Soviet Exploitation Of Its Satellites

Press, Volume XCIV, Issue 28160, 26 December 1956, Page 9

Soviet Exploitation Of Its Satellites

(By PEYTON GARDNER)

Students of economic affairs all over world outside the Soviet orbit have riewed with interest the dramatic derelopments in Poland and Hungary jr.thin the last few weeks. In both countries, as well as m other satellite ands. the well-springs of economic jjscontent—though furnishing only sue of the many causes for the violent mtbreaks—are fairly similar. The exploitation of the satellite tonomies has had one major objecive, namely, to build up the Soviet car potential through the strengthenng of heavy industry, no matter what acrifices this entails as far as connmer goods industries and agriculnre are concerned. Coupled with the Soviet pattern of nbordinating the requirements of the itellite countries to its own demands nd those of favoured associates, specially Communist China, this policy as kept the satellites in an economic ice. A few examples will suffice to give clear picture of just how this has Iperated to strangle them. Very few' people have heard of a deal involving the purchase and sale of large quanfcties.of Polish coke for use in Hungary, with the Soviet Union in the foie of a dishonest broker. The forced sale price to the Soviet Union was 7.50 dollars a ton. With Poland havng to shoulder the shipping charges io the Soviet border, the delivered ■ost to the Soviet Union actually came p only 13.50 dollars a ton. The Soviet gnion then turned round and disposed of the same coke to Hungary |t 23 dollars a ton. Incidentally, the ioing market price throughout the k-orld for high-grade coke at the time Las 19.50 dollars a ton. Poland and Hungary shared a loss of a cool 1000,000 dollars on this transaction ilone, an amount which poured as an Unearned profit into the coffers of the Soviet Union. “Pattern” of Trade j This type of deal provides the pattern for trade between the Soviet (Union and the countries unfortunate (enough to have come within its orbit. Dt is the outcome of a radical re (orientation of Eastern European commerce imposed by the Soviet Union for its own benefit and to the detriment of the satellite nations. Three-quarters of Hungary’s total foreign trade—as against only 15 per cent before the Second World Warnow is concentrated within the Soviet orbit, and of this, the major part is with the Soviet Union itself. As far back as February, 1952, the Soviet Union sent an economic mission to Hungary to work out a plan whereby Hungarian raw materials and heavy industry could be conscripted to contribute to the Soviet Five-Year Plan. The outcome was a trade agreement signed that same year, giving the Soviet the lion’s share of Hungarian production in several important commodities—aluminium, coal, iron, steel and oil.

Under two subsequent trade agreements. signed in February. 1955, and February. 1956. such significant elements as electric power stations and cranes were added to the list. Moreover. ships, locomotives, food and consumer goods (the latter two items are in short supply • within Hungary itself), are finding their way into the Soviet Union, according to a Soviet handbook published at the end of 1955. The results of this policy have become increasingly evident in the Hungarian economy. Within the last

few weeks. Communist sources in Budapest themselves admitted that agricultural production had hardly risen above that of pre-World War II in spite of the claims originally advanced for the collectivisation programme. This is particularly noteworthy when the rise in population is considered.

There is a scarcity, too, of many basic materials, such as coal, iron ore. Heel and other metals, rubber, cotton, wool and timber. It has also been admitted officially that the supply of electric power is “inadequate.” Lower Living Standard This all adds up to an extremely low nving standard for most Hungarians, whereas before the Second World War the average Hungarian had to spend only 40 per cent, of his income on food, this item now takes two-thirds of what he earns.

..to. hl? . W “s, wages have behl ? d rising living costs by a Wl , de mar B‘ n that his real Were h r e 28 ,P er cent - less than they ZTa re .u ef .°L e the war, when you conmoro in at he has to put in 40 per cent. L working hours to acquire the sa 2? e S° o< i s and services. Even the new Five-year Plan an™2~ nced , year « after heavy popular ?JiUH U t e had ? een brought to bear, tailed to correct to a very large degree the inequities which resulted from previous planning. It called for an increase of 60 per cent, in heavy industry production, but for only a 40 per cent, increase in consumer goods production and 27 per cent, in agricultural output. Meanwhile, integration of the various national economies into an Eastern European economy dominated by the Union, has gone on apace One of the key objectives of this tu2°‘-Kr lnatl S n ’. Harry Schwartz in the New York Times" of June 6,1955, wrote will apparently be to harness the industrial capacity of Eastern Europe to help in the projected industrialisation of Red China. The products of the satellite’s heavy industries are now required to build the factories, plants and installations contemplated m Red China’s industrialisation plans.

_ This statement can be readily verities by simply comparing the list of goods imported by the Soviet Union from the satellite countries, and that of Soviet exports to China. As has been pointed out before, the Soviet Union and Hungary signed a trade agreement as early as February, 1952, which was one year before Hungarian reparations deliveries to Russia were scheduled to end. In addition, Hungary was forced to sign agreements with Communist China on March 30, 1953. April 30, 1954, and April 26. 1955. Under these agreements, Hungary delivered machinerv and electrical equipment in 1953, buses cooling installations, power plants, radio stations. tele-communication equipment, motors, surgical equipment and medicines in 1954, power plants, various kinds of machines, vehicles, telecommunication installations, rolled products, steel products, mineral oil products, and chemical and pharmaceutical products in 1955.

An additional agreement between Hungary and Communist China was signed on January 27, 1956. Under this agreement, shipments of agricultural machines, telecommunication installations, precision instruments, installations for power plants, vehicles, pharmaceutical products, petroleum products, textiles, and other items were called for.

Of the 1900 agricultural machines covered in this arrangement, about 700 have already been delivered, according to “Szabad Nep” for May 4,1956 Since 1953. Hungary has sent millions of units of penicillin to Communist China. By the end of 1956, the total will probably reach 10.000 units, reported “Magyar Nemzet” on May 20. 1956.

On September 6. 1955, Radio Budapest reported that the telecommunication equipment delivered by Hungary last year included three high voltage assemblies for medium power stations.

“Szabad Nep” of January 15, 1956. had an item carrying the information that the building of one radio transmitter station had been completed and that a second one was under construction. Four steam power plants have also been completed, with some heat-power plants still to be built. A Radio Budapest broadcast on November 14, 1955, stated that Hungary had sent to Red China complete radio station as a “gift.” On February 29. 1956, the same station reported the delivery of complete equipment for an oxygen plant, including several air compessors. Pattern in Poland The case of Poland follows a similar pattern. While Poland’s foreign trade in 1955 amounted to some 7.4 billion roubles as against 5 1 illion roubles in 1949, two-thirds of it was with countries of the so-called “peace camp,” according to an interview given by Dr. Stanislaw Gall, chairman of the Polish Chamber of Foreign Trade to the Polish News Agency on June 8, 1956. Of the total foreign trade, one-third—about equal to all of Poland’s pre-war foreign commerce —

was with the Soviet Union alone. Among the commodities of 'Polish origin received in China, the chief item is rolled ferrous metals. In early 1956, a contract was signed at Peking under which Poland undertook to furnish China with technical documentation and complete technical installations for a completely mechanised combine which would consist of a refinery for the processing of sugar-cane which could handle 3000 tons of the raw product daily; also plants for the production of pure alcohol, yeast and dry ice; and it was also agreed that Poland will help in building a port with mechanised wharves to serve this combine. Previously, two other sugar refineries had already been built in China by Poland. Under the same contract, Poland is also producing coalmining installations which consist of coal factories with an annual capacity of 2,000,000 tons, and a coalmine with a daily production capacity of 5000 to 6000 tons. The total value of the Polish sugar refinery and the mining installations for China comes to 200 million roubles. “Trybuna Ludu,” of Warsaw, reported on March 15, 1956. At the same time, Poland has been working on the equipment for a glider factory for Communist China and a group of glider pilots was dispatched from Poland to China to organise the first school for glider pilots in China. Conversely, Chinese technicians are being trained in Poland, according to “Trybuna Ludu” of February 7, 1956. A permanent shipping line was established in 1951 for handling trade between Poland and China. Among the items which find their way over this route are agricultural and electric machines and equipment, deep boring outfits and cooling plants, railroad cars, motorised vehicles and tractors. China owes Poland large sums for shipments and harbour charges, as well as for merchandise transactions. No effort has been made to compensate Poland. Instead, this country has been forced to accept undesired goods arbitrarily valued, on orders from the Soviet Union, as alleged compensation. Heavy Industry Development Moreover, the Polish economy has been greatly damaged by the rapid development of heavy industry, at the expense of light industry, agriculture and much-needed housing, so that only the barest essentials of consumer goods are now within reach of the average family. Other members of that “great and happy family” which makes up the Soviet orbit now find themselves similarly crippled economically, with no possibility of helping themselves or accepting help from outside. This is particularly true of Czechoslovakia, which was forced —like Poland—to reject an invitation to participate in the Marshall Plan, by orders from Moscow on July 9, 1947, five days after the Czech Government had accepted a bid to join the preparatory conference in Paris. This country sends 36 per cent, of its exports to the Soviet Union, which resells to China such Czech products as chemical equipment, diesel engines, power stations, cranes, pumps and compressors. Obviously, the picture portrayed could be extended to include Rumania and other Soviet colonies, with a wide variety of well-documented instances, but it is beleved that enough has been said to prove that all countries which have been so unfortunate as to come under Soviet domination, however flourishing their economies may have been before, now find the needs of their own peoples completely subordinated to the Soviet Union’s plans. That this situation has now reached the proportions of intolerable suffering is amply proven by the recent events in Poland and Hungary.—(U.S. Information Service.)