International Economic Cooperation
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International Economic Cooperation
the objective development of diverse economic, scientific, and technological ties among individual countries and groups of countries and between the socialist and capitalist socioeconomic and political systems, based on the principles of independence, equality, and mutual advantage. Essentially the process represents the intensification of the international division of labor.
The scientific and technological revolution, which has accelerated the international division of labor, and the growing economic strength of the USSR and of the entire world socialist system have increased the importance of international economic cooperation. Only after the appearance of socialism did genuine economic cooperation become possible, based on the principles of sovereignty and equality between states and peoples. The world socialist economic system affects the nature of economic cooperation not only between capitalist and socialist countries but also between the developed capitalist countries and the developing countries. The forms of economic cooperation within the socialist community and those within the capitalist economic system, while superficially similar, reflect the fundamental differences between the two opposing economic and sociopolitical systems.
As a result of the continuing scientific and technological revolution, no single country, not even the most developed, can produce with equal efficiency the entire range of modern products. Therefore individual countries or groups of countries attempt to limit the range of goods they produce and to produce them in huge quantities so as to meet not only their own needs but also the needs of other countries in exchange for the commodities that the other countries produce for export. In this way trade expands and a single world economy develops, each country providing primarily the goods it produces better and more cheaply than others.
International economic cooperation among the capitalist countries developed from simple forms of trade and exchange. At the imperialist stage, there arose a complex and diverse system of international industrial ties between monopolies and monopolistic associations (such as international cartels, syndicates, and concerns), and intergovernmental economic unions were formed. The capitalist division of labor arose and developed, closely linked with the world capitalist market. Within the capitalist system, international economic cooperation is accompanied by fierce competition among monopolies and countries, by the intensification of irreconcilable contradictions, by the growing effect of the law of uneven economic and political development of capitalist countries in the age of imperialism, and by the narrowing of imperialism’s sphere of influence and the growth of the world socialist system.
In the era of the general crisis of capitalism, when the world is divided into two opposing systems—capitalism and socialism, each developing according to its objective economic laws—two different world systems coexist. The period of coexistence constitutes a distinct historical epoch, during which there occurs a transition from capitalism to socialism as more countries break away from the capitalist system and take the socialist path of development.
Peaceful coexistence and economic rivalry between the two world systems does not remove the class contradictions and ideological conflicts between socialism and capitalism, which are irreconcilable, but this does not interfere with the development of international economic cooperation between countries with different social systems. In formulating its policies, the CPSU proceeds from the need to promote extensive, stable, and long-term economic ties between the USSR and other socialist countries and the capitalist countries. Such ties can become a guarantee of firm and lasting peace on earth.
International economic cooperation includes foreign trade, credit relations, cooperation between countries in extracting natural resources, compensation arrangements, and extensive scientific and technical cooperation—for example, trade in licenses to produce certain goods and to use certain technological methods, joint scientific studies, and collaboration on major technical projects, in the construction of plants and other enterprises, in geological exploration, and in training national personnel.
After World War II (1939-45) the foreign trade of the capitalist countries grew approximately 1 V£ times faster than the rate of their industrial growth, attesting to increased specialization and greater division of labor, especially among the advanced capitalist countries. Among the socialist countries of the Council for Mutual Economic Assistance (COMECON), foreign trade has also exceeded the growth of industrial production. In 1971-72 alone, foreign trade grew by 17 percent for the USSR, 23 percent for Bulgaria and Hungary, 26 percent for Rumania, and 33 percent for Poland; the overall growth of industrial production in these countries was 15.4 percent. Trade in machinery rose by 28 percent, and trade in the products of light industry, by 26.5 percent.
In 1972 the USSR traded with 110 countries, and in 1973, Soviet foreign trade totaled 30.3 billion rubles, with COMECON countries accounting for 16.5 billion rubles. Growing socialist integration opens new prospects for economic cooperation between the socialist countries. The USSR has also rapidly developed its trade with the advanced capitalist countries. Between 1947 and 1972 the trade with these countries increased 12 times, reaching 5.9 billion rubles. In 1972 trade with the Federal Republic of Germany (FRG) totaled 827 million rubles; with Japan, 816 million; with Finland, 602 million; and with Great Britain, France, and the United States, more than 500 million each. The enormous growth of Soviet economic and industrial potential, the active role of the USSR in concluding long-term trade agreements with the United States, the FRG, France, Japan, Italy, and other countries, and the relaxation of international tensions thanks to the efforts of the Soviet Union and other countries of the socialist community—all these factors have made for continued rapid growth in trade with the advanced capitalist countries. Soviet trade with the developing countries has also expanded: between 1947 and 1972 it increased 35 times, reaching 3.35 billion rubles.
The expansion of international trade and other economic ties has been stimulated by the development of international credit. The USSR maintains credit agreements with many countries, primarily the socialist and the developing countries. Of the 2,765 plants and other enterprises being built with Soviet technical assistance, 1,898 are in socialist countries and 858 are in developing countries; 1,680 projects had been completed as of Jan. 1, 1973 (1,263 in socialist countries and 412 in developing countries). The Soviet Union offers credits to banks and businesses in the advanced capitalist countries. It is participating in the construction of a major metallurgical complex in France, providing machinery and equipment on credit. The Soviet Union is also seeking extensive long-term credits from the advanced capitalist countries, particularly to draw more rapidly into the economy the natural resources of Siberia and the Soviet Far East and to modernize Soviet industry and agriculture. The capitalist countries also stand to gain from such arrangements. Their unused monetary reserves can be put to profitable use; their credits can be repaid in products they need, such as natural gas, petroleum, and metals; and they can raise their level of employment.
An important form of international economic cooperation is the collaboration of two or more countries in building enterprises for extracting and utilizing natural resources. The Soviet Union has developed such cooperation on both a bilateral and a multilateral basis with socialist countries wishing to obtain Soviet fuel, mineral, and forest resources, and has attracted capital investments from these countries. It contributes its own capital to such projects both in other socialist countries and in developing countries. Industrial complexes have been built on Soviet territory under bilateral agreements with the FRG, Japan, France, Finland, and the United States.
International economic cooperation in the form of compensation arrangements is becoming increasingly common. After receiving credit and purchasing the necessary equipment and technology from another country, the USSR constructs enterprises to produce a commodity, repaying the credit with the commodity. The Soviet Union also participates in the construction of enterprises in other countries on the understanding that its credits and technical assistance will be repaid with the goods produced. It has concluded long-term compensation agreements (five, ten, or more years) for cooperation in extracting natural resources in countries to which it has extended credit.
Rapid scientific and technological progress, the increased scale of production, and the Soviet Union’s economic goals require more rapid modernization of many enterprises and even entire industries, creating many opportunities for the development of scientific and technical cooperation. The Soviet Union is expanding its scientific and technical ties particularly with the COMECON countries, and it provides much technical assistance to developing countries. Hundreds of modern enterprises and other industrial units have been built abroad with the help of Soviet scientific and technological achievements, and tens of thousands of licenses, designs, and sets of technical data have been transferred. The sale and purchase of licenses to produce machines, instruments, or equipment or of licenses to employ technological processes for extracting or processing materials have become important in the USSR’s economic relations with advanced capitalist countries. Companies in the United States, the FRG, Japan, France, and other countries are seeking to buy licenses in the USSR, and the Soviet Union in turn is purchasing an increasing number of licenses from these countries. This attests to the high level of Soviet technology, which is aiding the advance of technical ideas throughout the world and which is able to make use of the most recent scientific and technical developments abroad.
Soviet science occupies first place in many fields, which contributes to the development of cooperation in scientific projects and research (for example, space and oceanographic research and study of the world’s mineral resources) and in work on technical problems in producing equipment and apparatus and in developing advanced technology. The Soviet Union’s leading position in many fields also promotes the exchange of scientific information.
The various forms of international economic cooperation enable the Soviet Union and the other countries of the socialist community to benefit economically from specialization and cooperation within the scope of both the socialist and the world-wide division of labor, to bring natural resources into the economy more rapidly, and to accelerate the economic development of each country. A significant growth in the production of high-quality export goods allows the socialist countries to compete successfully on the world market with firms in the capitalist countries, to increase their sales and the influx of foreign currency, to raise the general quality of goods in the country, to increase output, and thereby to accomplish more effectively and rapidly their main task—that of raising the people’s material and cultural living standard.
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B. S. SURGANOV