COMECON's Woes

Europe's Common Market may seem to be traveling to economic integration on a road strewn with rocks, but they are mere pebbles compared with the boulders faced by Moscow in its efforts to forge its satellites into a Communist common market. Shortly after the European Economic Community began operating in 1958, Russia started a hasty conversion of its shaky eight-nation*COMECON (Council for Mutual Economic Assistance) into a Redhued EEC--only COMECON, of course, was to be much better. There would be no wasteful competition among nations, for example, as in the free-market EEC; instead, each member would be assigned to produce what it could make best. But to Soviet chagrin, some of the satellites are proving as balky as De Gaulle about shaping themselves to the mold.

Devious Device. For all its closed-door meetings (no fewer than 61 in the first four months of 1963), COMECON has come to hardly any substantial agreements. Although the COMECON nations and Red China last week agreed on a 40% to 50% cut in air fares within the Red bloc, COMECON has been able to reach agreement on production assignments to members in only a few, uncontroversial cases.

Since the already industrialized nations are getting the choicest assignments, they are naturally offering the least resistance, but Russia is still forced to field complaints and rebellion against COMECON policy from almost every quarter. Czechoslovakia and East Germany are reluctant to set up a common investment fund to help develop industry in member nations because they fear most of the capital will come from them. Poland, unable to get the goods it wants from COMECON neighbors, has signed treaties that will raise trade with the West by as much as 40% while it increases its COMECON purchases only 18%. Such predominantly agrarian countries as Poland, Hungary, Bulgaria and Rumania, which want desperately to build new industries, are beginning to look on COMECON's tendency to expand their mining and agricultural output as a devious device to keep them forever down on the farm and unable to build their own industry.

The bitterest complainer on this score is Rumania, whose industrial output started from a tiny base and is growing faster than any other COMECON nation's (14.7% last year). Rumanian planners aim to keep it rising at a 12%-a-year pace until 1975, but Khrushchev's COMECON plans would condemn Rumania to mostly farming and supplying raw materials to others. Result: Rumania insists on the "right of every nation to develop and plan its economy in accordance with its own national interests." When Russia dallied in delivering a steel mill that the Rumanians had ordered (against COMECON plans), the Rumanians huffed off to buy it from an Anglo-French consortium for $39 million. They have also sent a trade mission to the West to drum up more business with the capitalists.

Who Is Best? The dispute has made a shambles of two COMECON meetings in recent weeks, and may force Moscow to call a summit meeting of party secretaries to resolve it. Even then, COMECON's efforts to assign production will face years of delay. Methods of figuring production costs vary so drastically from member to member that no one is sure who makes which product the best. "We cannot check the calculations of our partner, nor translate our calculations into language which is comprehensible to him," complains a distracted Polish economist. No more direct evidence is needed of COMECON's failure to outdo the free-market system of EEC than one remarkable fact: contrary to all plans, some COMECON members are increasing their trade with EEC countries faster than they are with each other.

*Bulgaria, Czechoslovakia, East Germany,Hungary, Outer Mongolia, Poland, Rumania, U.S.S.R. Albania is now virtually excluded; Red China is only an observer.

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