PhDr. Ludovít Hallon, CSc. – PhDr. Miroslav Londák, CSc. Historical Institut of Slovak Academy of Sciences Bratislava

Facilities, Forms and Areas of Economic Activities of Firms in Neutral and

Socialist Countries during the Cold War: the Slovak Case

1/ Introduction

Economic cooperation with neutral countries Austria, Switzerland, Finland and Sweden had

an important place in the foreign economic relations of Czechoslovakia after 1945, even

though their political system was different. Slovakia as well had an important role in the

cooperation with neutral countries since the end of 1960s, as a part of after-war

Czechoslovakia. After the constitutional changes in Czechoslovakia in 1969, Slovakia

represented in a considerable extent an independent administrative and economic unit with its

own government and parliament. This fact enables us to evaluate the development of the

relationships of Slovakia with neutral countries distinctively. From the end of 1960s we also

have at disposal statistical information about the foreign trade of Slovakia. Its industrial

potential grew in the years 1945 – 1989 approximately thirty times and the share at industrial

production of Czechoslovakia grew from about 10 % to 29 %. In connection to that the share

in foreign trade grew as well. The number of inhabitants saw a growth in the monitored period

from 3.2 million to 5.2 million, which was about the same as Finland. The economic structure

of Slovakia also had many common signs with the neutral countries.1

2/ Changes of political conditions of economic relations between Slovakia and neutral states in the years 1945 – 1953 In the years 1945 – 1948 Slovakia had favorable conditions for the cooperation with the

countries with free market economy, namely with Austria, Finland, Sweden and Switzerland.

Renewed Czechoslovakia very quickly brought back to life its rich trade relationships with the

1 Dušan Caplovic /Vliam Cicaj/ Dušan Kovác/Lubomír Lipták/Ján Lukacka , Dejiny Slovenska, Bratislava: Academic Elektronic Press 2000, p. 273 – 274.

mentioned countries from before the year 1939 and continued in older trade contracts. The

influence of Soviet Union in the after-war Czechoslovakia was considerable since 1945.

However, it was indirect and in economy it was demonstrated only marginally.

Czechoslovakia became the member of International Monetary Fund and later also of the

General Agreement on Tariffs and Trade (GATT).2 In the previous years during World War II

when Slovakia acted as an independent state with its own Ministry of foreign affairs, it had

developed economic relationships with the then neutral countries Finland, Sweden and

Switzerland and during German Empire also with Austria. After 1945 Slovakia became a part

of the renascent Czechoslovak Republic. The authority in the sphere of foreign trade was

again passed over to the central government in Prague. However, on the basis of contracts

between the Czech and Slovak revolt from the warring years Slovakia kept its own political

authorities of so called departments. Among the departments also featured a separate

Department of Industry and Trade. As a credit to this organ and private foreign trade

associations Slovakia continued quite independent trade relationships with foreign countries.3

The orientation of outer trade relationships of Czechoslovakia started changing in summer

1947. The first milestone in this process was the refusal of so called Marshall’s plan by the

Czechoslovak government being under pressure of J. V. Stalin in July 1947. By this

Czechoslovakia joined the five states of the forming Soviet block. As for other countries the

Marshall’s plan was only refused by Finland. Part of the monopoly was control of the foreign

currency economy which was regulated and limited by contingents.4 At the same time a more

component foreign currency rate was introduced with great differences between the official

and real exchange rate, which made it possible to distort data about the foreign trade

2 Zdenek Orlícek, 30 let ceskoslovenského zahranicního obchodu, in: Zahranicní obchod (1975), Nr. 5, pp. 1 – 2. 3 Miroslav Londák, Otázky industrializácie Slovenska (1945 – 1960), Bratislava: Veda 1999, pp. 44 – 45. 4 Dejiny Slovenska, Vol. 6, Bratislava: Veda 1988, pp. 140 – 145.

especially with the democratic countries until 1988. A turning point in the character of

foreign-trade relationships of Slovakia and the whole of Czechoslovakia was brought by the

totalitarian regime of the communist party in February 1948. By the law No. 119/1948 foreign

trade was claimed state monopoly. The highest authority of the state monopoly in the

monitored economic section became the Ministry of foreign trade.5 The totalitarian regime

assigned so called privileged businesses of foreign trade as the monopoly subjects of foreign

trade exchange. They had a character of investment companies and their number gradually

grew in the nationwide measure to 23 subjects for separate economic sectors. However, their

activity was limited to one year period, namely 1950. The authority of the privileged

businesses for Slovakia were passed to the statewide privileged businesses seated in Prague.

By this the plans for independent development of foreign-trade relationships of Slovakia were

discontinued.6

In the years 1948 – 1950 developed capitalist countries kept their important position in the

foreign trade exchange of Czechoslovakia in spite of the growing share of the Soviet block

countries. Actually, Czechoslovakia continued in the trade contacts on the basis of older

international agreements. The first five year plan of the so called socialistic industrialization

for the years 1949 – 1953 was still drafted on the basis of economic cooperation with the free

market economies of Western Europe. For example the generous plan of development of

metallurgy counted on the import of iron ore from Sweden. In comparison to the years 1947 –

1948 the number of developed capitalist countries fell among the greatest import countries of

Czechoslovakia only from eight to six. Among the first ten greatest importers were Sweden

and Switzerland. In 1948 they had the sixth and eighth position. Among the most important

5 J. Adámek, Deset let monopolu zahranicního obchodu v císlech, in: Zahranicní obchod (1958), Nr. 4, pp. 4 – 5. 6 Privileged businesses for Slovakia were: Metalimex, Ligna, Exico, Chemapol, Koospol, Metrans, Centrotex, Ceskoslovenská celulóza, Kovo, Slovenské magnezitové závody.

Archive of National Bank of Slovakia Bratislava, Slovak Tatra Bank, Account of Slovak Foreign trade mediated by Privileged businesses for Slovakia,Unarranged Fund.

exporting countries of Czechoslovakia was Switzerland in the said year on the fifth position

and Sweden on the sixth position. 7 The trade relationships were still built on the pre-war

bilateral agreements and contracts. Czechoslovakia had a trade and shipping agreement with

Sweden from 18 April 1925. Czechoslovakia signed the trade agreement with Switzerland 16

February 1927. Renewed Austria also joined the most important trade partners of

Czechoslovakia at the end of 1940s. It reached the sixth position in Czechoslovak export in

1948, between Switzerland and Sweden. In the import of Czechoslovakia the importance of

Austria was much smaller due to its contemporary economic situation. In spite of bigger

political changes the mutual trade relationships got a new impulse in Czechoslovakia at the

end of 1948, when on October 29 the monitored countries signed and agreement on exchange

of goods on the basis of contingents till 1956. At the same time a payment agreement with

protocols was signed. The agreements were to be renewed automatically.8 The trade

relationships of Czechoslovakia with Finland underwent a specific development. Till 1948

they had a marginal role in the outer economic relationships of both countries. The refusal of

the Marshall’s plan by Finland, though, was a turning point and it meant a gradual economic

convergence with the Soviet Union, Czechoslovakia and other states of the Soviet Block. This

was demonstrated already in 1949 when the goods exchange between Finland and

Czechoslovakia grew compared to the previous year by about 70 %.9

In the year 1948 - 1949 the share of developed capitalist countries10 in the Czechoslovak

foreign trade exchange dropped from 46 % to 40 % and in absolute figures there was a decline

of roughly 8 %. However, there were no dramatic changes in trading with these countries

7 Dejiny Slovenska, Vol. 6, Bratislava: Veda 1988, pp. 299 – 301; Radovan Šimácek, Ješte zahranicní obchod v roce 1948, in: Zahranicní obchod (1949), Nr. 4, pp. 54 – 55. 8 Czechoslovak foreign trade agreements, in: Zahranicní obchod (1958), Nr. 12, pp. 20 – 25; Václav Tejmar, Rakouské hospodárství a zahranicní obchod, in: Zahranicní obchod (1957). Nr. 11, pp. 484 – 485. 9 Historická statistická rocenka CSSR, Praha 1985, pp. 322 – 323. 10 All European capitalist countries, states of Northern America, Australia and Japan.

neither in 1949.11 It was also evident from the Slovak trade development with the four

monitored countries, that is Switzerland, Sweden, Austria and Finland, which is goldenly

possible to reconstruct for the year 1949 according to the reports of the privileged businesses

of foreign trade. Even though it is just a rough reconstruction, limited to eleven months of the

year 1949, we can imagine the importance of the said countries in foreign trade of Slovakia.

Table Nr. 1 – Structure of foreign trade between Slovakia and four neutral states in the year 1949 in million Czechoslovak crowns

article of goods

AUSTRIA

SWITZERLAND

Export

in %

Import

in %

Export

in %

Import

in %

raw materials

3.3

14.4

13.7

46.5

1.6

51.1

79.1

51.2

wood and cellulose

0.5

2.2

2.4

8.1

1.2

38.3

–

–

semifinished products

4.5

19.6

0.5

1.7

0.01

0.3

3.1

2.0

engineering products

7.8

33.9

10.9

36.9

0.2

6.4

69.7

45.2

consumption products

1.4

6.0

0.8

2.7

0.1

3.3

0.5

0.3

chemical products

4.3

18.7

1.1

3.7

0.02

0.6

1.9

1.2

others products

1,2

5.2

0.1

0.4

–

100

0.1

0.1

total

23.0

100

29.5

100

3.13

154.4

100

balance of trade

- 6.5

- 151.27

article of goods

SWEDEN

FINLAND

Export

in %

Import

in %

Export

in %

Import

in %

raw materials

1.4

40.0

8.4

11.1

–

–

6.0

10.9

wood and cellulose

–

21.4

28.3

0.8

12.3

33.7

61.1

11 Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 321; Radovan Šimácek, Ješte zahranicní obchod v roce 1948, in: Zahranicní obchod (1949), Nr. 4, pp. 54 – 55.

semifinished products

–

1.8

2.4

0.5

7.7

–

engineering products

1.4

40.0

36.4

47.9

1.6

24.6

3.1

5.6

consumption products

–

0.8

1.1

2.3

35.4

–

chemical products

0.7

20.0

7.0

8.9

1.3

20.0

12.4

22.4

others products

–

0.2

0.3

–

–

–

total

3.5

100

76.0

100

6.5

100

55.2

100

balance of trade

-72.5

- 48.7

Notes : a/ The foreign trade in the eleven months of the year 1949 mediated by Privileged businesses for Slovakia b/ Values in afterwar Czechoslovak currency befor currency reform in the year 1953 Source: Archive of National Bank of Slovakia Bratislava, Slovak Tatra Bank, Account of Foreign trade between Slovakia and neutral countries mediated by Privileged businesses for Slovakia in the Year 1949, Unarranged Fund. Their total share in Slovak imports agreed with the conditions of the all-state standards from

the year 1948, which was about 13 %. In the case of Switzerland there was a share of imports

to Slovakia higher 6.4 %, while with Sweden and Austria lower 3 % and 1.2 %. As for

Finland in the year 1949 there was a growth of trade exchange. Imports from Finland to

Slovakia were in percentage and in absolute figures higher than the neighboring Austria. A

different situation was in exports from Slovakia. The share of the four monitored countries in

the exports from Slovakia was only 4.9 %, while the exports of the whole country in

the previous year was more than 13 %. Imports to Slovakia had to be compensated by the

exports from the Czech part of the country. At the same time we need to realize that the role

of Slovakia in the foreign trade of Czechoslovakia was, taking into consideration its economic

potential, very modest. It was just a share of about 7 % to 8 % in the overall state trade

exchange. The growth of the share was accelerated in the 1960s.12 The most important

suppliers from neutral countries were Swiss Brown-Boveri, Swedish firms Defibrator

Stockholm, Arca Regulatorer Stockholm, Rámens Patenter Stockholm, E. Carstents

Specialmaskiner Jonkoping, Austrian enterprisies Siemens-Schuckert, AEG Union

a Siemenswerke, Simonis Co, Wien a Metallfarben A. G., Wien, Eisenwerk Sulzanwerfer,

Wien, O. Rotter, Wien, Burgenland Kreide Werk, Müllendorfer Kreide Fabrik, Wien,

Semperit Gummiwerke, Wien, machinery and components Caliqua Ostexport, J.

Rimmerthaler, Linz, Elln Maschinenfabrik, Wien, Gesellschaft für Hydraulik, Wien,

Optische Werke, Wien, Siemens – Halske, Wien and from Finland for example Tesla, Ag

Helsingfors. In the commodity composition of the imports from the monitored countries to

Slovakia machinery, electrotechnical appliances and some kinds of raw materials and

semifinished products prevailed. Machinery and electrotechnology was delivered mainly from

Switzerland and Sweden, partly from Austria, while Finland only in small. As for raw

materials and semifinished products imported were pyrite and fiberboards, Swiss aluminum

and active soot, from Austria chalk, clingerite and from Finland wood pulp, viscose wood

pulp, fiberboards and round timber. From sophisticated products Slovakia could only offer

electrotechnical, chemical and rubber goods of Bratislava plant Siemens, Cable Factory,

Matador and Dynamit – Nobel, as well as consumable goods, e.g. glass, textile, enamelware,

especially to Austria, less to the other three countries. In a greater measure raw material was

exported especially clingerite to Sweden and Austria, charcoal to Austria, malted barley to

Switzerland, lumber to all four countries.13 Concerning forms of economic cooperation simple

exchange of goods on contract base predominated; it was limited by quantity and kind-of-

12 Archive of National Bank of Slovakia Bratislava, Slovak Tatra Bank, Account of Foreign trade between Slovakia and neutral countries mediated by Privileged businesses for Slovakia in the Year 1949, Unarranged Fund. 13 Ibid.

commodity contingents. Selling and buying licenses was a common form of technological

cooperation already since the end of 19th century. In the post war years, though, the priority of

most European countries was securing the basic needs of the economy and inhabitants.

Technologies offered by Marshall’s plan remained inaccessible for Czechoslovakia.

A change in the foreign trade orientation of Czechoslovakia came in the year 1950, resulting

form the deepening of bipolar division of the world. The USA switched to so called

suppressing communism policy which had an important economical dimension. In the year

1950 a so called Coordinating Committee for Multilateral Export Controls (COCOM) of the

North Atlantic Treaty Organization (NATO) for trade-economic relationships with socialistic

countries was established from the US initiative. Its main task was putting together so called

strategic lists containing about two thousand items of goods subject to embargo for trade with

the Soviet Block states. These items supposedly included 50 % of all kinds of goods on the

world market. Embargo applied also to licenses for important technologies. At the same time

the USA took the most-favored-nation clause from Czechoslovakia. The Soviet Bloc

countries, united in the organization Council for Mutual Economic Assistance since January

1949 (Comecon), gradually created their own inner market, heading towards autarky. Till

1953 the trade between the member countries of Comecon and developed capitalist countries

lowered by about 50 % compared to 1949.14 The situation of Czechoslovakia at the world

markets replicated the international development. The trade exchange with the developed

western countries dropped and in the critical year 1953 reached about 46 % of the level from

1949. The share of these states in the Czechoslovak foreign trade exchange was in 1953 only

roughly 15 %.15 However, trade relationships of Czechoslovakia with Sweden, Switzerland,

Austria and mainly Finland had specific features. In the post-war development of Europe they

14 Milan Blažej, Soudobé tendence vývoje obchodu Východ – Západ, in: Zahranicní obchod (1970), Nr. 11, pp. 8 -9; Dejiny Slovenska, Vol. 6, Bratislava: Veda 1988, pp. 210 – 213. 15 Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 321.

entrenched as neutral states. That is why the attitude of Soviet Bloc states towards these

countries was more helpful than towards the members of NATO of the gradually forming

European Economic Community (EEC). The beginning of cold war most significantly marked

the Czechoslovak economic relationships with Sweden. The value of mutual trade dropped in

the year 1953 to a fragment of the level from the first after-war period. On the other hand

Czechoslovakia managed to sign an agreement with Switzerland on December 22, 1949 on

trade relationships with automatic renewal. However, the decline of the overall trade value

wasn’t stopped neither in the case of Switzerland. In the years 1948 – 1953 the decline was by

about 62 %. The trade between Czechoslovakia and Austria was based on bilateral agreement

about goods exchange from the year 1948. The agreement was gradually prolonged and

contributed to the fact that in the years 1950 – 1951 the exchange of goods remained on the

level from the year 1949. The decline came in the next period of time 1952 – 1954 by

about 48 %.16 The trade relationships with Finland which extended trading with the Soviet

Block in the beginning of 1950s were an exception. In that Czechoslovakia played the key

role. The bilateral exchange of goods leaned on an agreement between Czechoslovakia and

Finland about preliminary adjustment of economic contact from July 6, 1949. At the same

time trilateral agreements among Czechoslovakia, Finland and Soviet Union were signed

yearly about the exchange of goods on the principle of compensation. Czechoslovakia

disbursed the exports to Finland by imports from the Soviet Union and Finland paid this

import by export to the Soviet Union. The trade exchange between Czechoslovakia and

Finland grew in the years 1949 – 1953 by 64 % and compared to the year 1948 by 175 %. A

distinctive form of cooperation was offering Finish marine shipping for the needs of

16 Statistická rocenka CSR (1958), p. 364; Zdenka Nemecková, Obchod Ceskoslovenska se severskými státy, in: Zahranicní obchod (1958), p. 21; Czechoslovak foreign trade agreements, in: Zahranicní obchod (1958), Nr. 12, pp. 20 – 25; Historická statistická rocenka CSSR, Praha 1985, pp. 322 – 323; Václav Tejmar, Rakouské hospodárství a zahranicní obchod, in: Zahranicní obchod (1957). Nr. 11, pp. 484 – 485; J. Adámek, Deset let monopolu zahranicního obchodu v císlech, in: Zahranicní obchod (1958), Nr. 4, pp. 10.

Czechoslovakia.17 The triangle of compensational trade with the involvement of the Soviet

Union and renting shipping were sporadic cases of a specific form of foreign economic

contacts of Czechoslovakia and in that also of Slovakia with countries with free market

economy. The Comecon members had in the beginning of 1950s great difficulty with meeting

the agreed contingents of simple goods exchange with capitalist countries. Higher forms of

cooperation as buying and selling licenses, economic cooperation or even joint

entrepreneurship were in the contemporary circumstance inconceivable.

Graf Nr. 1 - Foreign trade return between Czechoslovakia and Comecon and development capitalist states in million Czechoslovak crowns in the years 1948 – 1954

0

2000

4000

6000

8000

10000

12000

1948 1949 1950 1951 1952 1953 1954

A

B

Note: A = Comecon; B = development capitalist states Source: Historická statistická rocenka CSSR, Praha 1985, p. 320. 3/ Possibilities of economic cooperation between Slovakia and neutral states

in the conditions of socialist Czechoslovakia in the years 1954 – 1970 The year 1953 saw the greatest decline of trade between the so called East and West. After

the death of cold war instigator J. V. Stalin tendencies to renew mutual trading started to

appear. At international organizations meetings, as GATT or United Nations Economic

Commission for Europe (UNECE) sound voices were more often heard for renewal and

enlargement of economic contacts. A certain breaking point in this sphere meant a session of

17 Zdenka Nemecková, Obchod Ceskoslovenska se severskými státy, in: Zahranicní obchod (1958), p. 22; Czechoslovak foreign trade agreements, in: Zahranicní obchod (1958), Nr. 12, pp. 20 – 25.

government experts of capitalist countries and Comecon members at a council (UNECE) in

April 1953 in Geneva. Removing political barriers of trade continued also in the later part of

1950s, even though the so called strategic lists of COCOM were from greater part still valid.18

Czechoslovakia utilized new possibilities of trade development and laid its relationships with

the western European countries on a new or novelized contract basis. In the years 1954 – 1960

the volume of goods exchange of Czechoslovakia with the developed capitalist countries grew

again but slightly. The level from the year 1949 was reached in absolute number in the year

1959. The share of these countries in the overall foreign trade exchange of Czechoslovakia

grew little to 17.5 %. Since mid 1950s the trade cooperation with the four neutral countries

got a new impulse too. A positive phenomenon was normalization of economic relationships

with Sweden on the basis of trade and payment agreement with automatic renewal, signed in

Stockholm on 29 of October 1955. The agreement was supplied with an amendment protocol

on 6 of December 1956. However, increase in import and export was quite small. The

exchange grew three times in 1953 - 1960 but the agreed contingents were not met and the

overall trade volume lagged behind the level from the end of 1940s.19 The dimensions of

bilateral Czechoslovak trade with Finland were determined in the second part of 1950s by an

agreement about goods exchange and payment contract from 14 of February 1955 with

automatic renewal. At the same time till 1957 trilateral compensational trade in cooperation

with the Soviet Union continued. That is why in the years 1953 – 1957 there was another

growth in the volume of mutual trade by 79 %. After the termination of the trilateral

cooperation the exchange decreased and in the year 1960 it was on the same level as trade

exchange with Sweden. Foreign trade with Austria and Switzerland managed to get in the

18 Otakar Taufer, Porady o možnostech rozvoje obchodních styku mezi Východem a Západem, in: Zahranicní obchod (1953), Nr. 5, pp. 220 – 222; Zdenek Orlícek, 30 let ceskoslovenského zahranicního obchodu, in: Zahranicní obchod (1975), Nr. 5, pp. 4 – 5. 19 Zdenka Nemecková, Ibid, pp. 21 – 22; Gustav Svaton, Ceskoslovenský zahranicní obchod se severskými státy, in: Zahranicní obchod (1959), Nr. 7, p.23; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 321.

value indexes to the level of the year 1949 in the second half of 50s. The legislation basis of

trade relationships were continuously older agreements from the years 1948 – 1949.20

The foreign trade exchange and services linked to it from the Czechoslovak side were

performed since 1953 by monopoly businesses of foreign trade, built according to Soviet

example, similarly to other countries of Comecon. The trade contacts of all manufacturers in

Czechoslovakia with foreign countries were carried out through the said businesses.

Gradually 25 foreign trade businesses were formed for individual sectors and services. Later

their number grew. Foreign currency transactions and financial services in contact with

foreign countries were a monopoly of centralized State Czechoslovak Bank and Ministry of

Foreign trade in the first half of 1950s. A certain positive movement came when these

services were taken over by the only renewed commercial bank in Czechoslovakia

Živnostenská banka in Prague which opened its branch in London. Making trade contacts,

negotiations about trade agreements, as well as international economic events and fairs were

mediated by Czechoslovak trade and industrial chamber.21 Exhibitions and expos offered, at

least partially, a field for independent initiative of businesses and contributed to overcoming

of the iron curtain. Czechoslovakia belonged to important exhibitioners in abroad also in the

difficult circumstances of the beginning of 1950s. For instance in 1950 it was the biggest

exhibitioner at a fair St. Eriks Mässon in Sweden and organized an independent exhibition of

industrial products in Zurich. It participated in fairs in Vienna every year and organized

regular trade exhibitions in Prague. In the second half of the 50s the participation at fairs was

even greater. For example in the years 1957 – 1958 Czechoslovakia exhibited at 25 fairs and

exhibitions in developed capitalist countries. Among these events were also fairs in Vienna,

20 Zdenka Nemecková, Ibid, pp. 21 – 22; Gustav Svaton, Ibid, pp. 25 – 27; Historická statistická rocenka CSSR, Praha 1985, pp. 322 – 323; Fakta o zahranicním oobchodu, in Zahranicní obchod (1966). 21 J. Hájek/J. Jelínek, Pobocka Ceskoslovenské obchodní komory v Bratislave, Zahranicní obchod (1967); J. Havlena , Mezinárodní kooperace a banky, Zahranicní obchod (1969), Nr. 3, s. 7 – 9; Ivan Peter, 25 let ceskoslovenského zahranicního obchodu s prumyslove vyspelými státy, Ibid (1973), Nr. 3, pp. 11 – 13.

Stockholm and independent industrial exhibition in Helsinki at an area of 5 600 m2. Since

1959 a famous engineering fair has been taking place in Brno.22 From the higher forms of

economic cooperation the trade with licenses was being renewed in spite of political obstacles

since mid 50s. Till 1960 Czechoslovakia reached modest results in the mentioned area. For

the whole period of the years 1948 – 1960 12 foreign licenses were managed to be bought for

Czechoslovakia.23 We are lacking particulars about the foreign trade of Slovakia in the

monitored time period because it was realized in the all-state trade businesses. Slovakia

focused mainly on heavy armaments industry in cooperation with the Comecon countries. The

trade exchange and in smaller amount also technological cooperation with neutral states could

gradually be visible for instance in machine engineering and mainly in the sector of wood

pulp, paper, timber and furniture industries.

Graf Nr. 2 - Foreign trade return between Czechoslovakia and Comecon and development capitalist states in million Czechoslovak crowns in the years 1955 – 1970

05 000

10 00015 00020 00025 00030 00035 00040 000

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

A

B

22 Riports about participation of Czechoslovakia an the trade exhibitions in Sweden and in Switzerland in the year 1960, Zahranicní obchod (1950), Nr. 33, Nr. 41; Úcast Ceskoslovenské repuliky na veletrzích a samostatných výstavách v zahranicí v roku 1957 a 1958, in: Statistická rocenka CSSR (1959), s. 371; Václav Bok/Hana Huttlová, Ceskoslovensko na zahranicních velektrzích a výstavách, in: Zahranicní obchod (1959), Nr. 2, s. 14 – 15. 23 Stanislav Houžvicka/Ladislav Ríha, K nekterým otázkám smeru a efektivnosti licencní politiky CSSR, in: Zahranicní obchod (1966), Nr. 2, pp. 2 – 3.

Note: A = Comecon; B = development capitalist states Source: Historická statistická rocenka CSSR, Praha 1985, p. 320. Graf Nr. 3 - Foreign trade return between Czechoslovakia and development capitalist states and four neutral states in million Czechoslovak crowns in the years 1955 – 1970

0

2000

4000

6000

8000

10000

12000

14000

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

A

B

Note: A = development capitalist states; B = four neutral states Sources: J. Statistická rocenka CSSR (1958), p. 364; (1965), p. 385; (1967), p. 426; (1971), p. 426; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1966); (1969); (1973); Historická statistická rocenka CSSR, Praha 1985, p. 320. . The positive direction of the economic relationships development among the member states

of Comecon and countries with developed free market economy was endangered at the

beginning of the 60s by a so called Caribbean crises and events in Berlin. In the following

time period of the 60s the process of easing the tension was renewed, to that also contributed

the ongoing negotiations of international economic organizations as was the so called

Kennedy’s round of negotiations of GATT. Czechoslovakia reached important successes in

removing barriers of foreign trade through GATT. From a few Soviet Block states came

braver and braver steps over the iron curtain which were the result of trying to reform the

Stalinist model of economy. In the second half of the 60s Czechoslovakia stood in the front

row of the efforts for reforms.24 The growth of trade volume indicators between the East and

24 Milan Blažej, Soudobé tendence vývoje obchodu Východ – Západ, in: Zahranicní obchod (1970), Nr. 11, pp.6 – 9; Blažena Chytilová/Rudolfína Zemanová, Bruselské kolokvium o vztazích Východ – Západ, in: Zahranicní obchod (1966), Nr. 7, pp. 27 – 28.

the West grew faster at the end of the 60s. At the same time there were quality changes

aiming at sophisticated forms of economic cooperation. Czechoslovakia intensified the trade

exchange with developed democratic countries in the years 1960 – 1970 by 152 %. The share

of these countries in the overall trade exchange return of Czechoslovakia grew to 22.4 %.

From the four neutral states, certain stagnation was noticed only in value indicators of product

exchange with Finland. Austria and Switzerland significantly stepped over the value of

mutual trade with Czechoslovakia from the year 1948 and trading with Sweden got about on

the level of this year. The overall sum of trade return with neutral states grew in the 60s by

169 % and their share relatively grew from 1960 from 4.1 % to 5.19 %.25

Table Nr. 2 - The share of neutral states in the foreign trade return of Czechoslovakia in the years 1948 - 1970 YEAR

AUSTRIA

SWITZERLAND

SWEDEN

FINLAND

TOTAL

1948 4.37 4.98 4.85 0,51 14,10 1950 3.85 4.17 3.50 0.63 12.15 1953 1.60 1.45 0.39 1.08 4.52 1955 1.59 1.76 0.53 1.18 5.33 1957 1.66 1.68 0.70 1.33 5.37 1960 1.70 1.40 0.50 0.50 4.10 1963 1.21 1.09 0.62 0.37 3.29 1965 1.69 1.34 0.69 0.33 4.05 1968 2.03 2.21 0.66 0.27 5.17 1970 2.17 1.88 0.83 0.31 5.19 Sources: J. Adámek, Deset let monopolu zahranicního obchodu v císlech, in: Zahranicní obchod (1958), Nr. 4, pp. 10; Statistická rocenka CSSR (1958), p. 364; (1965), p. 385; (1967), p. 426; (1971), p. 426; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1966); (1969); (1973). Table Nr. 3 - Structure of foreign trade between Czechoslovakia and four neutral states in the year 1967 in million Czechoslovak crowns aticle of goods

AUSTRIA

SWITZERLAND

in in in in 25 Statistická rocenka CSSR (1965), p. 385; (1967), p. 426; (1971), p. 426; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1966); (1969); (1973).

Export % Import % Export % Import % raw materials semi - products

170.9

51.3

22.7

5.9

112.0

31.6

51.3

12.2

chemical products

20.7

6.2

77.7

20.4

26.1

7.4

120.8

28.8

engineering products

32.3

9.7

135.4

35.6

10.3

2.9

74.6

17.8

others industri- al products

44.6

13.4

107.0

28.0

93.2

26.3

67.8

16.1

different fini- shed products

11.5

3.4

30.2

7.9

33.7

9.5

15.2

3.6

foodstuffs

46.7

14.1

4.8

1.3

77.2

21.7

89.4

21.4

others products

6.3

1.9

3.3

0.9

2.0

0.6

0.5

0.1

total

333.0

100

381.1

100

354.5

100

419.6

100

balance of trade

- 48,1

- 65.1

article of goods

SWEDEN

FINLAND

Export

in %

Import

in %

Export

in %

Import

in %

raw materials semi - products

13.1

9.5

54.5

33.5

16.5

20.3

35.1

58,7

chemical products

16.6

12.1

4.6

2.8

8.0

10.3

6.4

10.7

engineering products

14.3

10.4

79.6

49.0

14.1

17.9

2.2

3.7

others industri- al products

42.2

30.7

15.9

9.8

28.1

35.7

14.2

23.8

different fini- shed products

39.0

28.4

3.4

2.1

9.3

11.9

0.9

1.5

foodstuffs

12.1

8.8

3.4

2.1

2.8

3.7

0.8

1.3

others products

0.2

0.1

1.2

0.7

0.1

0.2

0.2

0.3

total

137.5

100

162.6

100

78.9

100

59.8

100

balance of trade

- 25.1

+ 19.1

Source: Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1968). Graf Nr. 4 – Foreign trade between Czechoslovakia and four neutral states in the years 1955 – 1970 in million Czechoslovak crowns a/ Export

0

100

200

300

400

500

60019

55

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

A

CH

SSF

b/ Import

0100200300400500600700800900

1955

1956

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

A

CH

SSF

Note: Switzerland with Lichtenstein - Switzerland in the years 1959, 1969 estimated; Sweden in the year 1956 estimated Sources: J. Statistická rocenka CSSR (1958), p. 364; (1965), p. 385; (1967), p. 426; (1971), p. 426; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1966); (1969); (1973).

In the period of reforms in the 1960s circumstances started to be formed in Czechoslovakia

for extending the participation of Slovakia in foreign economic relationships. The individual

all-state foreign trade businesses gradually opened their branches in Slovakia. Since the end

of the 60s new foreign trade businesses and institutions were established with their

headquarters in Slovakia. These mostly had the form of stock companies. Their number grew

together with the branches of all state businesses to about 25.26 In the year 1967 the

Czechoslovak Trade and Industrial Chamber established its subsidiary in Bratislava. Some

power in the contacts with foreign countries gained also general head offices of the state

company trusts of individual sectors in this period. In Slovak economy there were about 55

general head offices. In the 60s the monopoly of Živnobanka in foreign currency trade

operations with foreign clients was disturbed. In 1965 Ceskoslovenská obchodná banka

(Czechoslovak Trade Bank) was established (CSOB), which focused on specific bank

services in the foreign trade area. CSOB in 1967 opened in Slovakia its subsidiary in

Bratislava and in town Žilina.27 Except for simple product exchange Slovak companies also

had, in this time, the possibility to enter into higher forms of economic cooperation. These

forms of cooperation, though, developed in a greater measure only after 1975. Since mid 60s

some facts about Slovak foreign trade started to be monitored. The first approximate

information showed that the small share of Slovakia in the return of foreign trade exchange of

Czechoslovakia grew distinctly, namely from 12.8 % to 19.4 % in the years 1967 - 1969 and

that developed countries with free market economy played in Slovak economy a relatively

more important role than in the all-state measure. Their share in imports of Slovakia in 1969

was 34.7 % and on exports 35.1 %. The biggest partners of Slovakia in Eastern Europe were

West Germany, Austria and England.28

A new dimension of economic relationships between the Comecon states and developed

countries with free market economy which joined together in OECD, after 1960 was a growth

of license trade and mainly the switch to specialization and cooperation on the sector and

factory level. Czechoslovak government measures from the year 1963 made possible not only

26 For example: Incheba, Slovart, Drevounia, Drevoindustria, Intercoop, Chirana, Chemapol, Omnia, Interal, Technoexport, Kerametal, Martinex, Koospol, Imex, Polytechna, Transakta, Strojexport, Rempo, Cechofracht. 27 Pavel Briatka, Slovensko a zahranicný obchod CSSR, in: Zahranicní obchod (1970), pp. 15 – 18; J. Hájek/J. Jelínek, Pobocka Ceskoslovenské obchodní komory v Bratislave, Zahranicní obchod (1967). 28 Ibid.

buying but also selling licenses in abroad. Till the year 1970 Czechoslovakia bought 197 so

called passive and sold 186 so called active licenses. The share of Slovakia reached 48

passive and by then only 17 active licenses.29 Transfer of technologies was mediated by the

foreign trade business Polytechna. One of the most important passive licenses of the 1960s

was the technology of oxygen converters bought from an Austrian company VOEST Linz for

greatest metallurgical combine in Czechoslovakia Eastern Slovak Ironworks near Košice.

Thanks to the mentioned technology the company became also the most modern of its kind in

Czechoslovakia.30 The economic cooperation on the basis of cooperation contracts between

the East and the West was a new phenomenon since mid 60s, for example in Hungary since

1962. At the end of the 60s this process developed rapidly, so according to contemporary

estimates the number of cooperation contracts between the so called socialist and capitalist

states grew till 1970 to 350 even 400. The monitored process lagged considerably in

Czechoslovakia. It started in the years of reforms 1968 – 1970 when they managed to sign the

first fifteen cooperation contracts.31

4/ Forms and areas of economic cooperation of firms in Czechoslovakia and in others socialist states with firms in neutral countries in the years 1971 - 1984

In the 70s economic cooperation between the so called East and West reached one of the

main culminating points of the overall development. The mutual advantageous cooperation

was equivalent to contemporary principles of peace coexistence of politically different state

systems. The philosophy of these principles was expressed by final documents of Helsinki

conference on safety and cooperation from the year 1975. Just after Helsinki conference the

cooperation culminated. The cooperation was helped by mentioned international

organizations, as UNECE or UN Conference on Trade and Development (UNCTAD) and

29 Statistická rocenka CSSR (1970), p. 135; (1973), p. 131. 30 J. HRUŠÍK, 15 rokov Východoslovenských železiarní, Košice 1974. 31 Jana Sereghyová, Prumyslá kooperace s partnery v kapitalistických státech, in: Zahranicní obchod (1976), Nr. 11 – 12, p. 31; Jaroslav Mesršmíd, Zdokonalování a rízení výrobní kooperace s nesocialistickými zememi, in: Zahranicní obchod (1980), Nr. 5, p. 4.

institutions for foreign trade support in the individual countries, for example Vienna Institute

of Economic Balance. In the years 1966 – 1977 the yearly rise of the value of imports in

OECD countries to European Comecon states reached on average 11.1 % and in the case of

exports 5.1 %. The share of the OECD countries on the trade exchange of the Comecon states

with foreign countries grew to 30 % in 1975.32 This information at the same time showed the

critical growth of the foreign trade deficit of the Soviet Block countries which at the same

time had a very disadvantageous structure. That is why since the end of the 70s the Soviet

Union and its satellites tried to limit import and support export to developed democratic

countries by mainly administrative policy. On the break of the 70s and 80s after the entry of

President R. Regan’s administration in the USA, the relationships between the East and West

were again quite frozen and restriction in trade and transfer technologies were widened. That

is why mutual trade in the years 1978 – 1984 declined in average to 2.8 % as for the imports

to Comecon countries and to 1.8 % in case of exports.33

In the 70s and in the beginning of 80s older forms of cooperation between the East and

West were again being developed and gradually new forms of cooperation emerged. These

forms were basically equivalent to trends of economic and technical development in

democratic countries, though they had some special features. A number of contemporary

classifications determined a few main areas and minor specific forms of cooperation between

the Comecon countries and OECD. Among the main areas of cooperation belonged the classic

goods exchange, trade on the basis of long-run contacts, scientific-technical cooperation,

credit relationships and bank cooperation, common development of transport and lines,

creating mixed businesses, specialization and cooperation, as well as trade with licenses,

32 T. Zoubek, Možnosti prohloubení vzájemných vztahu mezi RVHP a EHS, in: Zahranicní obchod (1976), Nr. 7, pp. 19 – 21; Karel Zeman, Dlohoudobé tendence zahranicního obchodu mezi Východem a Západem, in: Zahranicní obchod (1986), pp. 12 – 15. 33 Karel Zeman, Ibid, pp. 12 – 15.

usually ranked as a form of cooperation. The area of specialization and cooperation was then

segmented into specific forms. We are talking here about offering licenses for finished

products, delivery of investment units and production lines, compensated by production, sub-

delivery on the basis of technologies and documentations of the partner, joint production on

the basis of specialization, joint entrepreneurship in research, development, production and

trade. The different forms of cooperation could be realized by direct payments or

compensations, by bilateral, trilateral or more lateral cooperation, possibly by cooperation on

the third markets etc.34 Most of the mentioned forms of cooperation were used by all

European states of Comecon. The utilization, though, was not the same everywhere. For

example the number of cooperation contracts with the West was estimated in 1973 to about

600. However, from that 240 belonged to Hungary, while the share of East Germany and

Czechoslovakia was marginal. Most of the cooperation of the Soviet Union was based on

compensations by delivery of raw material, mainly oil and gas. It used high credits, similarly

to Poland but it also was a significant offer of licenses. The highest form of cooperation was

joint entrepreneurship, namely establishing joint ventures with foreign investment. Among

Comecon countries this form did not come to practice until the 70s but only in Hungary and

Rumania, even though legislatively it was possible also in other countries. This form

developed the most in contemporary Yugoslavia, where in the year 1975 were already 52 joint

ventures with foreign investment of 1 billion $ 35

In Czechoslovakia in the beginning of 1970s strict anti-reform pressure of the regime was

introduced. However, objective needs of economy forced next development of cooperation

34 Vratislav Válek, Hospodárská kooperace mezi socialistickými a kapitalistickými státy, in: Zahranicní obchod (1975), Nr. 1, pp. 19 – 22; Hana Adámková, Formy rozvoje ekonomických vztahu mezi socialistickými a kapitalistickými státy, Ibid, Nr. 9, pp. 7 – 11; Jaroslav Šuchman, Soudobá funkce prumyslové kooperace v hospodárských vztazích zemí s rozdílnými spolecenskoekonomickými systémy, Ibid, Nr. 10, pp. 6 – 7; Jana Sereghyová, Prumyslá kooperace s partnery v kapitalistických státech, Ibid (1976), Nr. 11 – 12, p. 31 – 33; Miroslav Virius, Hospodárská spolupráce zemí RVHP s prumyslové vyspelými kapitalistickými státy, Ibid (1977), Nr. 9 – 10, pp. 8 – 13. 35 Ibid.

with the OECD countries, mainly in the volume of mutual trade exchange return. In the years

1970 – 1980 the return in value grew by 209 %. The share of the OECD countries on the

overall trade return of Czechoslovakia declined but only by 22.4 % to 23 %. For example in

Poland and Romania this share reached in 1975 about 41 % and 39 %. Passive balance and

disadvantageous structure of foreign trade in relation to developed democratic countries

meant a great problem also in Czechoslovakia. The situation in the year 1975 shows the table

number 4. In the year 1978 the value of exports reached only 72.5 % of the value of imports.

Measures for rise of imports and restrictions in the import sphere led to balance in the

beginning of 80s. The value of mutual trade declined, though, and its importance in

Czechoslovak trade also dropped. Till 1984 the share of developed western countries in

foreign trade return of Czechoslovakia declined to 15.7 %, which was almost the level of

critical year 1953.36

Table Nr. 4 - Structure of foreign trade between Czechoslovakia and four neutral states in the year 1975 in million Czechoslovak crowns article of goods

AUSTRIA

SWITZERLAND

Export

in %

Import

in %

Export

in %

Import

in %

raw materials semi - products

742.5

66.9

72.4

4.5

109.3

24.0

109.2

8.7

chemical products

55.5

5.0

356.3

22.0

90.7

19.9

371.1

29.7

engineering products

66.5

6.0

735.7

45.5

19.1

4.2

469.0

37.5

others industri- al products

111.7

10.1

267.6

16.5

104.4

23.0

60.2

4.8

different fini- shed products

49.3

4,4

143.8

8.9

31.5

6.9

112.6

9.0

foodstuffs

82.4

7.4

40.7

2.5

98.8

21.7

116.7

9.3

others products

2.2

0.2

1.9

0.1

1.1

0.3

13.0

1.0

total

1 110.1

100

1 618.4

100

454.9

100

1 251.8

100

balance of

36 Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 321; Miroslav Virius, Ibid, p. 8.

trade - 508.3 - 796.9

article of goods

SWEDEN

FINLAND

Export

in %

Import

in %

Export

in %

Import

in %

raw materials semi - products

52.8

13.6

114.3

29.6

1.0

0.6

82.4

47.3

chemical products

38.7

10.0

28.1

7.3

9.3

5.2

9.1

5.2

engineering products

100.7

26.0

193.3

50.0

77.3

43.0

27.1

15.6

others industri- al products

94.0

24.2

32.5

8.4

70.9

39.5

39.0

22.4

different fini- shed products

89.7

23.1

16.1

4.2

20.0

11.1

15.9

9.1

foodstuffs

11.9

3.1

1.5

0.4

1.0

0.6

0.7

0.4

others products

0.1

–

0.6

0.1

–

–

–

–

total

387.9

100

386.4

100

179.5

100

174.2

100

balance

+ 1.5

+ 5.3

Source: Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1976). Graf Nr. 5 - Foreign trade return between Czechoslovakia and Comecon and development capitalist states in million Czechoslovak crowns in the years 1971 – 1984

020 00040 00060 00080 000

100 000120 000140 000160 000180 000

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

A

B

Note: A = Comecon; B = development capitalist states Source: Historická statistická rocenka CSSR, Praha 1985, p. 320 – 321. Graf Nr. 6 - Foreign trade return between Czechoslovakia and development capitalist states

and four neutral states in million Czechoslovak crowns in the years 1971 – 1984

05 000

10 00015 00020 00025 00030 00035 00040 000

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

A

B

Note: A = development capitalist states; B = four neutral states Sources: Statistická rocenka CSSR (1976), p.429; (1979), p.442; (1983), p. 452; (1987), pp. 445 – 446; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1973); (1976); (1979); (1980); (1986); Historická statistická rocenka CSSR, Praha 1985, p. 320 – 321.

Altogether more advantageous was the development in relation to the four neutral states.

The overall value of trade with these countries grew also after 1978, so in comparison to 1970

– 1984 it rose by 219 %. The greatest growth of trade was happening with Austria and

Finland by 303 % and 266 %, while with Switzerland 207 % and in the case of Sweden only

84 %. Austria and Switzerland belonged among the 10 biggest trade partners of

Czechoslovakia. The deficit of mutual trade in Czechoslovakia was deepest in the second half

of the 70s in trading with Switzerland and Austria. The proportion of export to the value of

import of Czechoslovakia reached in case of Switzerland only 36 % in 1975 and in trading

with Austria roughly 55 % in 1978. In balance with Sweden and mainly Finland the

differences were smaller. In the first half of the 80s Czechoslovakia managed to balance the

deficits with the exception of Switzerland. The overall share of neutral states in the foreign

trade return of Czechoslovakia grew in the years 1970 – 1980 by about 5.19 % to 6.29 %.

Then in spite of the overall value of trade growth it declined till 1984 to 4.5 %. The share of

neutral countries in trade return of Czechoslovakia with the OECD states was 27 % in 1984.37

The prerequisite of quite successful results of the Czechoslovak cooperation with the

monitored four countries was the switch of contract relationships to a higher quality level.

Table Nr. 5 - The share of neutral states in the foreign trade return of Czechoslovakia in the years 1973 – 1988 YEAR

AUSTRIA

SWITZERLAND

SWEDEN

FINLAND

TOTAL

1973 2.46 2.11 0.89 0.27 5.73 1975 2.80 1.75 0.79 0.36 5.70 1978 3.06 1.80 0,70 0.31 5.87 1980 3.12 2.18 0.62 0.37 6.29 1984 2.30 1.50 0.40 0.30 4.50 1988 2.80 1.48 0.47 0.36 5.11 Sources: Statistická rocenka CSSR (1976), p.429; (1979), p.442; (1983), p. 452; (1987), pp. 445 – 446; (1990), pp. 463, 467; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1973); (1976); (1979); (1980); (1986); (1988); (1990). Czechoslovakia fully utilized liberalization of trade on the basis of article XXIV of GATT,

as well as other new ways of development of contract relationships. With Austria there was a

valid long-run trade agreement already in 1972, as well as an agreement about economic

cooperation. In trade with Switzerland Czechoslovakia continued in utilizing older agreement

from 1953 and in May 1971 new long-run Agreement about economic contacts was signed.

Between Sweden and Czechoslovakia there was a valid agreement from 1971 about research-

technical cooperation and since March 1973 also a new long-run agreement. The contract

relationships with Finland went the furthest. In September 1974 Finland and Czechoslovakia,

except for a long-run agreement, signed also a specific agreement about elimination of trade

obstacles, on the basis of which it was managed to mutually eliminate most import tariffs till

1985. At the same time since March 1971 there was a valid agreement about economic and

technical cooperation, supplemented in October 1982 with an agreement of higher form in the

37 Statistická rocenka CSSR (1976), p.429; (1979), p.442; (1983), p. 452; (1987), p. 446; Historická statistická rocenka CSSR, Praha 1985, pp. 322 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní

form of long-run program of development of economic and research-technical cooperation.

Czechoslovakia also took part in meeting the agreement of Comecon with Finland from May

1973.38

Graf Nr. 7 – Foreign trade between Czechoslovakia and four neutral states in the years 1971 – 1984 in million Czechoslovak crowns a/ Export

0

500

10001500

2000

2500

3000

3500

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

A

CH

SSF

b/ Import

0500

10001500

20002500

30003500

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

ACHSSF

obchod (1973); (1976); (1979); (1980); (1986). 38 Ivan Peter, 25 let ceskoslovenského zahranicního obchodu s prumyslove vyspelými státy, in: Zahranicní obchod (1973), Nr. 3, p. 13; Eugen Laczó, Hospodárské vztahy mezi Ceskoslovenskem a Švédskem, Ibid (1976), Nr. 8, pp. 22 – 23; Jozef Keller, Ceskoslovensk-finský obchod a hospodárská spolupráce, Ibid (1977), Nr. 7, pp. 8 – 10; Vratislav Beneš/Zdenek Hálek/Jirí Starík, Vývoj vnejších ekonomických vztahu Švýcarska, Ibid (1984), Nr. 4, p. 15; Stanislav Veselý, Ceskoslovensko-finské hospodárské vztahy, Ibid (1986), Nr. 10, pp. 5 – 6;

Note: Switzerland until year 1975 with Lichtenstein - Switzerland in the years 1973, 1976, 1981, 1982, 1983 estimated Sources: Statistická rocenka CSSR (1976), p.429; (1979), p.442; (1983), p. 452; (1987), pp. 445 – 446; Historická statistická rocenka CSSR, Praha 1985, pp. 320 – 323; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1973); (1976); (1979); (1980); (1986).

From the mentioned facts we can see that Czechoslovakia, next to classical goods exchange,

utilized also new forms of cooperation also in higher government, as well as sector and

factory level. Examples of this were the mentioned agreements about research-technical

cooperation, realized by international groups of experts for cooperation in research and

production in the individual areas of economy. The license trade after 1970 grew most

significantly only in the sphere of passive licenses. In the years 1971 – 1979 Czechoslovakia

bought 273 licenses, but the sale only reached 83 licenses, which was significantly less than in

the 60s. The share of Slovakia was 78 passive and 16 active licenses. The lag of license trade

was most visible in the deficit of fees. In the said years Czechoslovakia paid for passive

licenses in average 325 million Czechoslovak crowns yearly, while the income from active

licenses reached in average 78 million Czechoslovak crowns.39 Till mid 1970s signing of

cooperation contracts with the OECD countries stagnated in Czechoslovakia. In the year 1972

a law No. 85 about economic cooperation with foreign countries was passed, but signing

contracts was complicated by lengthy approval. In the years 1971 – 1976 Czechoslovakia

signed only eight new contracts of production cooperation with the developed western

countries. The government circles realized the danger of technological underdevelopment in

Czechoslovakia that is why the government passed three resolutions No. 273/1975, No.

175/1976 and No. 238/1977 about support, simplifying and widening of signing cooperation

contracts with capitalist countries. The passed measures were codified by the law about

economic contacts with abroad No. 42 from 1980. The law made it possible to establish

39 Statistická rocenka CSSR (1973), p. 131; (1976), p. 135; (1978)., p. 231; (1980), p. 248.

representative offices of foreign companies and banks in Czechoslovakia. Domestic

companies could establish their offices in abroad but only with the permit of the

government.40 New legislation contributed to acceleration of the cooperation process. In the

years 1976 – 1979 the number of contracts with developed capitalist countries grew from 23

to 41. Out of them four belonged to Austria and two of them to Sweden. Till the year 1983 the

number of contracts grew to 80. Austria had the second place in the number of cooperation

contracts. The number of contracts with Sweden grew and another contract partner was added

Switzerland. A quite spread form of activities in abroad was creating affiliations and mixed

businesses by Czechoslovak ventures in the OECD countries. In mid 70s there were about 50

ventures active this was beyond the Czechoslovak border. An example of cooperation in the

form of compensations was Czechoslovak cooperation with the Austrian concern Steyer-

Daimler Puch AG through sub-deliveries by agricultural machines production. 41

Table Nr. 6 – Number of cooperation contracts between Czechoslovakia and developed capitalist countries country number of agreements 1976 1979 West Germany 12 19 France 2 5 Austria 3 4 Sweden 1 2 Italy 2 4 Netherlands 1 4 Malta – 2 Portugal – 1 Belgium 1 – Total 23 41

40 Jana Sereghyová, Ibid, pp. 31 – 33; Jaroslav Mesršmíd, Zdokonalování a rízení výrobní kooperace s nesocialistickými zememi, in: Zahranicní obchod (1980), Nr. 5, p. 4 – 6; Ludvík Kopác, Nová zákonná úprava hospodárských styku se zahranicím, Ibid (1980), Nr. 7 – 8, pp. 3 – 6. 41 Jaroslav Mesršmíd, Ibid, pp. 4 – 6; Jaroslav Matoušek/Jaroslav Šuchman, Nekteré zkušenosti z ceskoslovenských kooperací s firmami vyspelých kapitalistických státu, in: Zahranicní obchod (1984), Nr. 2, pp. 2 – 4.

Source: Jaroslav Mesršmíd, Ibid, pp. 4 – 6; Jaroslav Matoušek/Jaroslav Šuchman, Nekteré zkušenosti z ceskoslovenských kooperací s firmami vyspelých kapitalistických státu, in: Zahranicní obchod (1984), Nr. 2, pp. 2 – 4. 5/ Forms and areas of economic cooperation between firms in Slovakia and in neutral countries in the years 1971 – 1984 After 1970 economic expansion of Slovakia in abroad was partially developed in spite of

many problems. Till 1980 Slovakia raised its share in foreign trade return of Czechoslovakia

to about 25 %. Value of foreign trade return between Slovakia and all countries with free

market economy increased in the years 1967 – 1980 approximately from 2 800 million to

19 850 million Czechoslovak crowns. Bat In the year 1980 the value of exports reached only

51 % of the value of imports.42

Graf Nr. 8 - Foreign trade between Slovakia and all countries with free market economy in million Czechoslovak crowns the years 1967 – 1980

0

2000

4000

6000

8000

10000

12000

14000

1967 1970 1973 1976 1978 1980

A

B

Note: A = import; B = export Source: Encyklopédia Slovenska, Vol. 6, Bratislava: Veda 1986, pp. 483 – 484. The main share in energizing economic cooperation with the West had Slovak subsidiary

CSOB, foreign trade businesses with headquarters in Slovakia and general main offices of

business trusts. The activities were being developed, except for goods exchange, in the area of

bank cooperation, compensational trade, research-technical assistance, investments in abroad,

fairs and gradually also cooperation. Bratislava branch of CSOB secured almost all foreign

42 Encyklopédia Slovenska, Vol. 6, Bratislava: Veda 1986, pp. 483 – 484.

currency operations in Slovakia. It financed foreign trade businesses in Slovakia, investments

in abroad, purchases of machines and foreign technologies, international fairs; it offered

cooperation accounts, mediated information from abroad and direct contacts with banks in

developed capitalist states. It covered payments and settlements with about 65 states beyond

Comecon. It had direct contacts with 12 to 14 foreign banks, where the number of its accounts

grew to 20 in 1970s. The most vivid contact was with the banks in the USA, West Germany

and in Austria. The return at all foreign accounts reached a sum of 3 581 million

Czechoslovak crowns in1979, out of which 20.1 % belonged to Austrian banks. CSOB

gradually opened accounts in Oberbank Linz, Osterreichische Länderbank Wien, Eisensdtäder

Bank Eisenstadt, Osterreichische Creditanstalt Wien. A distinctive activity was mediating of

trade information from abroad. In the years 1971 – 1977 their number grew from 357 to

1 918, out of which 10.4 % belonged to Austria.43 Bratislava CSOB financed activities of

businesses and institutions of foreign trade with their headquarters in Slovakia in the sphere of

higher forms of economic cooperation. These traded mainly in the sphere of engineering,

alternatively armaments industry and in chemical, wood pulp – paper, timber and furniture

industry. In the mentioned sectors services were offered through Bratislava also for the Czech

Republic. Till mid 70s the subsidiary registered only one single production cooperation

between a foreign trade business Omnia and French company SNR Annecy which concerned

the production of bearing. In the end of the 70s the number of cooperation contracts grew to

five without specified content. The greatest investment was financed in West Germany by the

branch, where the foreign trade company Kerametal bought the company Contierz,

Dusseldorf, focused on fireproof materials for 17 million DM. A big event in neutral states

was the import of machines to produce alkali wood pulp from Sweden cooperating with the

bank Svenska Handelsbanken. The greatest event of Bratislava branch in the 70s was the

43 Annual reports of Bratislava branch of Czechoslovak Trade Bank (CSOB) (1971 – 1984), Archiv of Bratislava branch of CSOB, sig. 1.7.1.1., box Nr. A 2.

import of polyethylene unit for the petrochemical combine Slovnaft in Bratislava from the

French company Venot-pic in the value of 1 billion Czechoslovak crowns. It was the biggest

transaction in the relationship between Czechoslovakia and France.44

The economic cooperation of Slovakia with the four neutral countries had good

presuppositions because the key sectors of Slovak industry played an important role in the

economic structure of these countries. From related sectors I chose for the characteristic of

mutual relationships chemical, wood-pulp-paper and timber-furniture industry, which had

central offices of foreign trade directly in Slovakia. In the field of chemical industry played a

relevant role in foreign trade relationships the foreign trade businesses Chemapol, Petrimex

a Incheba, out of which the first two had an independent central office in Slovakia and the

third was a pure Slovak company. Incheba since 1971 organized yearly a homonymous

international fair with participation of representatives from about 20 developed capitalist

states in Bratislava, which secured economic contacts for chemical industry of the whole

Czechoslovakia. Chemapol and Petrimex realized a greater part of their business through the

fair Incheba. For example the trade return of Petrimex with the so called non-socialist states

on the basis of contracts from Incheba grew in the years 1971 – 1980 from 167 million to 481

million Czechoslovak crowns.45 In the years 1977 – 1980 Austria and Switzerland became the

third and fourth biggest partner of Petrimex at Incheba. These countries belonged also to the

most significant partners of Chemapol. Its return with developed capitalist countries for the

fist half year of 1977 reached 1.3 billion Czechoslovak crowns. To Austria and Switzerland

belonged 27 %. At the same time Chemapol reached the greatest share in trade return between

Czechoslovakia and Switzerland. In the year 1982 it meant 20 % of the export value from

Czechoslovakia and 60 % of import. To Petrimex belonged the third and fourth place. To the

44 Ibid. 45 Reports about results of international fair Incheba Bratislava (1971 – 1974), Slovak National Archiv (SNA), Fund Petrimex, box Nr. 44; Reports about results of international fair Incheba Bratislava (1975 – 1980), Ibid, box Nr. 45; Reports about results...(1980 – 1985), Ibid, box Nr. 47.

successful development of trade contributed long-run five-year contracts. At Incheba long-run

contracts with the Austrian firms Osterreichische Stickstofwerke Linz and Dow Chemical and

with the Swiss companies Sandoz Basel and Ciba – Geigy were signed. An important position

in trading had Swiss firms Alkahest Zurich a Lonza, Amoco too.. Other forms were the so

called general trade on the basis of reciprocal exchange. These were signed for instance with

Basel group of firms. Among the participants of Incheba belonged also Swedish and Finish

companies. The Czechoslovak companies signed here yearly contracts with about 200 firms,

out of which about 60 belonged to developed Western countries. The trade in abroad was

mediated by trade mission businesses on the basis on contracts and mixed companies with

investments of Czechoslovakia. For example companies Chemapol Schweiz, Chemapol Wien

and Chemapol Svenska. At the end of the 1970s Czechoslovak chemical industry was

represented in the developed capitalist states by 12 trade mission companies and six mixed

businesses.46

The foreign economic relationships in timber-furniture industry were mainly mediated by

companies Drevounia and Drevoindustria, as well as general main office of sector companies

in Bratislava. On the field of goods exchange timber and furniture production played the main

role in the Slovak export, while in imports important for the sector were especially machines

and technologies. Only in the years 1969 – 1977 the export to capitalist countries grew from

251 million to 720 million Czechoslovak crowns. The greatest share on exports had timber

and semifinished products, as plywood, pallets, sleepers, parquets, prisms. Different kinds of

quality furniture, sports equipment and wooden prefabricated houses were also an important

element, around 25 % of the value of export in 1977. Among customers of the sector were

firms of all four neutral states. Export assessments though observed that the most reliable

customer buying furniture became the Swedish company IKEA in the second half of the 70s.

46 Ibid; Vratislav Beneš/Zdenek Hálek/Jirí Starík, Vývoj vnejších ekonomických vztahu Švýcarska, Zahranicní obchod (1984), Nr. 4, p. 15 – 16.

Its requirements yearly exceeded the possibilities of Slovak furniture industry. A number of

companies in cooperation with IKEA specialized in certain kinds of furniture. A similar

cooperation IKEA developed also in other Comecon countries.47 Deliveries of machines from

capitalist countries played a more important role till mid 60s in technical equipping of the

sector. Till 1972 machines from these deliveries raised the share on the overall value of

engineering equipment of the sector to 11 %. Their acquiring value was 392 million

Czechoslovak crowns, out of which almost 51 % belonged to machines from Sweden, Austria

and Switzerland. In the mid 70s a program of accelerated modernization in the sector was

approved on the basis of investments to machinery in the sum of 3,055 billion Czechoslovak

crowns for the years 1976 – 1980. The share of the value of machines from developed

capitalist countries in the mentioned sum was to reach 65 %. Concretely I can mention the

import of production lines for pallets and fiberboards from Swedish companies United Shoe

Machinery Company Orebro and Defibrator Stockolm for Slovak timber enterprises Murán

and Bucina Zvolen. However, import from the West was understood more as a “necessary

evil” in the monitored time period. The production of machines from this import was to be

used for regressive export to the West, to lower the deficit in foreign trade or to make up for

import from other western countries. Another target was export to the markets of the third,

mainly underdeveloped, countries.48 In the beginning of the 1970s an interesting

compensation trade was planned between the timber sector and the Swedish company Saab.

47 Plans of timber and furn iture export to the capitalist countries in the year 1977, SNA, Fund General main office of timber and furniture industry, box Nr. 84. 48 Results of timber and furniture export and import with the capitalist countries in the years 1967 – 1969, SNA, Fund General main office of timber and furniture industry, box Nr. 45; Results of timber and furniture export and import with the capitalist countries in the year 1970, Ibid, box Nr. 49; Plan of machines import from the capitalist countries in the year 1973, Ibis, box Nr. 57; Plan of machines import from the capitalist countries in the years 1976 – 1980, Ibid, box Nr. 164.

For the delivery of timber semifinished products and furniture Saab was to deliver five

computers in the value of 4,250 million $.49

In the second half of the 70s possibilities of production cooperation were searched for

quickly, contemporary government appeals invited this. Every resort was to submit proposals

for cooperation. General main office of the monitored sector submitted in 1976 four proposals

of cooperation in the form of specialization and mutual sub-deliveries in production of

common products. This way the Swiss company BALZ Langnau and Slovak enterprises

Bucina Zvolen a Drevoindustria Žilina was to produce caging machines for timber and the

Austrian firm Semperit with the company Západoslovenské nábytkárske závody (Western

Slovak Furniture Factory) upholstered furniture. Other proposals concerned common

production of transporters with the Austrian company Springer-Friesah Kärten and sorting

tracks with the Finish company SATEKO Helsinki. However, till 1978 only cooperation with

Switzerland started to be elaborated. General main office said that production cooperation

were hard to be carried out for frequent price changes, demands on quality, short delivery

terms and changes in the production program in the West, incompatible with principles of

long-term planning in socialism.50 A more feasible solution seemed buying licenses. It was

managed to buy a license for ski production of makes ALUGLAS, DYNAGLAS

a COMPACT from an Austrian company Hagan. Other licenses were offered by British, West

German and Italian companies. A presupposition of production cooperation, as well as buying

licenses was their integration to five-year long run plan. For the five-year plan in the first half

of the 80s timber companies suggested to buy for instance the license for making hockey

sticks from the Finnish company KOHO, for flooring with Swedish companies Tarkett A. B.

49 Plan of compensation trade between the timber sector and the Swedish company Saab in the year 1971, SNA, Fund General main office of timber and furniture industry, box Nr. 49. 50 Proposals of cooperations with the firms of capitalists countries in timber and furniture industry from the year 1976, SNA, Fund General main office of timber and furniture industry, box Nr. 140.

a Khärs Maskiner AB or pigmentation of resins from an Austrian company Funder for

enterprise Bucina Zvolen. However, they most probably did not manage to include them in

the plan. 51 Companies of the sector proposed also new cooperation contracts. Problems with

realization, though, continued, to which was added a critical lack of foreign currency as a

result of passive trade balance. For example production cooperation of the company Drevina

Turany with the Austrian firm Leitz in the form of sub-deliveries was to reduce import of

tools for making wooden windows and this way to lower foreign currency strenuousness.

However, the general main office stated that the Slovak company would not be capable to

meet the deliveries to Austria in the required deadlines and quality. Other cooperation were to

be carried out with an Austrian company Weiss Wien in production of the device for wooden

briquettes, with the Finish company Makrotalo who was to bring in the whole technology for

wooden panels production with the aim to export to the third world markets or with the

Swedish company Kockmus in production of wood-carving machines.52

Multilateral cooperation with neutral states was developed also by the trust of Slovak wood

pulp and paper factories (Slovcepa). In the years 1977 – 1984 important technical

reconstruction took place in the sector. Sweden and other neutral states probably shared in the

delivery of machinery for wood pulp combine in the town of Ružomberok in these years in

the value of 218 million $. Since mid 70s under the government pressure Slovak companies

like Slovcepa started to organize production cooperation. In 1976 general main office of the

sector recommended the cooperation with the Austrian firms Duropack Wien a Arlander

Papierfabrik Graz in the form of semifinished products exchange and through sub-deliveries

51 Results and program of licenses buying in timber and furniture industry from the year 1978, SNA, Fund General main office of timber and furniture industry, box Nr. 174; Program of licenses buying in timber and furniture industry in the years 1981 - 1985, Ibid, box Nr. 199. 52 Report about cooperation between company Drevina Turany and the Austrian firm Leitz from the year 1982, SNA, Fund General main office of timber and furniture industry, box Nr. 214; Results and proposals of cooperations with the firms of capitalist countries in timber and furniture industry from the year 1982, Ibid, box Nr. 212; Results and proposals of cooperations… from the year 1983, Ibid, box Nr. 222.

of paper for final production of hygienic products in Austria. In 1977 the cooperation with the

Austrian firm J. M. Voith, St. Polten also started to be elaborated. For the deliveries of

semifinished products from Štúrovo paper-mill the Austrian company was to deliver

machinery for production of hygienic necessities in the company Chemicelulóza Žilina.53 In

the coming years cooperation was carried out with the firm Voith with the aim to acquire

machinery for processing scrap paper in the company Štúrovo. Cooperation was linked with a

study journey of the Slovak technicians to the company Voith in St. Polten. Cooperation in

the form of research fellowships was developed also with other countries since the end of

1960s. We are talking about the countries which had an agreement with Czechoslovakia about

research-technical cooperation like Finland and Sweden. For example out of six research

fellowships in abroad, planned by the trust Slovcepa for the year 1978, five were to happen in

Finland. Their content was a study of individual technologies of wood pulp and paper

production. At the beginning of the 80s Slovcepa businesses had signed cooperation contracts

also with two West German companies. At the same time cooperation was carried out in other

sectors. One of the most important cooperations of Czechoslovakia with Finland at the

beginning of the 80s was the cooperation between the Slovak company Slovenská armatúrka

Myjava and Finish firm Oras Oy Rauma in production of water faucets.54

6/ New possibilities of economic cooperation between Slovakia and neutral states in the years 1985 - 1989 A new situation in the relationship East-West as for the quality was formed after the

beginning of new political leadership in the Soviet Union in 1985 which attempted a reform

of political and economic system. Changes were immediately visible also in other states of the

53 Reports about Swedish investment in wood pulp factory Ružomberok in Annual reports of Bratislava branch of Czechoslovak Trade Bank (CSOB) (1979 - 1984), Archiv of Bratislava branch of CSOB, sig. 1.7.1.1., box Nr. A 2; Results and proposals of cooperations with the firms of capitalist countries in wood pulp and paper industry from the year 1977, SNA, Fund Slovcepa, box Nr. 2. 54 Plan of study journeys of Trust Slovcepa to the capitalist states for the year 1984, SNA, Fund Slovcepa, box Nr. 43; Plan of research fellowships of Trust Slovcepa in the capitalist states for the year 1978, Ibid, box Nr. 5; Stanislav Veselý, Ceskoslovensko-finské hospodárské vztahy, in: Zahranicní obchod (1986), Nr. 10, p. 6.

Soviet Block. In the circumstances of the so called Perestroika, enforcement of higher forms

of economic cooperation was accelerated, as was cooperation but mainly businesses with

capital investment of countries with free market economy. Some socialist states were already

legislatively prepared for the inflow of foreign capital. In Czechoslovakia the establishment of

businesses with investments of Western countries remained “taboo” till mid 1980s.

Conservative government circles though were forced to act. Government decision No. 187

from the year 1985 freed the circumstances in this field. Law No. 173 from November 1988

brought an essential change. It permitted establishing businesses with minor foreign capital

investments. The only duty of the joint venture against the government authorities was paying

taxes. The law 202/1988 also had a great importance because it made possible direct trade

relationships of legal entities with abroad. The mentioned laws definitely disturbed the state

monopoly of foreign trade. In the foreign currency sphere there was a switch from one

element rate, which unveiled distorted data in the official more element rate.55 The

Czechoslovak trade with developed states with free market economy grew in the years 1980 –

1988 in the official rate by 62 %, but in real only by 50 %. There was a different situation

concerned the share of developed western countries in the overall rate of Czechoslovak

foreign trade. In the official rate it grew in 1984 – 1988 from 15.7 % to 17.4 %. Real rate for

the year 1988, though, showed the share of 29 %. Similar differences were also seen in

information about foreign trade with neutral states. Their share in trade rate of

Czechoslovakia officially grew in the years 1984 – 1988 from 4.2 % to 5.2 %, but according

to the new rate the share in 1988 was 8.6 %. The share of individual countries in 1988

fluctuated from 0.4 % in case of Finland to 2.8 % by Austria, while the new rate showed from

fluctuation from 0.6 % to 4.7 %. The overall trade rate with the neutral states in 1984 – 1988

55 Gustav Svoboda, Podniky se zahranicní majetkovou úcastí, in: Zahranicní obchod (1989), Nr. 1, p. 3; Jaromír Ružicka, Založení podniku se zahranicní majetkovou úcastí, Ibid, pp. 7 – 8; Jaromír Zahradník, Zmeny v rízení devizového hospodárství, Ibid, Nr. 2, pp. 2 – 3; Jaromír Ružicka, Prímé vztahy, Ibid, pp. 4 – 5.

grew in the old rate by 38 %. However, with the exception of Austria, the deficit of trade

exchange grew again significantly not favorably for Czechoslovakia56.

Table Nr. 7 - Structure of foreign trade between Czechoslovakia and four neutral states in the year 1985 in million Czechoslovak crowns article of goods

AUSTRIA

SWITZERLAND

Export

in %

Import

in %

Export

in %

Import

in %

raw materials semi - products

1 614.6

52.0

183.1

6.8

256.7

23.0

345.4

14.0

chemical products

325.3

10.5

572.8

21.4

255.1

22.8

604.7

24.5

engineering products

86.5

2.8

1 080.6

40.3

76.4

6.9

791.3

32.1

others industri- al products

750.2

24.1

306.4

11.4

257.6

23.1

207.7

8.4

different fini- shed products

116.4

3.7

389.1

14.5

69.3

6.2

115.2

4.7

foodstuffs

208.4

6.7

84.2

3.2

196.5

17.6

379.7

15.4

others products

6.1

0.2

64.3

2.4

5.3

0.4

23.4

0.9

total

3 107.5

100

2 680.5

100

1 116.9

100

2 467.4

100

balance of trade

+ 427

-1 350.5

article of goods

SWEDEN

FINLAND

Export

in %

Import

in %

Export

in %

Import

in %

raw materials semi - products

65.6

13.6

109.6

20.2

7.2

2.0

113.0

29.0

chemical products

53.4

11.1

43.5

8.0

24.8

7.0

12.7

3.2

engineering products

98.1

20.4

273.7

50.2

76.5

21.6

114.1

29.3

others industri- al products

140.0

29.0

46.3

8.5

161.0

45.5

116.3

29.8

different fini- shed products

108.6

22.5

24.5

4.5

81.9

23.1

21.3

5.5

56 Statistická rocenka CSSR (1983), pp. 451 – 452; (1987), pp. 445 – 446; (1990), pp. 463, 467; Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1980); (1986); (1989); (1990).

foodstuffs 14.1 2.9 40.6 7.5 1.1 0.3 11.2 2.9 others products

2.2

0.5

5.9

1.1

1.7

0.5

1.3

0.3

total

482.0

100

544.1

100

354.2

100

389.9

100

balance of trade

- 62.1

- 35.7

Source: Fakta o ceskoslovenském zahranicním obchodu, in: Zahranicní obchod (1986). Similarly to the whole Czechoslovakia, also in Slovakia after the year 1985 obstacles of the

higher forms of cooperation with the West were gradually removed. For example Bratislava

subsidiary of CSOB saw a growth of the number of cooperation accounts in the years 1985 –

1988 from 5 to 22. Among them were also accounts of cooperation with Swiss engineering

company Tavaro Furrer, as well as with the Austrian firms Greiner and Staufer Chemical.

Other cooperation contracts concerned companies from West Germany, France and Belgium.

The new role of the subsidiary was to mediate information for businesses planning direct

relationships with abroad and establishing businesses with foreign capital. The subsidiary for

instance shared in solving a problem with crediting the business venture AVEX producing

video recorders, financed by the Austrian bank Genossenschaftliche Zentralbank Wien and it

gave out information to travel industry business Recopp Tour, established by the mentioned

Austrian bank, Slovak business Tatratour and Austrian company Imexim Wien. 57

In the years 1985 – 1989 also the development of higher forms of foreign cooperation

organized in individual sectors went forward. For example in the wood pulp and paper sector

the company Bukóza Vranov started cooperation with the Finnish companies Alhstrom and

Rauma Repola, Swedish firm Sund and with Austrian entrerprise Andritz. to improve the

quality of cellulose production. It planned to buy a line for processing wood scrap from the

Finnish company Perusyhtymä. The company Chemicelulóza Žilina started cooperation with

57 Annual reports of Bratislava branch of Czechoslovak Trade Bank (CSOB) (1985 – 1988), Archiv of Bratislava branch of CSOB, sig. 1.7.1.1., box Nr. A 2.

Austrian companies Andritz a TB Pieselinger in producing cellulose and with Austrian

company Storalen in the area of paper products.58 In timber and furniture industry it was

managed to carry out a few planned cooperation contracts. Furniture company Mier

Topolcany extended their trade cooperation with the Swedish company IKEA by a

cooperation relationship in producing office furniture designed in IKEA. The company Mier

also planned joint production of upholstered furniture with the Finish company Lepofin.

Another company of the sector Drevoindustria Žilina cooperated with the Austrian company

Ski Fabrik Atomic in producing ski through sub-deliveries.59 The situation in the last period

before the fall of the totalitarian regime was characterized by one of the greatest

contemporary cooperation projects with the West, a joint furniture company, again prepared

in cooperation with the Swedish company IKEA, which had three cooperation contracts in

Slovakia. The project of the venture had all the attributes of standard foreign investment. The

form of the investment was peculiar, though. The company IKEA Engineering was to offer

technology through leasing for two productions in Bratislava and Trnava. The export from

these productions would grow from 5 million to 130 million Czechoslovak crowns yearly.

The joint venture was to become one of the most important suppliers to the trade network

IKEA. The realization of the project was thwarted by the fall of totalitarian regime. After the

year 1989 IKEA established its business in Slovakia but its furniture is imported from

abroad.60

7/ Conclusion

The data about the development of economic relationships between the so called East and

West after the year 1945 affirm that “permeability of the Iron curtain“ was great and it grew

58 Results and proposals of cooperations with the firms of capitalist countries in wood pulp and paper industry from the year 1986, SNA, Fund Slovcepa, box Nr. 60. 59 Report about results of cooperations with the firms of capitalist countries in timber and furniture industry from the years 1987 – 1988, SNA, Fund General main office of timber and furniture industry, box Nr. 299; 60 Pprojects of the joint furniture company with the Swedish company IKEA from the years 1987 - 1988, SNA, Fund General main office of timber and furniture industry, box Nr. 295.

from 1953. It was the result of objective economic needs of both sides but also a reflection of

“the victory of reason over ideology“. The said facts were true especially for the relationships

of Czechoslovakia and other states of the Soviet Block to neural states. It is enough to say that

the rate of mutual trade between Czechoslovakia and the four neural states grew in the years

1953 – 1988 about twenty-two times. Austria and Switzerland belonged since the 70s among

the ten most important trade partners of Czechoslovakia. Economic contacts with Sweden and

mainly Finland in a certain measure lagged behind the possibilities, which offered their good

interstate relationships and signed agreements. Since the 1960s also the development of

higher forms of economic cooperation went forward. However, Czechoslovakia, and in it

Slovakia distinctively, evidently fell behind in the development of economic relationships as a

result of thwarted economic reforms after 1968.