CZECHS LOOK WEST
EVENTS in Czechoslovakia give dramatic
proof that monolithic Socialism may ease penury but cannot yield growth and abundance. This is why all Eastern Europe is pulling away, in different degrees, from Socialist structures. Popular demand for a more liberal Czech regime is partly a response to the irrepressible facts of human nature, but it also chimes with the nation's economic needs.
The fact is that, if the nation's economy is to grow, Czechoslovakia simply must get out of COMECON, the Soviet orbit trading group. Membership makes her pay dearly for Russian goods, yet sell to Russia cheaply. Russia buys oil from Persia at one price, sells it more dearly abroad, but demands from the Czechs 15 roubles a ton, while Italy gets it for eight.
The Czechs have been forced to invest huge credits in Russia's new Tyumen oilfields. They are too dependent on the USSR for oil, iron and cotton. But they cannot buy raw materials on a world market demanding hard currency, which COMECON money is not.
To earn the hard money she needs to modernise her industry, Czechoslovakia must boost exports to the West. But most of her products do not stand up to Western competition, and her high quality goods are bespoken by COMECON under a range of agreements.
Small wonder, then, that Russia fears the Czech thaw. but to clamp down hard on the Czechs would simply be to drive them into the arms of the West. It is already clear that Czechoslovakia's natural trading partner is West Germany, and she is thinking of applying for readmission to the International Monetary Fund with a view to securing grants and loans.
The thaw in Eastern Europe comes at a time when scarcities are ending and popular demand is all for a wider consumer choice. Incentives and the profit motive are spreading, together with freer internal prices. It is farcical to try to go on making this fit into controlled systems where trading is arranged by Governments and politically appointed managers lacking the know-how.