Czechoslovakia and comecon

Abstract

The article follows official statements and theoretical discussions in Czechoslovakia in order to explain the role of foreign trade in Czechoslovak economic reforms. After an outline of the historical background, stressing the dependence of Czechoslovak economy and of her industrial structure on external relations, the position of Czechoslovakia is assessed during Khrushchev's attempts to integrate the East European countries. The main attention, however, is paid to the period after December 1966 when top Czechoslovak organs took the decision to start profound economic reforms in the field of foreign trade—as the first East European country and without consulting other COMECON members. The most important instrument, the so-called “inner price adjustment”, has been employed since January 1st, 1967, i.e. one year before Hungary has introduced it, too. It interconnects the domestic wholesale prices with the foreign trade prices in such a way as to make the difference part of the financial results of the enterprises instead of former budgetary financing. Within the framework of other measures this device would make it ultimately possible to reach convertibility of the Czechoslovak crown. During the first half of 1968 theoretical efforts were aimed at foreign trade liberalization and such a policy was partly executed. Finally, two theories of “socialist integration” are sketched which have emerged in Eastern Europe on both official and theoretical levels since august 1968 as a consequence of the above-mentioned Czechoslovak developments.