Foreign trade of Communist Czechoslovakia

History Politics Economy Industry Agriculture Foreign trade Transport Education Demographics Government structure Health and social welfare Mass media Resource base Religion Society Foreign trade played an important role in the national economy of Communist Czechoslovakia as opposed to the economic system of the Soviet Union.

The adjustment raised the price of fuels and raw materials (primarily Czechoslovak imports) much more than it did manufactured goods (the country's main export).

During the 1970s, Czechoslovakia, like other countries of Eastern Europe, turned to West European credit sources to obtain financial help for imports as well as longer-term investments in modern technology.

Czechoslovak officials had been much more prudent in building up a foreign currency debt than had several other East European nations, however, and the country's credit standing remained good.

When Western banks tightened credit to Eastern Europe in 1982 (largely in reaction to Polish insolvency), Czechoslovakia redoubled its efforts to curb imports and pay off its debt.

Within Comecon, in keeping with the plan for regional specialization set forth in the Comprehensive Program of 1971, Czechoslovakia concentrated on production of machine tools and electric railroad locomotives; the traditionally strong Czechoslovak armaments industry also remained important.

The government budget then made adjustments to compensate for any unwanted gains and losses caused by varying foreign and domestic prices.

An important characteristic of the Soviet model that was imposed on Czechoslovakia in 1948 was the attempt to insulate the domestic economy and minimize the impact of world economic trends.

The system accomplished this in part by severely restricting foreign currency transactions and confining them to official channels at fixed and favorable exchange rates.

Within a few years, the exchange rate had lost its historical basis and no longer bore any direct relationship to purchasing power in other currencies.

According to official statistics, five countries accounted for 71.7% of all foreign trade in 1985: The Soviet Union exerted a powerful influence over the Czechoslovak economy.

Other East European Comecon countries, such as Bulgaria, Romania and Hungary, were also of considerable importance (seventh and ninth in rank, respectively).

Czechoslovak exports to these countries in 1985, according to official data, consisted mainly of machinery and transport equipment, chemical products, and (especially to Hungary) coal and briquettes.

Engineering products, which accounted for more than 50% of all Czechoslovak exports, had a share of only 10 to 11% in noncommunist trade, owing to very strong and successful West European competition.

With regard to imports from noncommunist countries, Czechoslovakia in 1986 was especially interested in the high technology offered by Western Europe and Japan (twenty-fifth in rank).