewelry
Hats
Stockings
Undergarments
100
50
0 Bulgaria Hungary
Source: East European and Soviet
foreign trade handbooks aid journals.
a Data are for 1983.
Poland
East Germany
Romania
Czechoslovakia
310330 8436
? Changing Soviet lifestyles and tastes have spurred
increased imports of sportswear and leisure-time
clothing. Soviet consumers demand jogging suits in
particular.
? Children's clothing and blue jeans account for a
growing share of imports, supporting increased So-
viet attention to the needs of young people.
? Imports of men's and women's outerwear, still the
mainstay of Soviet buying, include more synthetic
fabrics and clothing with greater color and variety
to satisfy the increasingly sophisticated tastes of
consumers.
Rapid growth in imports of pharmaceuticals reflects
Soviet concern over growing health problems and
severe domestic drug shortages. To reduce heart
disease?a major cause of climbing Soviet mortality
rates?Moscow has stepped up purchases of East
European cardiac, circulatory, and blood pressure
medicines. The CE,MA countries also fill Moscow's
5
high-priority prescriptions for analgesics, antibiotics,
and drugs for stomach disorders. The lack of re-
sources and incentives for Soviet enterprises to pro-
duce small-ticket goods has contributed to equally
large jumps in Soviet purchases of cosmetics and soap.
Moscow shops almost exclusively in Eastern Europe
for several other consumer goods. The Soviets pur-
chase more than 75 percent of their total imports of
linen fabric, jewelry, dishes, furniture, toothpaste,
household sewing machines, baby carriages, lamps,
and stationery in the region. Over half the Soviet
imports of carpets, hosiery, toys, glassware, books,
musical instruments, outerwear, undergarments, and
sports, hunting, and camping gear come from CEMA
suppliers.
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Figure 7
Eastern Europe: Exports of Manufactured Consumer
Goods to the USSR, by Country and Commodity, 1984
Poland
Total: 894.9 million rubles
Haberdashery 1.7%
Furniture 4.9%
Recreational items 5.1?/0
Cosmetics 5.6%
Textiles 5.8%
Shoes 7.2%
Appliances 14.1%
Clothing 22.9?/0
Pharmaceuticals 32.7%
Bulgaria
Total: 629.7 million rubles
Recreational items 1.1%
Shoes 2.6%
Haberdashery 4.5%
Furniture 8.9%
Cosmetics and soaps 26.3%
Pharmaceuticals 28%
Clothing 28.6%
East Germany
Total: 1026.9 million rubles
Clothing 23.5%
Shoes 2.1%
Housewares 2.4%
Haberdashery 6.2%
Recreational items 7.8%
Appliances 8%
Cosmetics
and soaps 9.7%
Textiles 10.10/a
Furniture 14.4%
Pharmaceuticals 15.8%
Includes recreational items.
Source: Foreign Trade USSR.
Hungary
Total: 684.2 million rubles
Furniture 3%
Haberdashery 5.5%
Textiles 6.1%
Appliances. 6.2%
Shoes 19.1%
Clothing 23%
Pharmaceuticals 37.1?/0
Czechoslovakia
Total: 1031.2 million rubles
Shoes 31.9%
Housewares 3.2%
Pharmaceuticals 6.3%
Haberdashery 6.6%
Appliances. 7.7%
Textiles 10%
Furniture 12.2%
Clothing 22.1%
Romania
Total: 396.2 million rubles
Pharmaceuticals 0.7%
Haberdashery 2.6%
Textiles 4.3%
Appliances 4.6%
Shoes 18.4%
Furniture 25.9%
Clothing 43.5%
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Soviet purchases exhibit broad areas of differentiation
among East European trade partners (see figure 7):
? East Germany provides the widest range of consum-
er products and changes one-third of its product
selection annually?high by Soviet standards, but
far below Western trade practices. Moscow turns to
East Berlin in particular for hosiery, carpets, toys,
blankets, china, soaps, and baby carriages.
? A large portion of Czechoslovakia's deliveries come
from its comparatively sophisticated shoe and cloth-
ing industries. Prague's other bestsellers on the
Soviet market include jewelry, hats, glassware,
pianos, and wool fabric.
? Polish exports in the early 1980s shifted to pharma-
ceuticals and appliances?despite severe domestic
shortages?because of a decision to retain more
clothes for personal consumption. The Poles, howev-
er, remained the Soviets' major source for table
linens, cooking ranges, stamps, silk fabric, and
sports, hunting, and camping gear.
? Hungary continues to send the Soviets mostly shoes
and clothing. Budapest is not a preeminent supplier
in any consumer goods category, but increased its
share of pharmaceutical deliveries during 1981-84.
? Bulgaria, known for its high-quality perfumes,
raised its proportion of cosmetic, pharmaceutical,
and toothpaste exports over 1975 shares. Sofia's
traditional mainstays of fur coats and clothing
expanded at a much slower rate.
? Offering fewer types of commodities for export than
its East European neighbors, Romania has focused
on sales of clothing, furniture, and shoes.
The Soviet Export Picture. Soviet exports are concen-
trated in "heavy" consumer products (see figures 8
and 9). To meet their own domestic needs, however,
the Soviets altered the mix of these durable goods and
cut real deliveries to the East European market
throughout the 1970-84 period. Moscow's priority
program to develop its fledgling automotive industry
in the early 1970s generated a surge in exports of
passenger cars to Eastern Europe, from 84,000 units
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Figure 8
Eastern Europe: Imports of Manufactured
Consumer Goods From the USSR, by Commodity,
1970-84 a
Million rubles
1,200
1,000
800
600
400
200
Appliances/
other,
Medical goods
Passenger cars
Passenger car
spare parts d
0 1970 75 80 84
Negligible trade in household goods, textiles, motorcycles, and motorcycle
spare parts are not included in totals.
b Includes household appliances, bicycles, watches, TV sets, cameras, and
other miscellaneous consumer items.
, Includes pharmaceuticals, cosmetics, and soaps.
d Data omitted for 1970 because of change in trade classification.
Source: Foreign Trade USSR,
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in 1970 to a peak of 388,000 units in 1978. By 1975,
auto sales overtook appliances and other household
machines as the leading category of exports.
When Moscow abandoned plans to expand automo-
bile production capacity during 1976-80, the Soviets
curtailed car exports to Eastern Europe in favor of the
domestic market and exports for hard currency. Sovi-
et auto exports probably have appeared generous to
Soviet consumers because Soviet car ownership still
has not reached the level in Eastern Europe during the
early 1970s. The quantity of automobiles exported to
Eastern Europe, however, was slashed some 60 per-
cent from 1980 to 1983, as deliveries to the developed
West rose by almost 40 percent. Eastern Europe
received partial compensation in the form of more
automobile spare parts, which stemmed demand for
cars somewhat by enabling current owners to prolong
the service lives of their vehicles. Increased exports of
appliances also helped offset the drop in automobile
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Figure 9
Eastern Europe: Imports of Manufactured Consumer Goods
From the USSR, by Country and Commodity, 1984a
Poland
Total: 258.5 million rubles
Passenger cars 4.2%
Recreational items 6.9%
Pharmaceuticals 7.6%
Car spare parts 14.3%
Appliances 67%
Bulgaria
Total: 186 million rubles
Other 0.8%
Recreational items 5.1%
Pharmaceuticals 5.2%
Passenger cars 24.4?/0
Car spare parts 26.5%
Appliances 38%
East Germany
Total: 122.1 million rubles
Pharmaceuticals 6.1%
Recreational items 9.7/0
Appliances 14.2%
Passenger cars 22.3%
Car spare parts 47.6%
Hungary
Total: 180.3 million rubles
Other b 1.5%
Housewares 1.1%
Recreational items 4.3%
Pharmaceuticals 5.5%
Car spare parts 22.3%
Appliances 29.10/o
Passenger cars 36.2%
Czechoslovakia
Total: 146.9 million rubles
Pharmaceuticals 6.2%
Recreational items 7.8%
Passenger cars 18.1%
Car spare parts 26.9%
Appliances 41%
Romania
Total: 50.3 million rubles
Motorcycles 1.3%
Recreational items 4%
Pharmaceuticals 4.9%
Car spare parts 16.5%
Appliances 73.3%
"Includes passenger cars, motorcycles, and associated spare parts, which
are not listed in the Soviet classification of manufactured consumer goods.
hTextiles and motorcycles.
Motorcycles, motorcycle spare parts, and miscellaneous consumer items.
Source: Foreign Trade USSR.
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deliveries to Poland, Bulgaria, Czechoslovakia, and
Hungary. By 1984, household machines once again
represented the largest group of Soviet consumer
commodities exported to the region.
The composition of consumer durables exported to
Eastern Europe varies widely by country:
? Poland, with the most critical requirements for
household goods, receives refrigerators, televisions,
radios, cameras, movie projectors, and watches.
? Household sewing machines, washing machines,
lamps, televisions, and automobiles top Bulgaria's
shopping list.
? The lion's share of vacuum cleaners, furniture, and
enamelware goes to Hungary. Directed by CEMA
agreement to specialize in bus production?at the
expense of automobiles?Budapest lays claim to
almost half of the Soviet passenger cars exported to
the region.
? Czechoslovakia's leading purchases include radios,
televisions, toys, and sports, hunting, and camping
equipment.
? East Germany is weaning itself from most of its
Soviet consumer durable imports and instead is
expanding its own appliance industry. East Berlin,
however, has increased purchases of car spare parts.
? Romania concentrates its buying on bicycles and
motorcycles.
Moscow's Imports of Light
Industrial Equipment
The USSR spent 735 million rubles for East Europe-
an light industrial equipment in 1984?about 4 per-
cent of its imports of all types of machinery and
equipment from the region.' Measured in real terms,
imports of light industrial machinery grew at an
average annual rate of 14 percent in 1976-79 and,
after a lull in 1980, climbed back to some 11 percent
per year during 1981-84. Purchases of such equip-
ment have risen dramatically since 1975, indicating
' Soviet and East European sources only report trade in equipment
used to manufacture wearing apparel and do not provide data on
other consumer goods machinery.
9
Confidential
that Soviet officials have acted on their rhetoric to
modernize light industry's aged capital base.
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Because of hard currency constraints, the Soviets
have increasingly called on their CEMA partners for
these goods. Eastern Europe supplied 87 percent of
Moscow's imports of light industrial equipment dur-
ing 1981-84, up from 73 percent in the late 1970s.
Czechoslovakia?acknowledged as a world leader in
textile technology?is by far the major supplier in
CEMA.8 East Germany, the next leading exporter,
sells mostly textile dyeing and finishing equipment.'
Data in the CEMA Statistical Handbook show that
the other East European partners were unable to
boost deliveries to the USSR because they allowed
their own spinning and weaving machine-building
industries to atrophy. Instead, they imported technol-
ogy and equipment from the West to upgrade domes-
tic fabric output.
Textile equipment currently accounts for about 90
percent of Soviet imports of all light industrial ma-
chinery from Eastern Europe.' The emphasis on
textile equipment implies that Moscow has targeted
fabric production for special attention?probably a
reflection of consumer interest in new textiles and the
advanced age of the sector's capital stock. In 1984 the
region provided over 90 percent of all Soviet imports
of textile machinery. The imports from Eastern Eu-
rope were double their 1975 level, while imports from
the West were virtually unchanged, accounting for
less than 100 million rubles. In addition, East Europe-
an manufacturers?mostly Czechoslovakia, East Ger-
many, and Poland?dramatically changed the compo-
sition of their deliveries to include smaller and more
varied processing lines in response to Soviet plans to
expand product assortment.
See section on "Textile Machinery: Intertextilmash" for details on
Prague's capabilities.
9 Once removed from the loom, cloth is run through several
chemical baths. This "finishing" process can be altered to meet
consumer preferences for such features as fabric brightness, soft-
ness, and easier care.
1? The remainder is in the form of industrial sewing equipment,
mainly from Hungary, and leather, footwear, and fur-processing
machinery supplied by Czechoslovakia.
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CEMA Cooperation Agreements:
Pressure for Integration
The Soviet leadership has held up specialization and
cooperation as a major goal in Soviet?East European
relations. In economic terms, Moscow promotes such
ties for the payoff from economies of scale, standard-
ization, and efficient use of each partner's resource,
labor, and capital endowments. Equally important,
this strategy meshes with the USSR's campaign for
Bloc independence from the West.
While CEMA has seen some results from its coopera-
tion initiatives in the consumer sector, the program
has fallen far short of Moscow's expectations.
the level of specialization achieved in this area re-
mains one of the lowest in all industry.
any progress in specialization of
CEMA consumer goods production and trade has
been a natural outgrowth of East European economic
development and owes little to the CEMA cooperation
program.
few of the program's measures have actually been
implemented. Reliance on voluntary participation,
failure to impose penalties for noncompliance, the
absence of an oversight committee to coordinate
efforts, and poor ties between production enterprises
and research institutes have contributed to the pro-
gram's dismal performance. Soviet irritation grew to
such heights in 1980,
that Moscow made unprecedented moves to
disband the program's administrative bodies but in
the end only cut back some staff.
Discussions in CEMA publications indicate that, in
1983, Soviet officials demanded closer East European
adherence to cooperation agreements at the same time
they announced their get-tough policy on trade. Tired
of East European foot-dragging, Moscow ordered its
allies to devote more attention to long-established
specialization assignments in the consumer sector.
Inclusion of measures on CEMA cooperation in the
high-profile Soviet Long-Term Consumer Goods and
Services Program indicates Moscow's pressure is con-
tinuing." This program, approved in September 1985,
Confidential
sets ambitious production targets for a wide range of
consumer durables, soft goods, and consumer services,
with the goal of raising the Soviet citizen's material
standard of living over the next 15 years. It also
promises improvements in the quality, variety, and
style of consumer items. The Soviet document assigns
a key role to Eastern Europe, but gives few specifics.
The Raw Materials Base: Interkhimvolkon. CEMA's
program of cooperation in the consumer sector begins
with textile raw materials. The main goal is develop-
ment of new and stronger chemical fibers?a need
created by higher textile machinery speeds, changes
in fabric-processing methods, and heightened consum-
er demand for easy-care materials.
CEMA established Interkhimvolkon, with headquar-
ters in Bucharest, in 1974 to oversee research in fiber
technology and promote increased production and
trade in synthetic materials.' Each member is as-
signed a work agenda that reflects its industrial and
research capabilities. According to a CEMA publica-
tion, participating countries specialize in the following
areas:
? Hungary?acrylic fibers.
? Poland?polyester fabrics.
? Bulgaria?viscose-base fibers.
? Czechoslovakia?polypropylene materials.
? USSR?blended cotton fibers.
Eastern Europe also is responsible for the creation of
a wide variety of new artificial leathers.
According to discussions in CEMA publications, this
strategy yielded poor returns during the early 1980s.
Eastern Europe shared few of its advances in textile
fiber technology with Interkhimvolkon, and those
discoveries for which the organization was responsible
remained in the laboratory. Moscow met its export
commitments to its CEMA partners?despite a
'Synthetic fabrics comprise less than 5 percent of total Soviet and
East European textile output, and in 1984 Eastern Europe supplied
about 3,000 tons of chemical fibers to support Soviet production.
Moscow, in turn, exported some 408,000 tons of ginned cotton in
1984 to its allies. Cotton fabrics at present account for roughly 70
percent of CEMA output.
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steady decline in its cotton production during 1980-
84?by turning to international cotton markets. A
confidential Soviet study indicates that the East Euro-
pean countries angered Moscow by reexporting the
cotton to the West to earn hard currency. Concomi-
tant shortfalls in chemical fiber deliveries from its
allies added to Moscow's irritation.
Textile Machinery: Intertextilmash. CEMA has de-
voted more attention and resources to light industrial
machine building, the second tier of its cooperation
program. Soviet prodding reflected high-level concern
about insufficient production capacity and technologi-
cal backwardness in Moscow's own stock of plant and
equipment.
CEMA commissioned Intertextilmash in 1973 to co-
ordinate the efforts of CEMA textile machine-build-
ing enterprises, associated scientific research insti-
tutes, and planning and design organizations in the
production of equipment to manufacture wearing
apparel." Its members?who meet regularly in Mos-
cow?include Bulgaria's Association for Heavy Ma-
chinery, Czechoslovakia's Elitex, Poland's Polmatex,
East Germany's Textima, Romania's Imatex, the
Hungarian Association for Production in Light Indus-
try, and Soviet textile machinery enterprises in Kli-
movsk and Cheboksary. Because of a long tradition in
textile engineering, Czechoslovakia and East Germa-
ny shoulder most of Intertextilmash's research pro-
gram (see table 2 for specific projects during the
period 1981-85).
while Inter-
textilmash fell far short of its announced goal of
efficient CEMA production of modern textile equip-
ment, it could claim several technological advances.
however, that progress resulted
not from Intertextilmash's management, but rather
from Czechoslovakia's use of the organization's re-
search centers and production enterprises as testing
grounds to improve its products for hard currency
customers. state-
of-the-art Western processing methods are still based
heavily on Czechoslovak technology of the 1960s and
CEMA has no companion organization coordinating work on
other consumer goods machinery.
11
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Table 2
CEMA: Specialization in
Intertextilmash, 1981-85
Countries
Equipment and Machinery
Czechoslovakia, East
Germany, Hungary, and
Romania
Equipment for ready-to-wear clothing
and shoes
East Germany, Poland, Conventional spinning frames
and Romania
Czechoslovakia Specialized spinning frames
Bulgaria, Poland, and Conventional weaving looms
Romania
Czechoslovakia and East Specialized and shuttleless weaving
Germany looms
USSR
Sulzer-type shuttleless looms a
Czechoslovakia, East Textile dyeing and finishing equipment
Germany, and Romania
Czechoslovakia and East Knitting machines
Germany
a Sulzer-type looms?used extensively in the West during the 1950s
but less frequently today because of relatively slow processing
speeds?weave fabric by "throwing" threads through a series of
metal needles.
1970s. Widely used know-how developed by Czecho-
slovak engineers includes:
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? Open-end spinning. This process eliminates two 25X1
stages of yarn preparation?twisting and winding.
Its advantages are faster processing speeds, savings
of labor and energy, ability to use shorter fibers, and
improvements in weaving and dyeing. These fea-
tures have the potential to relieve critical bottle-
necks in Soviet fabric production.
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? Airjet and waterjet weaving. Pulses of air or water
carry horizontal threads across the loom, which
allows large increases in weaving rates. CEMA
textile enterprises, however, have been slow in ac- 25X1
cepting this machinery because of shortages of
chemical fibers. Natural textile fibers cannot with-
stand the equipment's high speed and extreme
friction.
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Czechoslovakia currently is putting another textile
technology through its paces in Intertextilmash?a
technology that, has the
potential for a major breakthrough in the world
market. Known as multished weaving, this process
makes even greater strides in speed by weaving
several threads at one time. Problems in weaving the
finer threads that Western consumers prefer remain
the only technical stumblingblock.
Prague will be strapped to bring this
equipment into serial production because of insuffi-
cient investment and a deteriorating machine-building
base.
Table 3
USSR-Eastern Europe: The Tasks
of CEMA's Long-Term Target Program
Countries
Assignment
Finished Goods: The Long-Term Target Program.
The third leg of CEMA's specialization program
addresses Moscow's most pressing need?improve-
ment in the quality and variety of consumer goods
supplied. Under Soviet pressure, the CEMA partners
made this the centerpiece of their plans for coopera-
tion in the consumer area during the 1981-85 period.
Moscow hoped that the focus on finished goods would
yield a quick and direct payoff in contrast to the long
gestation periods required by CEMA programs on
textile raw materials and machinery. To stimulate
and guide this effort, CEMA launched in 1979 the
ambitious and detailed Long-Term Target Program
for Industrial Consumer Goods (see table 3)." More
modest programs adopted in the late 1960s and 1970s
fizzled after only a few years.
The Target Program initially singled out five broad
areas for special emphasis: fabrics, clothing and foot-
wear, furniture, electronic consumer products, and
household appliances. To carry out this work plan,
CEMA concluded some 56 bilateral agreements, the
largest number dealing with production of clothing.
Both Soviet and East European representatives, how-
ever, felt the need to narrow their focus, and at the
CEMA Summit in June 1984 they amended the
Alternately referred to as The Long-Term Special Purpose
Program for Industrial Consumer Goods, the Target Program was
accompanied by four similar long-range decrees for CEMA cooper-
ation in transportation, agriculture and the food industry, machine
building, and energy and raw materials. These long-term programs
took the lead from CEMA's 1971 Comprehensive Program, the
organization's much heralded blueprint for Soviet?East European
economic relations
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USSR
Passenger cars, household appliances
(radios, TV sets, refrigerators, washing
machines, clocks, cameras)
Hungary, Poland,
Czechoslovakia, and Ro-
mania
Leather footwear
Bulgaria Perfume, cosmetics
Hungary and Poland Pharmaceuticals
East Germany Textiles
Bulgaria, Romania, and Furniture
Czechoslovakia
Hungary, East Germa- Knitwear
ny, Poland, and Roma-
nia
Czechoslovakia Jewelry
Czechoslovakia and East Dishware, glassware
Germany
Bulgaria Fur coats, leather haberdashery items
East Germany Small household appliances,
lamps/lighting
Czechoslovakia, Roma-
nia, Poland, and
Bulgaria
Clothing, linens
Sources: L. S. Kosikova and S. P. Petukhova, Promyshlenniy
Tovari Narodnogo Potreblenlya (Manufactured Consumer Goods
for National Consumption) (Moscow: Nauka, 1985) and Soviet
press articles.
Target Program to concentrate on specific trouble
spots, including nonwoven fabrics, artificial leather
and fur products, toys, sporting goods, color televi-
sions, refrigerators, and washing machines. The pro-
gram's main goals remained the introduction of new
products and increased quality and consumer appeal
of existing models.
From Moscow's perspective the Target Program foun-
dered badly.
new or specialty products constituted less
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than 5 percent of total Soviet?East European consum-
er goods trade during the early 1980s. Western
observers place the blame for the program's failure on
East European preoccupation with development of
new consumer product lines for Western customers
and poor Soviet enforcement of negotiated agree-
ments.
Prospects: Tough Talk, Modest Pressure
Moscow has kept up its rhetoric about the need for
more East European exports as CEMA enters its new
five-year plan period. Nonetheless, the Soviets have
actually relaxed?at least for the near term?de-
mands on Eastern Europe for rapid increases in
imports of consumer goods.
speedy completion. Textile imports will probably de-
cline in importance as the Soviets introduce newly
acquired fabric-processing equipment into production.
Bilateral trade protocols affirm this slowdown. Con-
sumer deliveries from East Germany?on whom the
Soviets will continue to rely as their major supplier?
are slated to rise 7 percent annually in 1986-90,
slightly less than half the average rate of increase in
East Berlin's exports during 1981-84. Soviet and East
European trade journals, although lean on specifics,
also note less ambitious trade plans for other CEMA
partners. Exceptions are Poland and Romania, who
have agreed to boost deliveries of consumer goods
dramatically over depressed 1981-84 levels to secure
more Soviet imports for their ailing economies
We believe Moscow will continue to buy mostly
clothing, shoes, and medical supplies from Eastern
Europe to cover shortfalls in domestic production.
According to a Western chemical industry journal,
pharmaceutical deliveries from Warsaw could in-
crease as much as threefold by the end of the decade
if the Tarchemin antibiotics plant comes on stream as
expected. A barter arrangement already on the books
calls for much of the factory's output to be shipped to
the USSR, and Moscow may push for the plant's
13
Additional changes in Soviet import strategy bear
Gorbachev's stamp. The Soviet leader has shifted
Moscow's buying focus to machinery and technology,
banking on the long-term payoff in higher Soviet
consumer goods production and decreased reliance on
East European finished items. He appears to have
assigned to his allies a larger role in modernizing
Soviet light industry, calling for the CEMA countries
to:
? Provide engineering and technical advice to redesign
and upgrade Soviet consumer goods factories.
? Accelerate exports of light industrial equipment and
machinery.
? Assist in the construction of three major light
industrial complexes in Yerevan, Zhodino, and Vo-
roshilovgrad (see figure 10 and tables 4 and 5).
Another hallmark of Gorbachev's influence is the
high priority on improvements in the quality and
variety of the allies' consumer exports. To promote
the Soviet leader's aims, recent bilateral and CEMA
agreements urge Eastern Europe to:
? Impose stricter sanctions on suppliers who deliver
poor-quality goods.
? Reduce prices for less desirable products.
? Develop closer trade links to the Soviet retail net-
work.
Gorbachev's pragmatic approach reflects the USSR's
awareness of the limits of East European industrial
capabilities.
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allies' machinery and equipment, however, may make 25X1
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industries. The Kremlin is probably gambling that the
region will be able to cope with this longer term
conflict. On balance, we believe the region can meet
current Soviet trade targets without dramatic strains
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Figure 10
What Moscow Wants To Buy From Eastern Europe
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Table 4
USSR-Eastern Europe: Selected Joint Projects
in the Manufactured Consumer Goods Sector, 1986-90
Participants Project
Location
Terms
Poland, USSR Cosmetics factory
Krakow, Poland
Soviets finance plant's modernization in return
for share of output.
Czechoslovakia, USSR Tannery
Yerevan, USSR
Czechoslovakia builds turnkey facility for Soviets
and receives payment in kind.
Czechoslovakia, USSR Shoe plant
Voroshilovgrad, USSR
Coconstruction of new plant; partners divide re-
sulting output.
Czechoslovakia, USSR Knitting mill
Zhodino, USSR
Czechoslovakia builds turnkey facility for Soviets
and receives payment in kind.
East Germany, USSR
Nine clothing mills,
three shoe factories, and
three furniture plants
Moscow, Leningrad, L'vov,
Tbilisi, and various other lo-
cations in the USSR
Enterprise-to-enterprise links. East German tech-
nicians advise Soviet sister plants on how to
modernize and reequip current facilities.
Hungary, USSR
Sewing factory L'vov, Tshchenets (Georgia),
USSR
Hungarian firms reequip and upgrade technology
in existing Soviet factories in return for sewn
goods.
Hungary, USSR Shoe plant
Moscow
Budapest gives technical assistance in expanding
assortment of shoe output in return for shoes.
Sources: L. S. Kosikova and S. P. Petukhova, Promyshlenniy
Tovari Narodnogo Potrebleniya (Mankfactured Consumer Goods
for National Consumption) (Moscow: Nauka, 1985) and Soviet
open-press articles.
on living standards and economic performance. Ex-
cept for Hungary, which,
is operating at almost full
capacity, the CEMA partners can generate moderate
increases in output through higher utilization rates in
light industry. Difficult economic conditions, however,
may undermine consumer goods production in Poland
and Romania and hold down their export commit-
ments to the USSR. We believe Moscow would
probably turn to East Germany and Czechoslovakia
to make up the difference.
The Soviet leadership is keenly aware that insistence
on a dramatic jump in exports of East European
consumer goods could pose serious problems for its
allies. Attempts to satisfy such demands could force
reductions in living standards in the Bloc. This, in
15
turn, raises the specter of consumer unrest, which
both Soviet and East European leaders appear deter-
mined to avoid. Moscow's actions signal that the
Kremlin has decided for now to continue giving
greater weight to political stability in Eastern Europe
than to improvements in living standards for Soviet
consumers.
Cutbacks in hard currency sales of consumer products
would be the second?and equally unpalatable?
result of even higher Soviet demands. Although the
region largely has recovered from the financial crisis
of the early 1980s, exports to Western markets re-
main a high priority for the long term. Eastern
Europe continues to require hard currency to pay debt
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Table 5
The Soviet Agenda for Light Industrial
Machinery Purchases, 1986-90
Source
Type of Equipment or Technology
Czechoslovakia, Poland Air-jet weaving looms and open-ended
spinning frames
Romania Open-ended spinning machines and
automated spinning/drawing frames
East Germany
Thread-texturizing equipment, cotton
combing machines, and ring-spinning
technology
Bulgaria, Romania Standard knitting machines with
greater speed and capacity
Hungary Industrial ironing machines and laser
cutting and sewing equpiment
East Germany Flat-bed knitting machines and contin-
uous weaving looms
Poland, Romania
East Germany, Poland,
Czechoslovakia
New finishing technology
Open-ended spinning equipment
Bulgaria, Romania Dyeing and laundering machines
Czechoslovakia New knitting technology
Bulgaria Yarn-twisting equipment
Poland
Wool-carding machinery
Poland
Research on ways to use textile-pro-
cessing waste and byproducts
East Germany Hosiery manufacturing equipment
service and to import Western materials and ad-
vanced technology. Soviet pressure to reduce East
European access to the West would almost certainly
backfire, leading to an eventual decline in the quanti-
ty and quality of the consumer goods Moscow wants.
Current trends, however, may eventually compel the
Soviets to raise their requirements for East European
consumer goods above trade protocol targets. A drop
in Soviet hard currency revenues?the product of
falling oil prices and faltering oil production?could
cause Moscow to delay or curtail purchases from
Western suppliers and turn to Eastern Europe to fill
the void. Because planners traditionally have been
reluctant to spend hard currency on consumer goods,
these items may well be cut first. According to
Confidential
Embassy sources, a Soviet foreign trade representa-
tive told a Swedish official in recent meetings that
Soviet imports of such goods from OECD (Organiza-
tion for Economic Cooperation and Development)
countries "would be practically eliminated" because
of revenue shortfalls. In 1984, hard currency suppliers
provided 723 million rubles' worth?some 10 per-
cent?of total Soviet consumer goods purchases.
Trade volumes, however, understate the importance of
such high-quality Western goods to Soviet consumers
who have shown increasingly sophisticated tastes.
Less likely events may also spur increased Soviet
purchases from the CEMA partners, including:
? Production shortfalls in Soviet light industry caused
by investment and resource constraints.
? Stagnating labor productivity and/or failure of
worker incentive programs, which would undercut
Gorbachev's industrial modernization drive.
? Health problems in the population resulting from
the Chernobyl' nuclear accident.
Soviet demands for East European exports above
levels projected in the trade protocols would probably
extend beyond light industry. But increased require-
ments for consumer goods could generate particularly
sharp tensions between Moscow and its allies because
of the possible impact on hard currency trade and
living standards. If Moscow raises the ante, we would
expect to see increased bickering over the volume and
composition of consumer goods trade and some foot-
dragging by the East Europeans in fulfillment of
trade agreements. The loudest complaints probably
would come from Hungary, East Germany, and possi-
bly Czechoslovakia?the regimes with the most con-
sumer-oriented domestic policies and the greatest
reliance on consumer goods for hard currency exports.
In the final analysis, however, the East Europeans
would be forced to comply with most of Moscow's
requirements.
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Appendix A
Statistical Tables of Trade
in Manufactured Consumer Goods
Table A-1
Eastern Europe: Exports of Manufactured
Consumer Goods to the USSR
Million current rubles
Total
Hungary
Romania
Poland
East Germany
Czechoslovakia
Bulgaria
1970
1,364.6
180.1
166.0
282.5
323.3
216.3
196.4
1971
1,608.3
221.6
186.4
347.8
400.8
257.9
193.9
1972
1,724.9
255.6
192.6
384.0
417.3
281.6
193.8
1973
1,693.1
258.5
204.9
382.2
384.4
267.9
195.2
1974
1,741.6
267.5
214.3
431.8
365.2
273.6
189.1
1975
2,166.0
340.9
236.4
557.5
425.1
371.2
234.8
1976
2,294.8
352.6
249.1
595.4
459.8
388.7
249.3
1977
2,564.4
394.3
301.1
687.8
491.6
420.6
269.1
1978
2,837.6
414.7
343.8
809.3
526.0
432.4
311.4
1979
2,958.6
416.0
333.8
858.1
550.1
481.3
319.3
1980
3,184.4
439.5
390.0
866.9
594.3
539.8
353.9
1981
3,449.4
524.4
374.2
759.0
731.8
658.1
402.0
1982
4,086.4
634.8
384.2
896.9
878.5
799.1
492.9
1983
4,131.8
604.2
395.2
773.5
964.4
838.5
556.2
1984
4,663.2
684.2
396.2
894.9
1,026.9
1,031.2
629.7
Because of rounding, components may not add to the totals shown.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
17
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Table A-2
Eastern Europe: Average Annual
Growth in Exports of Manufactured
Consumer Goods to the USSR
Percent Table A-3
Eastern Europe: Shares of Exports of
Manufactured Consumer Goods to the USSR
Percent
1971-75
1976-80
1981-84
1971-84
1971-75
1976-80
1981-84
Total
9.7
8.0
10.0
9.2
Total
100.0
100.0
100.0
Hungary
13.6
5.2
11.7
10.0
Hungary
15.0
14.6
15.0
Romania
7.3
10.5
0.4
6.4
Romania
11.6
11.7
9.5
Poland
14.6
9.2
0.8
8.6
Poland
23.5
27.6
20.4
East Germany
5.6
6.9
14.6
8.6
East Germany
22.3
18.9
22.0
Czechoslovakia
11.4
7.8
17.6
11.8
Czechoslovakia
16.3
16.3
20.4
Bulgaria
3.6
8.6
15.5
8.7
Bulgaria
11.3
10.9
12.7
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
Table A-4
Eastern Europe: Imports of Manufactured
Consumer Goods From the USSR
Million current rubles
Total b
Hungary
Romania
Poland
East Germany
Czechoslovakia
Bulgaria
1970
186.6
31.3
13.1
33.5
38.8
27.5
42.5
1971
306.1
51.6
12.9
39.7
70.3
62.2
69.4
1972
354.9
65.7
15.9
43.6
76.0
67.5
86.1
1973
428.3
73.6
17.3
55.0
94.6
92.9
94.9
1974
544.1
83.8
18.0
95.7
113.3
114.5
118.8
1975
626.8
94.0
15.1
130.6
149.7
112.0
125.4
1976
736.6
109.1
21.5
154.4
175.2
130.3
146.2
1977
793.7
114.6
25.7
174.8
175.1
138.2
165.4
1978
899.2
143.0
37.9
190.5
192.7
155.5
179.6
1979
831.8
146.8
39.8
164.4
144.3
155.0
181.5
1980
886.2
158.4
55.9
190.3
145.8
142.5
193.2
1981
734.3
139.4
44.9
208.4
100.3
98.0
143.4
1982
817.5
156.9
55.9
197.1
117.6
100.9
189.1
1983
837.6
171.9
51.1
216.4
94.6
131.4
172.2
1984 c
944.2
180.3
50.3
258.5
122.1
146.9
186.0
Includes passenger cars, motorcycles, and associated spare parts,
which are not listed in the Soviet classification of manufactured
consumer goods.
b Because of rounding, components may not add to the totals shown.
c Preliminary.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
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Table A-5
Eastern Europe: Average Annual
Growth in Imports of Manufactured
Consumer Goods From the USSR
Percent
Table A-7
USSR-Eastern Europe: Trade in
Manufactured Consumer Goods
in Constant Prices
1971-75
1976-80
1981-84
Eastern Europe
27.4
7.2
1.6
Hungary
24.6
10.8
3.3
Romania
3.0
29.8
-2.6
Poland
31.3
7.8
8.0
East Germany
31.0
-0.5
-4.4
Czechoslovakia
32.5
4.9
0.8
Bulgaria
24.2
9.0
-1.0
a Includes passenger cars, motorcycles, and associated spare parts,
which are not listed in the Soviet classification of manufactured
consumer goods.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
Table A-6
Eastern Europe: Shares of Imports
of Manufactured Consumer Goods
From the USSR
Percent
1971-75
1976-80
1981-84
Total
100.0
100.0
100.0
Hungary
16.3
16.2
19.5
Romania
3.5
4.4
6.1
Poland
16.1
21.1
26.4
East Germany
22.3
20.1
13.0
Czechoslovakia
19.9
17.4
14.3
Bulgaria
21.9
20.9
20.7
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
19
Million 1970 rubles
Soviet
Exports a
Soviet
Imports
Soviet
Net Imports
1970
186.6
1,364.6
1,178.0
1971
301.0
1,643.8
1,342.8
1972
342.7
1,773.7
1,431.0
1973
412.5
1,746.4
1,333.9
1974
512.9
1,757.8
1,244.9
1975
551.4
1,896.4
1,345.0
1976
569.6
2,010.2
1,440.6
1977
586.9
2,231.9
1,645.0
1978
643.6
2,372.4
1,728.8
1979
576.5
2,386.4
1,809.9
1980
567.2
2,397.3
1,830.1
1981
436.3
2,336.3
1,900.0
25X1
1982
477.8
2,692.2
2,214.4
1983
463.2
2,596.5
2,133.3
1984
499.2
2,853.9
2,354.7
a Includes passenger cars, motorcycles, and associated spare parts,
which are not listed in the Soviet classification of manufactured
consumer goods. Estimates were derived from Hungarian foreign
trade price indexes for consumer goods.
b preliminary.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR) and
Kulkereskedelmi Statisztikai Evkonyv (Hungarian Foreign Trade
Statistical Handbook).
Table A-8
Eastern Europe: Exports of
Manufactured Consumer Goods
to the USSR, by Commodity
Percent
(except where noted)
1970 1975
1980 1984
Total (million current 1,364.6 2,166.0 3,184.4 4,663.2
rubles)
Textiles
5.8 7.7
8.1 6.8
Wearing apparel
Household goods
55.1 53.8 50.0 43.8
13.2 14.0
12.3 11.9
Medical goods
16.2 16.6
20.7 27.2
Appliances/other
9.7 7.9
8.9 10.3
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
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Table A-9
Eastern Europe: Exports of Selected Manufactured Consumer
Goods to the USSR, 1983
Million current rubles
Total
Eastern
Europe a
Bulgaria
Hungary
Poland
East
Germany
Romania
Czechoslo-
vakia
Total .
4,131.8
556.2
604.2
773.5
964.4
395.2
838.5
Of which:
Textiles
Cotton
119.0
22.5
21.9
29.1
45.4
Wool
14.7
4.2
1.3
9.3
Silk
44.3
10.4
24.7
9.3
Linen
12.7
2.6
10.1
Clothing
Undergarments b
225.5
23.9
13.5
28.9
92.9
27.3
39.2
Outerwear b
772.6
123.6
127.5
149.9
95.8
142.2
133.7
Shoes
468.6
15.1
102.2
55.7
20.1
66.2
209.2
Stockings
50.7
2.6
2.3
38.6
7.2
Hats
12.9
1.3
5.0
6.7
Jewelry
20.8
20.8
Fur coats
25.6
13.7
0.2
11.7
Leather handbags, belts, gloves,
wallets
179.6
31.5
39.8
19.5
32.9
12.1
44.0
Combs c
1.6
1.6
Housewares
Carpets
124.0
2.7
8.5
70.8
11.5
30.5
Table linens, bedding, towels
9.9
9.9
Blankets
2.0
2.0
Curtains d
29.7
29.7
China/dishware
28.1
21.1
7.0
Glassware
28.5
28.5
Furniture
439.2
45.2
16.9
35.1
135.0
97.4
109.5
Medical goods
Pharmaceuticals
812.5
144.6
229.8
232.9
145.2
4.8
55.4
Toothpaste
67.5
67.5
Cosmetics
84.0
84.0
Soaps/detergents
121.9
35.6
86.4
Appliances/other
Household sewing machines
5.6
5.6
Small appliances (irons, coffee
pots)
4.7
4.7
Baby carriages
12.0
12.0
Lamps/light bulbs
153.5
7.4
66.3
27.0
6.7
46.0
Cooking ranges
21.9
21.9
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Table A-9 (continued)
Total
Eastern
Europe a
Bulgaria
Hungary
Poland
East
Germany
Romania
Czechoslo-
vakia
Paper goods
Books
31.8
3.6
4.0
6.1
8.0
1.8
8.3
Stamps
2.4
0.5
0.4
1.1
0.2
0.3
Stationery and office supplies
22.8
7.2
8.7
7.0
Musical instruments
Pianos
8.7
8.7
Other musical instruments and
records
16.4
0.8
15.6
Recreational items
Sports, hunting, and camping
equipment
21.2
7.4
9.7
4.1
Toys
48.4
1.2
4.5
4.3
38.4
Motion pictures
2.4
0.5
0.3
0.2
0.5
0.3
0.6
a Because of rounding, components may not add to totals shown.
b Estimate. See appendix B on methodology for derivation of
estimates.
c Includes other plastic haberdashery items.
d Represents goods made from tulle, a woven net-like fabric. Tulle
also is used for scarves and other fashion accessories.
Sources: East European and Soviet foreign trade handbooks and
journals.
21
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Table A-10
Eastern Europe's Share of Soviet Imports
of Manufactured Consumer Goods, by Sector
Percent
1971-75
1976-80
1981-84
1971-75
1976-80
1981-84
Total
67.0
65.5
58.0
Medical goods
81.5
78.2
70.3
Textiles
38.4
42.6
37.4
Pharmaceuticals
86.8
85.7
80.6
Cotton
53.3
52.0
38.5
Toothpaste
97.9
94.4
86.4
Wool
53.0
59.2
44.0
Cosmetics
11.1
16.2
23.6
Silk
13.6
24.6
16.3
Washing detergents
15.8
8.1
Linen
86.4
93.6
87.2
Appliances/other
82.8
76.2
70.7
Clothing
65.4
64.6
52.2
Large appliances
71.4
47.4
34.2
Undergarments/outerwear
77.4
73.2
61.2
Household sewing machines
100.0
100.0
99.2
Fur coats
65.0
55.4
35.7
Other small appliances
96.5
89.0
80.0
Knitwear
46.7
56.8
48.9
Baby carriages
89.1
98.2
94.0
Hosiery
92.7
71.0
68.2
Lamps/light bulbs
95.2
93.6
88.9
Hats
53.5
42.6
30.7
Cooking ranges
77.2
75.8
71.0
Haberdashery items
74.9
71.2
71.7
Paper goods
71.3
66.7
66.5
Jewelry
100.0
100.0
100.0
Books
75.6
69.4
69.6
Shoes
56.1
53.1
45.6
Stamps
41.7
47.5
42.7
Housewares
45.8
71.8
71.8
Stationery and
office supplies
88.3
79.4
81.5
Dishes
46.9
74.6
90.5
Glassware
86.3
72.1
59.8
Musical instruments
78.1
70.6
67.8
Table linens, bedding,
towels
9.2
22.6
11.8
Pianos
55.0
59.1
74.1
Recreational items
Carpets
44.9
49.3
56.4
Sports, hunting, and
camping equipment
80.3
71.1
60.1
Furniture
92.9
90.5
85.2
Toys
75.2
53.4
50.8
Motion pictures
43.2
41.0
39.2
Excluding knitted goods.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
Confdential 22
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Table A-11 Percent
Eastern Europe: Imports of (except where noted)
Manufactured Consumer Goods From
the USSR, by Commodity
1970
1975
1980
1984
Total (million current
rubles)
186.6
626.8
886.2
944.2
Textiles
3.7
0.8
0.4
0.3
Medical goods
9.3
6.6
5.6
6.2
Furniture
0.9
LI
0.3
Appliances
41.5
35.1
33.3
43.2
Passenger cars
33.9
38.5
36.3
18.6
Passenger car spare
parts a
2.4
13.6
17.4
24.8
Recreational
goods/other
9.2
4.5
5.9
6.6
a Includes negligible trade in motorcycles and motorcycle spare
parts.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
23 Confidential
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Table A-12
Eastern Europe: Imports of Selected Manufactured
Consumer Goods From the USSR, 1983
Million current rubles
Total
Eastern
Europe a
Bulgaria
Hungary
Poland
East
Germany
Romania
Czechoslo-
vakia
Total a
837.6
172.2
171.9
216.4
94.6
51.1
131.4
Of which:
Textiles
1.2
0.1
1.1
Housewares
Enamelware
2.0
2.0
Furniture
2.5
1.5
1.0
Medical goods
Pharmaceuticals
58.8
11.7
9.9
20.0
5.6
2.9
8.7
Cosmetics
0.2
0.2
Appliances/other
Sewing machines
1.7
1.7
Refrigerators
51.6
1.4
9.1
31.3
1.4
3.6
4.9
Bicycles
23.8
1.8
6.8
6.3
6.5
2.4
Motorbikes
0.4
0.4
Watches
61.9
6.5
6.7
29.8
2.8
9.1
7.0
Cameras
21.0
2.4
0.9
16.5
0.2
0.6
0.4
Televisions
106.7
32.9
6.8
36.2
5.1
25.7
Movie projectors/cameras
4.2
2.4
1.8
Vacuum cleaners
3.6
1.7
1.9
Washing machines
5.6
3.9
1.7
Radios
15.1
1.5
3.5
4.5
1.0
4.6
Light bulbs
0.3
0.3
Paper goods
Books
36.1
7.9
3.2
10.5
8.3
1.5
4.7
Stamps
1.6
0.5
0.3
0.7
0.1
NEGL
0.1
Stationery and office supplies
0.1
0.1
Recreational goods
Sports, hunting, and camping
equipment
8.1
1.6
2.4
4.1
Toys
6.2
1.5
0.5
0.9
3.4
Motion pictures
3.0
0.7
0.3
0.4
0.5
0.3
0.7
Motor vehicles
Motorcycles
1.3
NEGL
1.3
Passenger cars
145.2
36.0
66.0
13.3
12.2
NEGL
17.7
a Because of rounding, components may not add to totals shown.
Sources: East European and Soviet foreign trade handbooks and
journals.
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Table A-13
USSR: Imports of Light Industrial
Equipment From Eastern Europe a
Nominal
(million current
rubles)
Price Index b
(1970=100)
Real
(million 1970
rubles)
1975
168.8
118.6
142.3
1976
198.4
131.9
150.4
1977
256.8
135.5
189.5
1978
316.5
143.6
220.4
1979
361.6
148.5
243.5
1980
387.1
159.9
242.1
1981
441.5
172.9
255.3
1982
559.7
179.7
311.5
1983
715.6
191.6
373.5
1984 ,
734.9
199.6
368.2
Soviet and East European sources only report trade in equipment
used to manufacture wearing apparel and do not provide data on
other consumer goods machinery.
b Hungarian foreign trade price indexes for machinery.
, Preliminary.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR) and
Kulkereskedelni Statisztikai Evkonyv (Hungarian Foreign Trade
Statistical Yearbook).
Reverse Blank
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Table A-14
USSR: Average Annual Imports
of Light Industrial Machinery
and Equipment, by Supplier a
1976-80
1981-84
Million
rubles
Percent
Million
rubles
Percent
Total
414.3
100.0
704.6
100.0
Eastern Europe
304.0
73.4
612.9
87.0
Bulgaria
16.1
3.9
30.1
4.3
Hungary
10.2
2.5
27.2
3.9
East Germany
51.9
12.5
96.3
13.7
Poland
40.2
9.7
52.0
7.4
Romania
6.7
1.0
Czechoslovakia
185.6
44.8
400.6
56.9
, Soviet sources only report trade in equipment used to manufacture
wearing apparel and do not provide data on other consumer goods
machinery.
Source: Vneshnyaya Torgovlya SSSR (Foreign Trade USSR).
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Appendix B
Reconciling Soviet and
East European Trade Data:
A Methodological Note
Official Soviet trade statistics provide a broad and
consistent accounting of trade in manufactured con-
sumer goods with Eastern Europe. Soviet data encom-
pass the whole range of consumer goods commodities,
listing merchandise flows for clothing, shoes, house-
wares, pharmaceuticals, cosmetics, soaps, appliances,
and miscellaneous goods (CEMA Trade Nomencla-
ture code 9) and for cars, motorcycles, and associated
spare parts (code 195). Moreover, consumer goods
trade has not suffered the erosion in reporting evident
in other economic statistics since 1970, and on aver-
age Moscow draws a more comprehensive picture of
imports and exports of such goods than its East
European allies as a group.
Substantial gaps in Soviet statistics, however, limit
their usefulness. The Soviet ledgers omit price data
and a disaggregated breakdown of trade beyond the
three-digit level for many important commodities.
Noticeable in their absence are details on clothing,
pharmaceuticals, and furniture. Reporting is also poor
regarding the volume of consumer goods trade.
We surveyed East European statistical yearbooks,
foreign trade journals, industrial periodicals, and
CEMA publications to determine whether East Euro-
pean sources publish more detailed trade statistics
that could fill in the missing pieces in Soviet account-
ing. With data from these sources, we ran a series of
statistical comparisons from 1970-83 at the two-,
three-, and four-digit level?where possible?to test
for compatability with the Soviet data." Reconcilia-
tion of Soviet and East European data at these levels
was the necessary first step in determining whether
more disaggregated East European data could fit into
Soviet reporting.
For example, Soviet statistics on textile imports were
matched to each East European partner's detailed
accounting of textile exports. Comparisons made for
More current reporting from Eastern Europe on disaggregated
consumer goods trade is not yet available.
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aggregate textile trade and fabric types?such as
cotton, wool, and silk?indicate a high degree of
commonality. Because Soviet reporting ended at this
point, we compiled East European data on finer
commodity categories, such as cotton fabric grades
and types. Corresponding statistics from Hungary?in
this case the only reporter--were set aside, because
they did not meet our threshold of representing 50
percent of total Soviet cotton fabric purchases. Final-
ly, we identified residuals by magnitude and commod-
ity category. The procedure was repeated for all trade
in consumer goods.
Clothing?an area of keen importance to consumers
and the largest category of Soviet consumer goods
imports?was the only category to benefit from this
systematic pairing of data sets. Hungary, with the
most detailed ledgers in the region, publishes Soviet
purchases of men's suits, shirts, and pants; women's
dresses and slips; sportswear; children's clothing;
coats; undershirts; and other clothing. Because we did
not strike such a rich lode in other East European
data, we totaled Hungarian statistics into the coarser
categories of outerwear and underwear. Applying the
resulting ratio to Soviet reporting of clothing imports,
we estimated that Budapest delivered 128 millions of
rubles' worth of outerwear and 14 million rubles'
worth of undergarments in 1983. Czechoslovak and
Bulgarian statistics, although not as complete, did list
exports of various clothing types. Again, compilations
of outerwear and undergarment purchases were made
and the shares converted into millions of rubles. Our
findings indicate Prague's shipments of undergar-
ments-40 million rubles' worth?are nearly three
times those from Budapest. Bulgarian and Czechoslo-
vak exports of outerwear, however, are comparable at
124 million and 134 million rubles' worth. respective-
ly. Normally stingy with its statistics, East nieri-nam
reports the value of outerwear exports to the Soviet
market. Converted to 96 million rubles at the official
rate of exchange, this amount was subtracted from
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Soviet reporting of total clothing purchases. We as-
sumed undergarments accounted for the remaining 93
million rubles. But Poland and Romania were not as
forthcoming, and a CEMA ranking of clothing ex-
porters by commodity type allowed us to estimate
their deliveries of outerwear and undergarments. Ac-
cording to open press reporting, these two countries
are the Soviets' leading suppliers of men's suits and
shirts, women's dresses, and other types of outerwear.
We estimated Soviet outerwear purchases from Ro-
mania to be worth 142 million rubles and from
Poland, 150 million rubles to reflect this hierarchy,
and we assumed undergarments accounted for other
Soviet clothing imports.
We also used Hungarian foreign trade price indexes
to remove the effects of inflation present in Soviet
trade data. These deflators were applied only to
aggregate merchandise flows. To avoid the statistical
bias caused by differences in trade composition, Hun-
garian indexes were not used to convert trade by
country or commodity. Such trade remains in current
rubles.
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