Calculating the Burden of Empire: Soviet Oil, East–West Trade, and the End of the Socialist Bloc

Abstract

The aim of this chapter is to add a new view on Soviet trade relations with its allies. It analyses Cold War politics as a factor restraining Soviet actions vis-à-vis its allies. Particular emphasis is put on the Soviet intra-bloc mechanisms and the role of the Council of Mutual Economic Aid (CMEA) in managing the relations. In order to show how Soviet–East European relations played out, this chapter elaborates internal CMEA discussions on economic dependency, intra-bloc cooperation, and changing the CMEA mechanism to better suit Soviet purposes. It is argued that even though the Soviet Union was the only major energy exporter in the CMEA, energy was not an easy weapon to be used for exploiting or controlling the allies. A decision to change the price system had to be made on the multilateral CMEA forum. And it had to be implemented in a way that would not leave the allies in economic difficulty. Soviet oil and gas financed the economic system of the Socialist bloc. However, it also fueled the pattern of interdependency in both East–East and East–West trade.

Everyone knows that it is more expedient to export machinery and equipment than raw materials. And furthermore, we export our raw materials without any refinement, that is, the cheapest kind of products. We lose a lot from this. ¹

CPSU General Secretary Leonid Brezhnev, April 1973