Transitional Economic Systems: The Polish-Czech Example

By Dorothy W. Douglas | Go to book overview

CHAPTER XIV
INTER-STATE ECONOMIC RELATIONS

U nder a planned economy, Poles and Czechoslovaks frequently pointed out, foreign trade must itself be planned. Exports must be secured on a planned basis to cover scheduled imports necessary for the fulfilment of the domestic plan.1 And imports themselves need to be such as can be counted upon, in quantities and in so far as possible in price, for a long enough period ahead to cover not only current production but investment planning. The need had been particularly felt in the most recent period when all the planned economies were trying to industrialize at the same time. In the absence of stable trade conditions the most serious dislocations of domestic plan would be possible.

The desirable form of international trade for a planned economy therefore was held to be one by long or at least middle-term trade agreements specifying the goods to be exchanged over a period of years. And the desirable trade partner -- if only he had the goods -- was one willing and able to make such agreements binding and to carry them through without interruption. Finally, the most desirable form of trade agreement itself would be one that allowed for the varying credit needs of the two sides during the period of the agreement, since investment goods especially are slow in maturing.

All these considerations were cited by Czechs and Poles in discussing their countries' foreign trade policy in the past few years.

It was frequently stated by the Poles and Czechs that capitalist economies are too much at the mercy of business cycles to be ideal trade partners 2 and that their governments held, or at least exer-

____________________
1
Cf. Five-Year Plan Act of Czechoslovakia, 27 October 1948, Art. 26, section I: 'Foreign trade shall be so organized and directed that by means of essential imports the implementation of the targets set by the Five-Year Plan be ensured, and that by means of exports the expenditure incurred through imports be defrayed and the national budget balanced.'
2
Cf. Five-Year Plan Act of Czechoslovakia, Art. 26, section 2: '...by means of long-term economic agreements -- in particular with the countries with planned economies -- the constancy of our economic progress and the resistance of our economy against crises shall be assured.'

-290-

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