Entanglements and ruptures

Economic relations of the Comecon states with the western world and the Global South


Date: 1 September 2017, 04:00–06:30

Venue: Corvinus University, Fővám tér 8, room 303

 

 

Abstract

In the last decade, the research focusing on Cold War Studies has shifted gradually from East – West conflict to “Global Cold War”. East – South encounters in the twentieth century now attract some attention by historians. While in recent years research on diplomatic relations and cultural exchanges between the Second and the Third World has developed, economic relations remained rather marginal in the debates.

From the 1950s onwards, Comecon countries showed a growing interest in the development of economic relations with the emerging post-colonial states of Asia and Africa, as well as with Latin American states. This interest was caused by (geo-)political and economic interest, but also driven by ideological convictions. Development, rapid modernization, and industrialization (by import substitution) were on the agenda of protagonists of the states in the “Third World”. In general, both sides were interested in economic cooperation although the question remains how beneficial this cooperation was in individual cases. However, a wide range of bilateral and multilateral contracts were negotiated, fulfilled, and broken during the next decades.

The panel will address issues of economic entanglements between Comecon states and their partners in the Third World by analyzing ruptures and continuities. These ruptures can be identified at different levels:

1. Global: Decolonization in the 1960s and the collapse of state socialism in the late 1980s/early 1990s;

2. National: Regime changes in Third World countries as well as consequences of radical ideological and geopolitical shifts

3. World market: Economic crises, changes in terms of trade for raw materials and commodities (oil, gas, cotton, cocoa etc.), in financial markets (interest rate level) etc.

4. Economic policy: Changing concepts and notions of development policy.

The key questions of the panel are:

• How were economic East – South relations negotiated and performed? What role did Comecon or other multinational organizations play?

• Who benefited from East – South economic relations and how? What were the causes for ruptures and to which degree were they radical?

• What was the broader context of ruptures and to which extent did Cold War rivalry influence economic relations between the Second and Third World?

• In which way and to what extent did political or ideological ruptures influence economic relations and vice versa?

• What were the actual consequences of ruptures for the economies on both sides?

By discussing case studies of different regions and decades, this panel seeks to broaden the understanding of economic East – South entanglements.

The four papers use different levels of investigation and perspectives: the impact of the changed global economic conditions in the 1970s on the erosion of the CMEA, the Comecon states and their financial relations with the "global south", an African state (Ghana) and its trade policy, various actors in "solidarity business".

Convenor / Commentator

Uwe Müller (Leibniz Institute for the History and Culture of Eastern Europe (GWZO)

Panelists

Anne-Kristin Hartmetz (Leipzig University)

Max Trecker (Institute of Contemporary History Munich-Berlin)

Berthold Unfried (University of Vienna)

András Pinkasz (Budapest University of Technology and Economics) / Tamás Gerőcs (Hungarian Academy of Sciences)

 

Papers

Anne- Kristin Hartmetz: Cocoa trade: Economic relations between Ghana and Eastern European Comecon countries 1960 – 1974

The paper addresses the issue of economic relations between decolonizing African states and Eastern European Comecon countries and the influence of economic crises and political ruptures on both sides with a focus on the African side. To exemplify this it focusses on relations between Ghana and the Comecon and more specific, on interrelations with development aid and cocoa trade. Since Ghana was the world´s largest cocoa producer at this time Eastern European countries were interested in developing mutual economic relations instead of buying cocoa at the world market. This trade played an important role in the revenue of Ghana. Ghana received equipment and development aid from the East and payed by cocoa. In the mid-sixties Ghana was heavily indebted and did not get any credit from the West due to her socialist orientation. There was a deepening economic crisis caused by a depressed world market price for cocoa. At the same time, there was a domestic crisis culminating in the overthrow of Kwame Nkrumah in 1966. Other political crises followed during the next decade. The paper will examine the influence of these ruptures on economic relations to the Soviet Union and to other Comecon states during the 1960s and 1970s by using sources from the Ghana National Archives and Comecon Economic records. It is argued that while cocoa in general played an important role in the Ghanaian economy this was even more the case in times of political crises and change when Ghana relied on revenue from cocoa trade with Comecon countries.

Max Trecker: Circle of debt: How the crisis of the Global South in the 1980s affected the socialist East

The debt crisis of the Global South in the 1980s, whose start is often associated with the default of Mexico in 1982 had its most direct causes in the combination of steeply rising interest rates in the USA and falling global commodity prices. The results of the following downturn have been especially well researched for Latin America and Africa. The side effects on the CMEA member countries on the other hand have received almost no attention, although they were an important trading partner of many developing countries. The paper focuses on the reaction of the East by looking at internal documents of CMEA meetings, especially the reports by the Committee on Technical Assistance inside CMEA in the mid-1980s. It is argued that the crisis of the South aggravated the already pending crisis of the Eastern economies. The CMEA countries reacted by taking on more risks in doing business with the South and trying to secure the debt repayments by adopting Western financial practices. Lacking the institutional framework the West could rely on such as IMF and World Bank, the results turned out to be modest, though.

Berthold Unfried: Solidarity and the mutual interest: Triangular relations between the GDR, Cuba, and African countries, 1975-1990

This contribution aims at presenting a chapter of a global history of triangular cooperation between the European centre of the Soviet World System and African “countries on a socialist path to development”. The focus is on exchanges and interactions between the German Democratic Republic, Cuba and revolutionary Ethiopia resp. Angola on various levels:

- Trade: examining the practice of the instrument barter trade “to the mutual advantage” genuinely used in the commercial side of these relations

- Uni-vectoral flows of resources as an expression of Solidarity: examining practices of the transfer of (material and personal) resources essentially free of charge, called “solidarity”.

After distinguishing different layers of cooperation, from foreign trade agreements “in the mutual interest” to unilateral “solidarity” transfers in a spirit of “friendship” and picking out the main actors in these fields, this contribution identifies spheres of contact, interaction, and cooperation between GDR and Cuban advisors, experts and solidarity workers as well as with their Ethiopian resp. Angolan counterparts. Flows in the sphere of trade, solidarity and in personal relations between GDR-personnel in Ethiopia and their Ethiopian counterparts are to be discussed from a perspective of reciprocity. This question of flows and contacts shall be examined on the ground of practices retrieved by the analysis of (primarily German and Cuban) archive material and on interviews.

András Pinkasz / Tamás Gerőcs: Comecon countries integration in the world system

Integration efforts in the Comecon are regarded by many economic historians incomplete. Our hypothesis is that the process of integration, including economic policies both at the level of the member states and in the interstate system were influenced by world economic forces from the 1970s. These forces come either in contradiction with the aim of the Comecon integration or in some case the two forces were mutually reinforcing. The spread of this influence was uneven, thus the overall impact on the policies diverged among the member states which finally culminated in the disintegration of the Comecon.


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