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265 Document No. 19: Notes of CC CPSU Politburo Session March 10, 1988 This Politburo discussion memorialized by Chernyaev marks a conspicuous change of tone among the Soviet leadership about their socialist allies. No longer are the Eastern European countries seen on the credit side of the ledger and about to reform, but as significant debits, absorbing Soviet raw materials as well as billions of rubles of foreign assistance. During the discussion, Gorbachev points up the failure of the CMEA, the bloc economic organization founded by Stalin in 1949 as an alternative to the Marshall Plan and western European cooperation. He also makes a stark acknowledgement : “In the economic sense, socialism has not passed the test of practice.” A key complicating factor in this period is the falling price of oil, which Ryzhkov notes has plummeted from 180 to 54 rubles per ton. Gorbachev remarks that “we cannot remain a provider of cheap resources for [the allies] forever.” After Yegor Ligachev warns of “political upheavals” in the socialist countries, Gorbachev laments : “If the situation begins to crack, the very idea of socialism will be discredited .” Yet the only strategy the Soviet leader proposes for dealing with the yawning crisis is his already-failing “acceleration” policy of investing in machine-building and technology. About CMEA Gorbachev: [Take for example] the “Ball Bearing” plant. We make a single unit for 60 rubles, while it costs 400 dollars on the world market. But we cannot sell it to our friends for 400 dollars. I went to this plant. You walk through the departments and feel like you are continually stepping from the Stone Age into modernity and back. And people’s moods are different in different departments. In one, young people are eager to work, others are empty. Some departments are pure scrap metal, built in the ‘50s or even ‘30s. We should let the plants earn hard currency. Hungary and Poland have three times as much differentiated trade with the West as we do. We look at them askance when they walk away toward the West, but we cannot replace [Western goods] with anything. In CMEA we almost have no trade, only primitive exchange. Oil is the main item. And our representatives feel no need to trade with them. And they do not feel it either. In the European Union there is a market, but not in CMEA. They [Eastern Europeans] even sell us food for currency now. Our [foreign] assistance alone takes 41 billion rubles annually from our budget . Cuba takes 27 billion. In [our] relations with CMEA, we must take care of our own people first of all. It has become unbearably hard for us to conduct business as we have been doing in previous decades. The comprehensive program is dead. This is a very important issue. Melyakova book.indb 265 2010.04.12. 16:20 266 Those who conclude that the economic situation in the socialist system has a tendency to worsen are right. And that leads to socio-political aggravation. Since we are making this judgment, we have to have a precise analysis of where we stand while conducting a calm discussion. We need to look into everything. For instance, Poland, [First Secretary Edward] gierek. What was it all based on? On credits from the West and on our cheap fuel. The same goes for Hungary. There are specific features in Yugoslavia. But even Yugoslavia is on the brink of collapse. We should draw lessons from all this. What is our approach? Our priority is political stability in the socialist countries . This is our vital interest, from the point of view of security as well. We need the goods from the socialist countries. And we bear our own responsibility for socialism. In the economic sense, socialism has not passed the test of practice. Therefore we should hang on even though the situation is strangling us. This is the first thing we should keep in mind. We cannot isolate ourselves from CMEA. But what is to be done? The main objective in our approach is what we are trying to do today—to step up the application of the STR results, machinebuilding , technological reconstruction. This will liberate [the socialist camp] from the need to purchase technology from the West. Consequently, this will free up hard currency. And it will have great significance from the point of view of quality and increasing prosperity. There is nothing more important than the STR. Through the STR we will get our friends interested...

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