A nerve center for United States policymakers on Eastern Europe is security. Czechoslovakia has been a premier producer of armaments and plastic explosives used by terrorists. But its newly installed government wasted little time in announcing its intention to cease cooperation in foreign espionage and technology theft as well as the export of plastic explosives. ``Czech firms are producing armaments at a 50 to 60 percent capacity today, compared to one year ago, when it was at full capacity,'' maintains Vladimir Dlouhy, deputy prime minister and chairman of the State Planning Commission.

This reflects cuts in Czech defense spending and a reduction in Soviet orders, says Mr. Dlouhy, who also serves as Prague's chief trade delegate to Moscow and to Comecon. Slovakia, with a population of 5.5 million, is the region where defense production is concentrated. Armament production is the chief component of the region's economy.

``We cannot close all arms production tomorrow,'' says Dlouhy. ``We need an army, like all other nations,'' he says, and then acknowledges that the economic unemployment costs of reducing the industry will be formidable.

``We are trying to convert some factories from defense to civil production. Ford and an Italian firm may soon sign a deal to produce diesel engines,'' he says, adding that there is not much conversion taking place yet.

Notes Roger Robinson, an analyst with the Center for Security Policy and a former National Security Council adviser: ``Lowering Western security costs would be a strong argument for Western investment in Czechoslovakia.''

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