Abstract
Because of their special political and economic nature, the Comecon countries are a qualitatively new source of foreign direct investment in the world economy. Their unique significance in this regard is not fully revealed by the quantitative measures presented in the preceding chapter. Essentially one-party states, the countries in question are ruled by Communist parties which play a paramount role at all levels of the economy. Espousing public ownership and economic planning as basic principles, they style as ‘socialist’ their socio-economic systems, and differentiate themselves, in Marxist-Leninist, ideological terms, from the ‘capitalist’ and ‘developing’ economies of the rest of the world. In the Western literature of the social sciences, they are often designated as ‘state-socialist’, to indicate the degree to which their economies are organised and managed by administrative agencies of government, in pursuit of objectives set for the state by the party. Private ownership, producer autonomy and consumer sovereignty play a minor, or distinctly secondary role, in all of these economies.1
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Notes and References
For details of the basic Soviet organisation of foreign trade, see G. Smith, Soviet Foreign Trade: Organization, Operations and Policy, 1913–1917 (New York: Praeger, 1973) and, for its East European variants, H. Matejka, ‘Foreign Trade Systems’, in H. Höhmann et al. (eds), The New Economic Systems of Eastern Europe, op. cit., pp. 443–78.
See the discussion in Wilczynski, The Economics and Po[itics of East-West Trade (London: Macmillan, 1969) and Pisar, Coexistence and Commerce, op. cit.
See P. Ericson, ‘Soviet Efforts to Increase Exports of Manufactured Products to the West’, Soviet Economy in a New Perspective (Washington, DC: US Government Printing Office for the Joint Economic Committee, US Congress, 1976) pp. 709–26, and M. Bornstein, ‘Systemic Aspects of the Responses of East European Economies to Disturbances in the International Economy’, in E. Neuberger and L. L. Tyson (eds), The Impact of International Economic Disturbances on the Soviet Union and Eastern Europe (New York: Pergamon Press, 1980) pp. 308–20.
The advantages of foreign direct investment analysed in Western theory under the categories of ‘ownership-specific’, ‘internalisation-incentive’, and ‘location-specific’ all come into play here. See J. Dunning, International Production and the Multinational Enterprise (London: George Allen and Unwin, 1981).
On the conditions for foreign equity investment in the Comecon economies, see McMillan and St Charles, Joint Ventures in Eastern Europe, a Three-Country Comparison (Montreal: C. D. Howe Research Institute, 1974) and the references cited in Chapter 2, note 31.
For a recent example of this emphasis in the Soviet literature, see L. A. Rodina, Sotsialiiticheskaia integratsiia i novye formy sotrudinichestva Vostok-Zapad (Moscow: Izdat. Nauka, 1983), pp. 72–89.
Much of the Soviet literature still reflects the official condemnation of the multinational activities of Western firms. Some Soviet authors nevertheless take note of their more positive features and the practical lessons to be derived from them. Compare V. V. Scherbakov and Iu. I. Iudanov, Eksport kapitala v usloviiakh dal’neishego obostreniia obshchego krizisa kapitalizma (Moscow: Vysshaiia shkola, 1981)
and M. Maksimova, SSSR i mezhdunarodnoe ekonomicheskoe sotrudnichestvo (Moscow: Mysl’, 1977). The East European literature often adopts a still more open view (see the discussion in Lauter and Dickie, Multinational Corporations, op. cit., or Zurawicki, Multinational Enterprises in East and West (Leiden: Sijthoff, 1979)).
L. Zevin, Novye tendenstii v ekonomicheskom sotrudnichestve sotasialisticheskikh i razvivaiushchikhsia stran (Moscow: Izdat. Nauka, 1970) pp. 160–70.
See A. I. Bel’chuk, (ed.), Novyi Etap Ekonomicheskogo Sotrudnichestva SSSR s Razvitymi Kapitalisticheskimi Stranami (Moscow: Izdat. Nauka, 1978);
N. Shmelev, Sotializm i Mezhdunarodnye Ekonomicheskie Otnosheniia. (Moscow; Mezhdunarodny Otnosheniia, 1979); and Rodina, op. cit. Also A. Vlasov, ‘New forms of Economic Relations of CMEA Member-Countries with Developing Nations’, Foreign Trade, No. 12, 1983.
The Soviet approach and experience has been treated in some detail in the author’s ‘Soviet Investment in the Industrialised Western Economies and in the Developing Economies of the Third World’, in Soviet Economy in a Time of Change (Washington, DC: US Government Printing Office, for the Joint Economic Committee, US Congress, 1979) Vol. 2, pp. 625–47. See also J. Harrison, ‘Commercial-Financial Dealings between the USSR and Market-Type Economies, with Special Reference to Soviet Banking, Maritime and Trading Operations in the West’ (unpublished PhD dissertation, University of Glasgow, 1978).
The policy of differentiation (Abgrenzung) has been pursued with special urgency by the German Democratic Republic to counter the Federal Republic’s Ostpolitik in the late 1960s and 1970s. See M. Croan, East Germany: The Soviet Connection (Beverly Hills: Sage Publications, 1976). For discussion of this rivalry with the Federal Republic as a function of East German policy towards the Third World, see M. Sodaro, ‘The GDR and the Third World: Supplicant and Advocate’, in Radu, Eastern Europe and the Third World, pp. 106–41.
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© 1987 Carl H. McMillan and the Trade Policy Research Centre
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McMillan, C.H. (1987). Actors and Strategies. In: Multinationals from the Second World. Trade Policy Research Centre. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08839-3_4
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