Comecon

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Image:Comeconposter.JPG
A Soviet poster reading "COMECON: Unity of Goals, Unity of Action"

The Council for Mutual Economic Assistance (COMECON / Comecon / CMEA / CAME), 19491991, was an economic organization of communist states and a kind of Eastern Bloc equivalent to—but more inclusive than—the European Economic Community. The military counterpart to the Comecon was the Warsaw Pact.

Contents

[edit] Names in languages of the member states

  • in AlbanianKëshilli i Ndihmës Ekonomike Reciproke, KNER
  • in BulgarianСъвет за икономическа взаимопомощ, СИВ
  • in CzechRada vzájemné hospodářské pomoci, RVHP
  • in GermanRat für gegenseitige Wirtschaftshilfe, RGW
  • in HungarianKölcsönös Gazdasági Segítség Tanácsa, KGST
  • in PolishRada Wzajemnej Pomocy Gospodarczej, RWPG
  • in RomanianConsiliul de Ajutor Economic Reciproc, CAER
  • in RussianСове́т Экономи́ческой Взаимопо́мощи, СЭВ
  • in SlovakRada vzájomnej hospodárskej pomoci, RVHP
  • in SpanishConsejo de Ayuda Mutua Económica, CAME
  • in VietnameseHội đồng Tương trợ kinh tế, HĐTTKT

[edit] Characteristics

Seat: Moscow

Full Members in the late 1980s: the Soviet Union, Bulgaria, Czechoslovakia, the German Democratic Republic (East Germany), Hungary, Romania, Poland, Cuba, the Mongolian People's Republic (Mongolia), and Vietnam.

Image:Comeconexecutivecommittee.JPG
The COMECON's executive committee in session

Primary documents governing the objectives, organization, and functions:

  • the Charter of the Council for Mutual Economic Assistance (first adopted in 1949 and subsequently amended; all references herein are to the amended 1974 text)
  • the Comprehensive Program for the Further Extension and Improvement of Cooperation and the Further Development of Socialist Economic Integration by the Comecon Member Countries, adopted in 1971 (see Comprehensive Program for Socialist Economic Integration)
  • the Comprehensive Program for Scientific and Technical Progress up to the Year 2000, adopted in December 1985

The Comecon served for four decades as a framework for cooperation among the planned economies of the Soviet Union, its allies in Central and Eastern Europe, and, later, Soviet allies in the Third World. Over the years, the Comecon system grew steadily in scope and experience. The organization later encompassed a complex and sophisticated set of institutions that represented a striking advance over the capabilities of the organization in the early 1960s.

This institutional evolution reflected changing and expanding goals. Initial, modest objectives of "exchanging experience" and providing "technical assistance" and other forms of "mutual aid" were extended to the development of an integrated set of economies based on a coordinated international pattern of production and investment. These ambitious goals were pursued through a broad spectrum of cooperative measures extending from monetary to technological relations.

At the same time, the extraregional goals of the organization expanded; other countries, both geographically distant and systemically different, were being encouraged to participate in Comecon activities. Parallel efforts sought to develop Comecon as a mechanism through which to coordinate the foreign economic policies of the members as well as their actual relations with non-member countries and such organizations as the EEC and the United Nations.

Asymmetries of size and differences in levels of development among Comecon members deeply affected the institutional character and evolution of the organization. The overwhelming dominance of the Soviet economy necessarily meant that the bulk of intra-Comecon relations took the form of bilateral relations between the Soviet Union and the smaller members of Comecon.

These asymmetries served in other ways to impede progress toward multilateral trade and cooperation within the organization. The sensitivities of the smaller states dictated that the sovereign equality of members remained a basic tenet of the organization. Despite Soviet political and economic dominance, sovereign equality constituted a very real obstacle to the acquisition of supranational powers by Comecon organs. Nevertheless, the 1985 Comprehensive Program for Scientific and Technical Progress up to the Year 2000 took steps to instill some organizations with supranational authority.

The planned nature of the members' economies and the lack of effective market-price mechanisms to facilitate integration further hindered progress toward Comecon goals. Without the automatic workings of market forces, progress had to depend upon conscious acts of policy. This tended to politicize the processes of integration to a greater degree than was the case in market economies.

[edit] History

The Comecon was founded in 1949 by the Soviet Union, Bulgaria, Czechoslovakia, Hungary, Poland, and Romania. Joseph Stalin's desire to enforce Soviet domination of the lesser states of Central Europe and to mollify some states that had expressed interest in the Marshall Plan were the primary factors in Comecon's formation.

Until the late 1960s, cooperation was the official term used to describe Comecon activities. In 1971, with the development and adoption of the Comprehensive Program for the Further Extension and Improvement of Cooperation and the Further Development of Socialist Economic Integration by Comecon Member Countries, Comecon activities were officially termed integration (equalization of "differences in relative scarcities of goods and services between states through the deliberate elimination of barriers to trade and other forms of interaction."). Although such equalization had not been a pivotal point in the formation and implementation of Comecon's economic policies, improved economic integration had always been Comecon's goal.

The 1985 Comprehensive Program for Scientific and Technical Progress and the rise to power of Soviet general secretary Mikhail Gorbachev increased Soviet influence in Comecon operations and led to attempts to give Comecon some degree of supranational authority. The Comprehensive Program for Scientific and Technical Progress was designed to improve economic cooperation through the development of a more efficient and interconnected scientific and technical base.

[edit] Membership

Image:CEMA members.png
Map of Comecon member states as of January 1991.
Key:
██ members ██ members who did not participate ██ associates ██ observers
  • January 1949: Bulgaria, Czechoslovakia, Hungary, Poland, Romania, and the Soviet Union
  • February 1949: Albania (Albania, although it had not formally revoked its membership as of mid-1987, stopped participating in Comecon activities in 1961.)
  • 1950: East Germany
  • 1962: Mongolia
  • 1972: Cuba
  • 1978: Vietnam

In the late 1950s, a number of other communist-ruled countries--People's Republic of China, the Democratic People's Republic of Korea (North Korea), Mongolia, Vietnam, and Yugoslavia--were invited to participate as observers in Comecon sessions. Although Mongolia and Vietnam later gained full membership, China stopped attending Comecon sessions after 1961. Yugoslavia negotiated a form of associate status in the organization, specified in its 1964 agreement with Comecon.

In the late 1980s there were ten full members: the Soviet Union, six East European countries, and three extraregional members. Geography, therefore, no longer united Comecon members. Wide variations in economic size and level of economic development also tended to generate divergent interests among the member countries. All these factors combined to give rise to significant differences in the member states' expectations about the benefits to be derived from membership in Comecon. Unity was provided instead by political and ideological factors. All Comecon members were "united by a commonality of fundamental class interests and the ideology of Marxism-Leninism" and had common approaches to economic ownership (state versus private) and management (plan versus market). In 1949 the ruling communist parties of the founding states were also linked internationally through the Cominform, from which Yugoslavia had been expelled the previous year. Although the Cominform was disbanded in 1956, interparty links continued to be strong among Comecon members, and all participated in periodic international conferences of communist parties. Comecon provided a mechanism through which its leading member, the Soviet Union, sought to foster economic links with and among its closest political and military allies. The East European members of Comecon were also militarily allied with the Soviet Union in the Warsaw Pact.

There were 3 kinds of relationships - besides the 10 full memberships – with the Comecon:

  • Yugoslavia was the only country considered to have associate member status. On the basis of the 1964 agreement, Yugoslavia participated in twenty- one of the thirty-two key Comecon institutions as if it were a full member.
  • Finland, Iraq, Mexico, Nicaragua, and Mozambique had a nonsocialist cooperant status with Comecon. Because the governments of these countries were not empowered to conclude agreements in the name of private companies, the governments did not take part in Comecon operations. They were represented in Comecon by commissions made up of members of the government and the business community. The commissions were empowered to sign various "framework" agreements with Comecon's Joint Commission on Cooperation.
  • After 1957 Comecon allowed certain countries with communist or pro-Soviet governments to attend sessions as observers. In November 1986, delegations from Afghanistan, Ethiopia, Laos, Nicaragua, and the People's Democratic Republic of Yemen (South Yemen) attended the 42d Council Session as observers.

[edit] Structure

The Conference, Although not formally part of the organization's hierarchy, the Conference of First Secretaries of Communist and Workers' Parties and of the Heads of Government of the Comecon Member Countries was Comecon's most important organ. These party and government leaders gathered for conference meetings regularly to discuss topics of mutual interest. Because of the rank of conference participants, decisions made here have considerable influence on the actions taken by Comecon and its organs.


The official hierarchy of Comecon consisted of the Session of the Council for Mutual Economic Assistance, the Executive Committee of the Council, the Secretariat of the Council, four council committees, twenty-four standing commissions, six interstate conferences, two scientific institutes, and several associated organizations:


The Session, officially the highest Comecon organ, examined fundamental problems of socialist economic integration and directed the activities of the Secretariat and other subordinate organizations.

Delegations from each Comecon member country attended these meetings. Prime ministers usually headed the delegations, which met during the second quarter of each year in a member country's capital (the location of the meeting was determined by a system of rotation based on the Cyrillic alphabet). All interested parties had to consider recommendations handed down by the Session. A treaty or other kind of legal agreement implemented adopted recommendations. Comecon itself might adopt decisions only on organizational and procedural matters pertaining to itself and its organs.

Each country appointed one permanent representative to maintain relations between members and Comecon between annual meetings. An extraordinary Session, such as the one in December 1985, might be held with the consent of at least one-third of the members. Such meetings usually take place in Moscow.


The highest executive organ in Comecon, the Executive Committee, was entrusted with elaborating policy recommendations and supervising their implementation between sessions. In addition, it supervised work on plan coordination and scientific-technical cooperation. Composed of one representative from each member country, usually a deputy chairman of the Council of Ministers, the Executive Committee met quarterly, usually in Moscow. In 1971 and 1974, the Executive Committee acquired economic departments that ranked above the standing commissions. These economic departments considerably strengthened the authority and importance of the Executive Committee.


There were four council committees: Council Committee for Cooperation in Planning, Council Committee for Scientific and Technical Cooperation, Council Committee for Cooperation in Material and Technical Supply, and Council Committee for Cooperation in Machine Building. Their mission was "to ensure the comprehensive examination and a multilateral settlement of the major problems of cooperation among member countries in the economy, science, and technology." All committees were headquartered in Moscow and usually met there. These committees advised the standing commissions, the Secretariat, the interstate conferences, and the scientific institutes in their areas of specialization. Their jurisdiction was generally wider than that of the standing commissions because they had the right to make policy recommendations to other Comecon organizations.

The Council Committee for Cooperation in Planning was the most important of the four. It coordinated the national economic plans of Comecon members. As such, it ranked in importance only after the Session and the Executive Committee. Made up of the chairmen of Comecon members' national central planning offices, the Council Committee for Cooperation in Planning drew up draft agreements for joint projects, adopted a resolution approving these projects, and recommended approval to the concerned parties. If its decisions were not subject to approval by national governments and parties, this committee would be considered Comecon's supranational planning body.

The international Secretariat, Comecon's only permanent body, was Comecon's primary economic research and administrative organ. The secretary, who has been a Soviet official since Comecon creation, was the official Comecon representative to Comecon member states and to other states and international organizations. Subordinate to the secretary were his deputy and the various departments of the Secretariat, which generally corresponded to the standing commissions. The Secretariat's responsibilities included preparation and organization of Comecon sessions and other meetings conducted under the auspices of Comecon; compilation of digests on Comecon activities; conduct of economic and other research for Comecon members; and preparation of recommendations on various issues concerning Comecon operations.


In 1956 eight standing commissions were set up to help Comecon make recommendations pertaining to specific economic sectors. The commissions have been rearranged and renamed a number of times since the establishment of the first eight. In 1986 there were twenty-four standing commissions . Each commission was headquartered in the capital of a member country and headed by one of that country's leading authorities in the field addressed by the commission. The Secretariat supervised the actual operations of the commissions. The standing commissions had authority only to make recommendations, which had then to be approved by the Executive Committee, presented to the Session, and ratified by the interested member countries. Commissions usually met twice a year in Moscow.


The six interstate conferences (on water management, internal trade, legal matters, inventions and patents, pricing, and labor affairs) served as forums for discussing shared issues and experiences. They were purely consultative and generally acted in an advisory capacity to the Executive Committee or its specialized committees.

The scientific institutes on standardization and on economic problems of the world socialist system concerned themselves with theoretical problems of international cooperation. Both were headquartered in Moscow and were staffed by experts from various member countries.

Several affiliated agencies, having a variety of relationships with Comecon, existed outside the official Comecon hierarchy. They served to develop "direct links between appropriate bodies and organizations of Comecon member countries."

These affiliated agencies were divided into two categories: intergovernmental economic organizations (which worked on a higher level in the member countries and generally dealt with a wider range of managerial and coordinative activities) and international economic organizations (which worked closer to the operational level of research, production, or trade).

A few examples of the former are the International Bank for Economic Cooperation (managed the transferable ruble system), the International Investment Bank (in charge of financing joint projects), and Intermetal (encouraged cooperation in ferrous metallurgy).

International economic organizations generally took the form of either joint enterprises, international economic associations or unions, or international economic partnerships. The latter included Interatominstrument (nuclear machinery producers), Intertekstilmash (textile machinery producers), and Haldex (a Hungarian-Polish joint enterprise for reprocessing coal slag).

[edit] Source

[edit] Nature of Operation

Comecon was an interstate organization through which members attempted to coordinate economic activities of mutual interest and to develop multilateral economic, scientific, and technical cooperation:

  • The Charter stated that "the sovereign equality of all members" was fundamental to the organization and procedures of Comecon.
  • The Comprehensive Program further emphasized that the processes of integration of members' economies were "completely voluntary and do not involve the creation of supranational bodies." Hence under the provisions of the Charter, each country had the right to equal representation and one vote in all organs of Comecon, regardless of the country's economic size or the size of its contribution to Comecon's budget.
  • The "interestedness" provisions of the Charter reinforced the principle of "sovereign equality." Comecon's recommendations and decisions could be adopted only upon agreement among the interested members, and each had the right to declare its "interest" in any matter under consideration.
  • Furthermore, in the words of the Charter, "recommendations and decisions shall not apply to countries that have declared that they have no interest in a particular matter."
  • Although Comecon recognized the principle of unanimity, disinterested parties did not have a veto but rather the right to abstain from participation. A declaration of disinterest could not block a project unless the disinterested party's participation was vital. Otherwise, the Charter implied that the interested parties could proceed without the abstaining member, affirming that a country that had declared a lack of interest "may subsequently adhere to the recommendations and decisions adopted by the remaining members of the Council."

The descriptive term Comecon applied to all multilateral activities involving members of the organization and was not restricted to the direct functions of Comecon and its organs. This usage could be extended as well to bilateral relations among members, because in the system of socialist international economic relations, multilateral accords – typically of a general nature – tended to be implemented through a set of more detailed, bilateral agreements.

[edit] Comecon Versus the European Economic Community

Image:Europe 1988.png
European trade blocs as of late 1980's. EEC member states are marked in blue, EFTA – green, and Comecon – red.

Although Comecon was loosely referred to as the "European Economic Community (EEC) of Eastern Europe," important contrasts existed between the two organizations. Both organizations administered economic integration; however, their economic structure, size, balance, and influence differed:

In the 1980s, the EEC incorporated the 270 million people of Western Europe into economic association through intergovernmental agreements aimed at maximizing profits and economic efficiency on a national and international scale. It was a regionally, not ideologically, integrated organization, whose members had all attained an accomplished level of industrialization and were considered to be roughly equal trading partners. The EEC was a supranational body that could adopt decisions (such as removing tariffs) and enforce them. Activity by members was based on initiative and enterprise from below (on the individual or enterprise level) and was strongly influenced by market forces.

Comecon joined together 450 million people in 10 countries and on 3 continents. The level of industrialization from country to country differed greatly: the organization linked three underdeveloped countries – Cuba, Mongolia, and Vietnam – with some highly industrialized states. Likewise, a large national income difference existed between European and non-European members. The physical size, military power, and political and economic resource base of the Soviet Union made it the dominant member. In trade among Comecon members, the Soviet Union usually provided raw materials, and East European countries provided finished equipment and machinery. The three underdeveloped Comecon members had a special relationship with the other seven. Comecon realizes disproportionately more political than economic gains from its heavy contributions to these three countries' underdeveloped economies. Socialist economic integration or "plan coordination" formed the basis of Comecon's activities. In this system, which mirrored the member countries' planned economies, the decisions handed down from above ignored the influences of market forces or private initiative. Comecon had no supranational authority to make decisions or to implement them. Its recommendations could only be adopted with the full concurrence of interested parties and did not affect those members who declared themselves disinterested parties.

[edit] Prices, Exchange Rates, Coordination of national plans

See: Comprehensive Program for Socialist Economic Integration

[edit] International relations within the Comecon

See: International relations within the Comecon

Soviet domination of Comecon was a function of its economic, political, and military power. The Soviet Union possessed 90 percent of Comecon members' land and energy resources, 70 percent of their population, 65 percent of their national income, and industrial and military capacities second in the world only to those of the United States. The location of many Comecon committee headquarters in Moscow and the large number of Soviet nationals in positions of authority also testified to the power of the Soviet Union within the organization.

Soviet efforts to exercise political power over its Comecon partners, however, were met with determined opposition. The "sovereign equality" of members, as described in the Comecon Charter, assured members that if they did not wish to participate in a Comecon project, they might abstain. East European members frequently invoked this principle in fear that economic interdependence would further reduce political sovereignty. Thus, neither Comecon nor the Soviet Union as a major force within Comecon had supranational authority. Although this fact ensured some degree of freedom from Soviet economic domination of the other members, it also deprived Comecon of necessary power to achieve maximum economic efficiency.

[edit] References

[edit] See also

ca:Consell d'Assistència Econòmica Mútua cs:Rada vzájemné hospodářské pomoci da:COMECON de:Rat für gegenseitige Wirtschaftshilfe es:Consejo de Ayuda Mutua Económica eo:Konsilio de Reciproka Ekonomia Helpo fa:کمه کون fr:Conseil d'assistance économique mutuelle it:COMECON he:קומקון nl:Comecon ja:経済相互援助会議 no:COMECON pl:Rada Wzajemnej Pomocy Gospodarczej pt:Comecon ro:CAER ru:Совет экономической взаимопомощи sk:Rada vzájomnej hospodárskej pomoci fi:SEV sv:Sovjet ekonomitjeskoj vzaimopomosjtj vi:Hội đồng Tương trợ Kinh tế uk:Рада Економічної Взаємодопомоги zh:经济互助委员会

Comecon

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