History of The Comecon - Rapid Growth in Comecon Activity

Rapid Growth in Comecon Activity

The years 1956 to 1963 witnessed the rapid growth of Comecon institutions and activities, especially after the 1959 Charter went into effect. Comecon, for example, launched a program to unify the electrical power systems of its member-states and in 1962 created the Central Dispatching Board to manage the unified system. The organization took similar steps to coordinate railroad and river transport. In 1963 a special bank, the International Bank for Economic Cooperation, was created to facilitate financial settlements among members. In this period, Comecon also undertook a number of bilateral and multilateral investment projects. The most notable project led to the coordinated construction of the Druzhba oil pipeline for the transport and distribution of crude oil from the Soviet Union to Eastern Europe. The joint Institute for Nuclear Research, established in 1956, initiated cooperation in another area of long-term importance.

Parallel to these developments, the Soviet Union led efforts to coordinate the investment strategies of the members in the interest of a more rational pattern of regional specialization, increased productivity, and a more rapid overtaking of the capitalist economies. These efforts culminated in 1962 with the adoption at the 15th Council Session of the Basic Principles of the International Socialist Division of Labor. Although the principles of specialization were generally favored by the more industrial, northern-tier states, the less developed East European countries were concerned that such specialization would lead to a concentration of industry in the already established centers and would thus thwart their own ambitious industrialization plans. Moreover the increased economic interdependence that the Basic Principles called for had inevitable political connotations. The latter were reinforced in 1962 by articles and speeches by Soviet party leader Nikita Khrushchev proposing a central Comecon planning organ to implement the Basic Principles and foreseeing the evolution of a "socialist commonwealth" based on a unified regional economy.

These proposals provoked strong and open reaction from Romania on the grounds of "sovereign equality" of members, as articulated most forcefully in the April 1964 Declaration of the Romanian Central Committee. Romania's opposition (combined with the more passive resistance of some other members) succeeded in forestalling supranational planning and reinforcing the interested-party provisions of the Charter. The institutional compromise was the creation of the Bureau for Integrated Planning, which was attached to the Executive Committee and limited to an advisory role on coordination of members' development plans. The Basic Principles, having lost their momentum, were superseded several years later by the Comprehensive Program.