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The Council for Mutual Economic Assistance, often abbreviated as Comecon ( ) or CMEA, was an economic organization from 1949 to 1991 under the leadership of the Soviet Union that comprised the countries of the Eastern Bloc along with a number of elsewhere in the world.Michael C. Kaser, Comecon: Integration problems of the planned economies (Oxford University Press, 1967).
The descriptive term was often applied to all multilateral activities involving members of the organization, rather than being restricted to the direct functions of Comecon and its organs.For example, this is the usage in the Library of Congress Country Study that is heavily cited in the present article. This usage was sometimes extended as well to bilateral relations among members because in the system of Communism international economic relations, multilateral accords typically of a general nature tended to be implemented through a set of more detailed, bilateral agreements.
Comecon was the Eastern Bloc's response to the formation in Western Europe of the Marshall Plan and the OEEC, which later became the OECD.
Some say that Stalin's precise motives in establishing Comecon were "inscrutable"Bideleux and Jeffries, 1998, p. 535. They may well have been "more negative than positive", with Stalin "more anxious to keep other powers out of neighbouring … than to integrate them."W. Wallace and R. Clarke, Comecon, Trade, and Western World, London: Pinter (1986), p. 1, quoted by Bideleux and Jeffries, 1998, p. 536. Furthermore, GATT's notion of ostensibly nondiscriminatory treatment of trade partners was thought to be incompatible with notions of socialism solidarity. In any event, proposals for a customs union and economic integration of Central and Eastern Europe date back at least to the Revolutions of 1848 (although many earlier proposals had been intended to stave off the Russian and/or communist "menace") and the state-to-state trading inherent in centrally planned economies required some sort of coordination: otherwise, a monopoly seller would face a monopsony buyer, with no structure to set prices.Bideleux and Jeffries, 1998, pp. 536–37.
Comecon was established at a Moscow economic conference January 5–8, 1949, at which the six founding member countries were represented; its foundation was publicly announced on January 25; Albania joined a month later and East Germany in 1950.
Recent research by the Romanian researcher Elena Dragomir suggests that Romania played a rather important role in the Comecon's creation in 1949. Dragomir argues that Romania was interested in the creation of a "system of cooperation" to improve its trade relations with the other people's democracies, especially with those able to export industrial equipment and machinery to Romania.Elena Dragomir, ‘The formation of the Soviet bloc’s Council for Mutual Economic Assistance: Romania’s involvement’, Journal Cold War Studies, xiv (2012), 34–47.http://www.mitpressjournals.org/doi/abs/10.1162/JCWS_a_00190#.VQKof9KsX65. According to Dragomir, in December 1948, the Romanian leader Gheorghe Gheorghiu-Dej sent a letter to Stalin, proposing the creation of the Comecon.
At first, planning seemed to be moving along rapidly. After pushing aside Nikolai Voznesensky's technocratic, price-based approach (see further discussion below), the direction appeared to be toward a coordination of national economic plans, but with no coercive authority from Comecon itself. All decisions would require unanimous ratification, and even then governments would separately translate these into policy.Bideleux and Jeffries, 1998, pp. 539–41. Then in summer 1950, probably unhappy with the favorable implications for the effective individual and collective sovereignty of the smaller states, Stalin "seems to have taken Comecon's personnel by surprise," bringing operations to a nearly complete halt, as the Soviet Union moved domestically toward autarky and internationally toward an "embassy system of meddling in other countries' affairs directly" rather than by "constitutional means". Comecon's scope was officially limited in November 1950 to "practical questions of facilitating trade."Bideleux and Jeffries, 1998, pp. 541–42.
One important legacy of this brief period of activity was the "Sofia Principle", adopted at the August 1949 Comecon council session in Bulgaria. This radically weakened intellectual property rights, making each country's technologies available to the others for a nominal charge that did little more than cover the cost of documentation. This, naturally, benefited the less industrialized Comecon countries, and especially the technologically lagging Soviet Union, at the expense of East Germany and Czechoslovakia and, to a lesser extent, Hungary and Poland. (This principle would weaken after 1968, as it became clear that it discouraged new researchand as the Soviet Union itself began to have more marketable technologies.)Bideleux and Jeffries, 1998, pp. 542–43.
In a recent paper by Faudot, Nenovsky and Marinova (2022) the functioning and the collapse of the Comecon has been studied. It focuses on the evolution of the monetary mechanisms and some technical problems of multilateral payments and the peculiarities of the transfer ruble. Comecon as an organization proved unable to develop multilateralism mainly because of issues related to domestic planning that encouraged autarky and, at best, bilateral exchanges.
However, once again, trouble arose. The Polish protests and Hungarian uprising led to major social and economic changes, including the 1957 abandonment of the 1956–60 Soviet five-year plan, as the Comecon governments struggled to reestablish their legitimacy and popular support.Bideleux and Jeffries, 1998, pp. 543–34. The next few years saw a series of small steps toward increased trade and economic integration, including the introduction of the "", revised efforts at national specialization, and a 1959 charter modeled after the 1957 Treaty of Rome.Bideleux and Jeffries, 1998, p. 544.
Once again, efforts at transnational central planning failed. In December 1961, a council session approved the Basic Principles of the International Socialist Division of Labour, which talked of closer coordination of plans and of "concentrating production of similar products in one or several socialist countries." In November 1962, Soviet Premier Nikita Khrushchev followed this up with a call for "a common single planning organ."Bideleux and Jeffries, 1998, p. 559. This was resisted by Czechoslovakia, Hungary, and Poland, but most emphatically by increasingly nationalistic Romania, which strongly rejected the notion that they should specialize in agriculture.Bideleux and Jeffries, 1998, p. 560. In Central and Eastern Europe, only Bulgaria happily took on an assigned role (also agricultural, but in Bulgaria's case this had been the country's chosen direction even as an independent country in the 1930s).Bideleux and Jeffries, 1998, p. 553. Essentially, by the time the Soviet Union was calling for tight economic integration, they no longer had the power to impose it. Despite some slow headwayintegration increased in petroleum, electricity, and other technical/scientific sectorsand the 1963 founding of an International Bank for Economic Co-operation, Comecon countries all increased trade with Western World relatively more than with one another.Bideleux and Jeffries, 1998, pp. 560–61.
Also until the late 1960s, the official term for Comecon activities was cooperation. The term integration was always avoided because of its connotations of monopolistic capitalist collusion. After the "special" council session of April 1969 and the development and adoption (in 1971) 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.Bideleux and Jeffries, 1998, pp. 564, 566.
While such integration was to remain a goal, and while Bulgaria became yet more tightly integrated with the Soviet Union, progress in this direction was otherwise continually frustrated by the national central planning prevalent in all Comecon countries, by the increasing diversity of its members (which by this time included Mongolia and would soon include Cuba) and by the "overwhelming asymmetry" and resulting distrust between the many small member states and the Soviet "superstate" which, in 1983, "accounted for 88 percent of Comecon's territory and 60 percent of its population."Bideleux and Jeffries, 1998, p. 564.
In this period, there were some efforts to move away from central planning, by establishing intermediate industrial associations and combines in various countries (which were often empowered to negotiate their own international deals). However, these groupings typically proved "unwieldy, conservative, risk-averse, and bureaucratic," reproducing the problems they had been intended to solve.Bideleux and Jeffries, 1998, pp. 568–69.
One economic success of the 1970s was the development of Soviet oil fields. While doubtless "(Central and) East Europeans resented having to defray some of the costs of developing the economy of their hated overlord and oppressor,"Bideleux and Jeffries, 1998, p. 568. they benefited from low prices for fuel and other mineral products. As a result, Comecon economies generally showed strong growth in the mid-1970s. They were largely unaffected by the 1973 oil crisis. Another short-term economic gain in this period was that détente brought opportunities for investment and technology transfers from Western World. This also led to an importation of Western World cultural attitudes, especially in Central Europe. However, many undertakings based on Western World technology were less than successful (for example, Poland's Ursus Factory tractor factory did not do well with technology licensed from Massey Ferguson); other investment was wasted on luxuries for the party elite, and most Comecon countries ended up indebted to Western World when capital flows died out as détente faded in the late 1970s, and from 1979 to 1983, all of Comecon experienced a recession from which (with the possible exceptions of East Germany and Bulgaria) they never recovered in the Communist era. Romania and Poland experienced major declines in the standard of living.Bideleux and Jeffries, 1998, pp. 571–72.
The program was not a success. "The Gorbachev regime made too many commitments on too many fronts, thereby overstretching and overheating the Soviet economy. Bottlenecks and shortages were not relieved but exacerbated, while the (Central Europe and) members of Comecon resented being asked to contribute scarce capital to projects that were chiefly of interest to the Soviet Union…"Bideleux and Jeffries, 1998, p. 580. Furthermore, the liberalization that by June 25, 1988, allowed Comecon countries to negotiate trade treaties directly with the European Community (the renamed EEC), and the "Sinatra doctrine" under which the Soviet Union allowed that change would be the exclusive affair of each individual country marked the beginning of the end for Comecon. Although the Revolutions of 1989 did not formally end Comecon, and the Soviet government itself lasted until 1991, the March 1990 meeting in Prague was little more than a formality, discussing the coordination of non-existent five-year plans. From January 1, 1991, the countries shifted their dealings with one another to a hard currency market basis. The result was a radical decrease in trade with one another, as "(Central and) Eastern Europe… exchanged asymmetrical trade dependence on the Soviet Union for an equally asymmetrical commercial dependence on the European Community."Bideleux and Jeffries, 1998, pp. 580–82; the quotation is on p. 582.
The final Comecon council session took place on June 28, 1991, in Budapest, and led to an agreement to dissolve in 90 days.Bideleux and Jeffries, 1998, p. 582. The Soviet Union was dissolved on December 26, 1991.
Russia, the successor to the Soviet Union, along with Ukraine and Belarus founded the Commonwealth of Independent States which consists of most of the ex-Soviet republics. The country also leads the Shanghai Cooperation Organisation with Kazakhstan, Kyrgyzstan and Uzbekistan and the Eurasian Economic Union with Armenia, Belarus, Kazakhstan and Kyrgyzstan. Along with Ukraine, Georgia, Azerbaijan and Moldova are also part of the GUAM.
Vietnam and Laos joined the Association of Southeast Asian Nations (ASEAN) in 1995 and 1997 respectively.
| Feb. 1949 | Europe | Tirana | Albanian lek | Albanian | |||||
| People's Republic of Bulgaria (Народна република България) | Jan. 1949 | Europe | Sofia | Bulgarian lev | Bulgarian | ||||
| Republic of Cuba ( República de Cuba) | July 1972 | North America | Havana | Cuban peso | Cuban Spanish | ||||
| Czechoslovak Socialist Republic ( Československá socialistická republika) | Jan. 1949 | Europe | Prague | Koruna | Czech language Slovak language | ||||
| German Democratic Republic ( Deutsche Demokratische Republik) | September 1950 | Europe | East Berlin | Mark | German language | ||||
| Hungarian People's Republic ( Magyar Népköztársaság) | Jan. 1949 | Europe | Budapest | Hungarian forint | Hungarian | ||||
| Mongolian People's Republic (Бүгд Найрамдах Монгол Ард Улс) | June 1962 | Asia | Ulaanbaatar | Tögrög | Mongolian | ||||
| Polish People's Republic ( Polska Rzeczpospolita Ludowa) | Jan. 1949 | Europe | Warsaw | Polish zloty | Polish language | ||||
| Socialist Republic of Romania ( Republica Socialistă România) | Jan. 1949 | Europe | Bucharest | Romanian leu | Romanian | ||||
| Union of Soviet Socialist Republics (Союз Советских Социалистических Республик) | Jan. 1949 | Europe / Asia | Moscow | Soviet rouble | None | ||||
| Socialist Republic of Vietnam ( Cộng hòa xã hội chủ nghĩa Việt Nam) | June 1978 | Asia | Hanoi | Đồng | Vietnamese |
In the late 1980s, there were ten full members: the Soviet Union, six East European countries, and three extra-regional 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 Informbiro 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 three kinds of relationships – besides the 10 full memberships – with the Comecon:
International barter helped preserve the Comecon countries' scarce hard currency reserves. In strict economic terms, barter inevitably harmed countries whose goods would have brought higher prices in the free market or whose imports could have been obtained more cheaply and benefitted those for whom it was the other way around. Still, all of the Comecon countries gained some stability, and the governments gained some legitimacy, and in many ways this stability and protection from the world market was viewed, at least in the early years of Comecon, as an advantage of the system, as was the formation of stronger ties with other socialist countries.Bideleux and Jeffries, 1998, p. 538.
Within Comecon, there were occasional struggles over how this system should work. Early on, Nikolai Voznesensky pushed for a more "law-governed" and technocratic price-based approach. However, with the August 1948 death of Andrei Zhdanov, Voznesensky lost his patron and was soon accused of treason as part of the Leningrad Affair; within two years he was dead in prison. Instead, what won out was a "physical planning" approach that strengthened the role of central governments over technocrats.Bideleux and Jeffries, 1998, p. 539. At the same time, the effort to create a single regime of planning "common economic organization" with the ability to set plans throughout the Comecon region also came to nought. A protocol to create such a system was signed January 18, 1949, but never ratified.Bideleux and Jeffries, 1998, p. 540. While historians are not unanimous on why this was stymied, it clearly threatened the sovereignty not only of the smaller states but even of the Soviet Union itself, since an international body would have had real power; Stalin clearly preferred informal means of intervention in the other Comecon states.Bideleux and Jeffries, 1998, pp. 540–41. This lack of either rationality or international central planning tended to promote autarky in each Comecon country because none fully trusted the others to deliver goods and services.
With few exceptions, foreign trade in the Comecon countries was a state monopoly, and the state agencies and captive trading companies were often corrupt. Even at best, this tended to put several removes between a producer and any foreign customer, limiting the ability to learn to adjust to foreign customers' needs. Furthermore, there was often strong political pressure to keep the best products for domestic use in each country. From the early 1950s to Comecon's demise in the early 1990s, intra-Comecon trade, except for Soviet petroleum, was in steady decline.Bideleux and Jeffries, 1998, p. 565.
As one of the Comecon members deemed underdeveloped, Cuba obtained oil in direct exchange for sugar at a rate highly favorable to Cuba. Within the socialist economic paradigm, the subsidies in favor of Cuba and other underdeveloped Comecon members were viewed as rational and fair because they counteracted unequal exchange.
On the other hand, Czechoslovak trams (Tatra T3) and jet trainers (L-29) were the standard for all Comecon countries, including the USSR, and other countries could develop their own designs but only for their own needs, like Poland (respectively, Konstal trams and TS-11 jets). Poland was a manufacturer of light helicopters for Comecon countries (Mi-2 of the Soviet design). The USSR developed their own model Kamov Ka-26 and Romania produced French helicopters under license for their own market. In a formal or informal way, often the countries were discouraged from developing their own designs that competed with the main Comecon design.
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.
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 took place in Moscow.
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 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 economic system concerned themselves with theoretical problems of international cooperation. Both were headquartered in Moscow and were staffed by experts from various 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 rouble system), the International Investment Bank (in charge of financing joint projects), and Intermetall (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).
Over the years of its functioning, Comecon acted more as an instrument of mutual economic assistance than a means of economic integration, with multilateralism as an unachievable goal.Zwass, 1989, pp. 14–21 J.F. Brown, a British historian of Eastern Europe, cited Vladimir Sobell, a Czech-born economist, for the view that Comecon was an "international protection system" rather than an "international trade system", in contrast with the EEC, which was essentially the latter., pp. 145–56. Whereas the latter was interested in production efficiency and in allocation via market prices, the former was interested in bilateral aid to fulfill central planning goals. Writing in 1988, Brown stated that many people in both the West and the East had assumed that a trade and efficiency approach was what Comecon was meant to pursue, which might make it an international trade system more like the EEC, and that some economists in Hungary and Poland had advocated such an approach in the 1970s and 1980s, but that "it would need a transformation of every Eastern economy along Hungarian lines i.e., to enable a market-guided Comecon to work. And any change along those lines has been ideologically unacceptable up to now."
In the 1980s, the EEC incorporated 270 million people in Europe into economic association through intergovernmental agreements aimed at maximizing profits and economic efficiency on a national and international scale. 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 450 million people in ten countries and on three continents. The level of industrialization from country to country differed greatly: the organization linked two underdeveloped countries – 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 Central and East European countries provided finished equipment and machinery. The three underdeveloped Comecon members had a special relationship with the other seven. Comecon realized disproportionately more political than economic gains from its heavy contributions to these three countries' underdeveloped economies. 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 (from 1967) did not affect those members who declared themselves disinterested parties.
As remarked above, most Comecon foreign trade was a state monopoly, placing several barriers between a producer and a foreign customer. Unlike the EEC, where treaties mostly limited government activity and allowed the market to integrate economies across national lines, Comecon needed to develop agreements that called for positive government action. Furthermore, while private trade slowly limited or erased national rivalries in the EEC, state-to-state trade in Comecon reinforced national rivalries and resentments.Bideleux and Jeffries, 1998, p. 567.
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. Central and 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.
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