How the Other Half Lives

EASTERN EUROPE

While Russia's grain shortage makes the news, it is only the most prominent of a whole basketful of economic problems that plague the Communist bloc. COMECON, the eight-nation group created by the Communists in frank imitation of the Common Market, not only has failed to relieve the economic chaos in Eastern Europe, but in many ways has actually worsened it. So nightmarish is their job that the satellite economists have begun to grumble openly.

A group of leading Czech economists recently blasted nationalization and collectivization, and called for the introduction of a price system based on supply and demand. In Hungary, Trade Expert Imre Vajda last month deplored COMECON's "regrettable sluggishness" and "antiquated concepts," called for more "endeavor to cooperate with capitalist enterprises."

Disillusioned by COMECON's failure, Eastern Europe is indeed turning to the West for more trade and technology. Czechoslovakia last week was in the final stages of negotiating the $31 million purchase of a petrochemical plant and steel-mill equipment from Britain, and Poland was dickering to buy more U.S. wheat. But it will take a good deal more than increased trade with the West to solve Eastern Europe's widespread economic problems. Items:

sb POLAND. Poland is the sick man of Eastern Europe. The country has mammoth debts abroad, and practically no money to pay them with. Overcentralization of planning and overemphasis on heavy industry have reduced its already weak economy to a shambles. Poor harvests and poorer planning have forced it to import huge amounts of grain, thus dangerously depleting its foreign currency reserves. Typical of Poland's plight is the condition of its national airline, LOT, which is being gradually grounded by a bizarre price structure, antiquated equipment, and the failure of Russia to come through with promised modern planes.

sbEAST GERMANY. Bled by massive inefficiency, defections of specialists to the West and a rigid regime that compounds its own mistakes, East Germany now depends on West Germany for much of its manufactured goods. Trade between the two last year reached $500 million. Less known is the fact that, although still small in volume, U.S. exports to East Germany have risen dramatically in the last year, largely through U.S. sales of wheat, tobacco, and other farm goods.

sbCZECHOSLOVAKIA. Though in better shape industrially than most of the Iron Curtain countries, Czechoslovakia has experienced such a rapid decline in the rate of capital investment that the famed Czech automaker Skoda had to reduce its output last year by 15% to 54,000 autos. In a rather pitiful move to entice Western companies to sell their goods in Czechoslovakia, the government recently offered them the opportunity to advertise on TV or in Czech newspapers. There have been no takers.

sbRUMANIA. Rebelling against its COMECON-assigned role as Eastern Europe's vegetable garden and oilfield, Rumania has turned to the West for iron and aluminum plants. A new three-year trade agreement with West Germany provides for an exchange of goods worth $300 million. But Rumania must finance industrialization by exporting food. The unhappy result is a severe food shortage and painfully high prices; eggs go for 20-c- apiece.

sbBULGARIA. It is also trying to finance industrialization through food exports. The new plants come from Russia, but the internal results are similar: food shortages and soaring prices. The average Bulgarian family spends 50% of its income on food.

sbHUNGARY. Gradually recovering from its 1956 beating, Hungary is now hurting from a shortage of young workers and from the world's lowest birth rate. Recent reports from Hungary lead Western experts to believe that the Communist nations can never hope to escape from their agricultural bind. Last year, for example, Hungary produced 10,000 tractors in an all-out attempt to increase farm output. Already this winter, about 5,000 of the new tractors have been ruined because they were left out in the open to face the furious snow and ice.

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