Creaking economies of East bloc nations show serious strains
These are troubling times for the prime ministers of Comecon, the East bloc's common market. Although these Communist leaders are meeting as far from Poland as they can get and still be in East Europe, Poland's wobbly economy is very much on their minds.
Yet the Polish crisis is by no means the only challenge confronting the Comecon leaders meeting in Sofia, Bulgaria, in the East bloc's Deep South.
But for that crisis, the overriding concern would be why the ambitious economic integration program launched among members and associate states a decade ago has made such limited progress.
The Soviet Union's East European allies are disgruntled with a system that suits the Russians but one way or another militates against the smaller fry, especially in their quest for diverse economic links with the West.
A major fault, as some East Europeans see it, is the cramping, overcentralized system within Comecon itself as well as in its individual states. The system is too rigid to accomodate the different levels of development within the group.
Here is a rundown of the serious problems confronting the East bloc's common market:
* Economic growth is declining.
* Agricultural and industrial production are down.
* Foreign indebtedness is up -- spectacularly so in the case of Poland, whose foreign debts have soared to a catastrophic $26-$27 billion.
Most immediate priority of the communist leaders who began their meeting July 2 is Poland.
Until recent years, it was regarded as the linchpin of a northern "steel triangle" with East Germany and Czechoslovakia, the three advanced "industrials" of Eastern Europe. But no longer. Since last summer, its default to these two countries has run between $200 and $300 million.
Export to its Comecon partners has dropped 17 percent overall, and trade with them slumped to a deficit of almost $1 billion last year after being strongly in the black in 1979.
The Poles have scaled down their deliveries for the new five-year period through 1985 but apparently are not meeting even these reduced levels. Not surprisingly, their partners, in turn, are cutting back on supplies of essentials like fertilizer just when the Polish economy needs them most.
The other East-bloc countries are voicing their displeasure more loudly because the shortfall in Polish supplies is forcing them to buy in hard-currency areas. Several Polish spokesmen recently warned the nation that its allies will not wait long before striking a balance sheet and acting accordingly.
This is quite likely what the East-bloc leaders are about in Sofia, though they, like the Western nations and banks that have extended credit to the Poles, have few options but to go on helping the Poles if Warsaw is ever to be in a position to meet trade obligations and pay off its debts.
It is more likely that some further "aid" program may emerge to tide Poland over the next 12 months, but it would have both political and economic conditions. A firm emphasis can be expected on stronger Polish leadership to hold the reform movement in bounds, as Moscow has demanded, especially in its "warning" letter to Warsaw last month.
Significantly, the individual East European parties followed with messages of their own that were further reminders that economic support has its conditions.
But no matter what they do about Poland, the Comecon's deeper, inherent problems will remain, and so will East European dissatisfactions with a system that serves the Russians better than it does them.
The weaknesses of the Soviet Union's own system are reflected in Comecon's. At a round-table of Soviet economists and managers a short while ago, theree was some plain speaking about the limits of Soviet planning, the way in which funds are allocated, and the inhibiting influence of Soviet management.
A straw in the wind? For Comecon to change, as the leaders meeting in Sofia know, change must come in the Soviet Union first.
A major factor calling for reform is the so-called transferable ruble in which Comecon trading is conducted. And prices, which are fixed in this collective currency, are labeled by critics as highly artificial.