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Unit 20 : Forms of Economic Cooperation

of Siberia and the Soviet Far East and to modernize Soviet industry and agriculture. The capitalist Notes
countries also stand to gain from such arrangements. Their unused monetary reserves can be put to
profitable use; their credits can be repaid in products they need, such as natural gas, petroleum, and
metals; and they can raise their level of employment.
The Soviet Union has developed such cooperation on both a bilateral and a multilateral basis with
socialist countries wishing to obtain Soviet fuel, mineral, and forest resources, and has attracted
capital investments from these countries. It contributes its own capital to such projects both in other
socialist countries and in developing countries. Industrial complexes have been built on Soviet territory
under bilateral agreements with the FRG, Japan, France, Finland, and the United States.

An important form of international economic cooperation is the collaboration of two or
more countries in building enterprises for extracting and utilizing natural resources.

International economic cooperation in the form of compensation arrangements is becoming
increasingly common. After receiving credit and purchasing the necessary equipment and technology
from another country, the USSR constructs enterprises to produce a commodity, repaying the credit
with the commodity. The Soviet Union also participates in the construction of enterprises in other
countries on the understanding that its credits and technical assistance will be repaid with the goods
produced. It has concluded long-term compensation agreements (five, ten, or more years) for
cooperation in extracting natural resources in countries to which it has extended credit.
Rapid scientific and technological progress, the increased scale of production, and the Soviet Union’s
economic goals require more rapid modernization of many enterprises and even entire industries,
creating many opportunities for the development of scientific and technical cooperation. The Soviet
Union is expanding its scientific and technical ties particularly with the COMECON countries, and it
provides much technical assistance to developing countries. Hundreds of modern enterprises and
other industrial units have been built abroad with the help of Soviet scientific and technological
achievements, and tens of thousands of licenses, designs, and sets of technical data have been
transferred. The sale and purchase of licenses to produce machines, instruments, or equipment or of
licenses to employ technological processes for extracting or processing materials have become
important in the USSR’s economic relations with advanced capitalist countries. Companies in the
United States, the FRG, Japan, France, and other countries are seeking to buy licenses in the USSR,
and the Soviet Union in turn is purchasing an increasing number of licenses from these countries.
This attests to the high level of Soviet technology, which is aiding the advance of technical ideas
throughout the world and which is able to make use of the most recent scientific and technical
developments abroad.
The various forms of international economic cooperation enable the Soviet Union and the other
countries of the socialist community to benefit economically from specialization and cooperation
within the scope of both the socialist and the world-wide division of labor, to bring natural resources
into the economy more rapidly, and to accelerate the economic development of each country. A
significant growth in the production of high-quality export goods allows the socialist countries to
compete successfully on the world market with firms in the capitalist countries, to increase their sales
and the influx of foreign currency, to raise the general quality of goods in the country, to increase
output, and thereby to accomplish more effectively and rapidly their main task—that of raising the
people’s material and cultural living standard.
20.2 Coordination of Macroeconomic Policy and Exchange Rates

It is useful, however, to focus on the more explicit types of macro-economic and exchange rate
coordination and, in this context, to consider two extreme positions. At one extreme is the idea that
each country should manage its own domestic monetary and fiscal policies with a concern for its

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