The Day After Russia Attacks
What War in Ukraine Would Look Like—and How America Should Respond
Heretofore, Western observers of economic reform in the Soviet Union and Eastern Europe have concentrated almost exclusively on internal changes. Most of us have been fascinated by the provocative debate and by the subsequent decision of the East European governments to emphasize such concepts as profit, interest, rent and managerial autonomy and to deëmphasize centralized planning. This concentration on internal economic reforms has tended to divert attention from the equally significant changes that the East Europeans have introduced into their international economic structure.
The lack of discussion in the West about the reforms in Eastern Europe's foreign trade may be attributed to several factors. First, there has been no counterpart to the wide-ranging Liberman-type debates over internal reforms which would have drawn Western attention to the changes in the external economic activities of the communist countries. Second, because foreign trade has always entailed interaction with large numbers of non- communist traders, it has generally been assumed that some adaptation of non-communist methods was only to be expected.
Recently, however, the East Europeans have gone beyond mere adaptation. Apparently without debate or momentous pronouncements by senior officials, fundamental changes have been made in the way the East Europeans have been doing business with the West. To some extent the need for rationalization in the foreign trade sector has been necessitated by the desire to implement internal economic reforms. The East Europeans have come to recognize that they will need foreign machinery and technology to bring their productive efficiency up to world standards. For this they need foreign exchange. But the East Europeans have moved beyond the simple idea that exports are needed only to finance imports. They have also come to realize that they have forfeited valuable profit-making situations to capitalist businessmen.
Initially the communist leaders may have assumed that their rejection of autarchy and pursuit of trading sophistication would not entail major structural reforms in trade institutions and policies. But in what appears to be a counterpart of the domestic reform movement, many of the external changes constitute a radical departure from past practices. Whether the innovations were first introduced by the communists or by Western traders, it is fair to say that the external economic innovations that are taking place in the foreign trade practices of the communist countries are as significant as the internal economic changes.
Traditionally, trade among members of COMECON (Council of Mutual Economic Assistance) has been bilateral and on a barter basis. Fostered by the Russians, barter has also been the prime method of conducting trade between Eastern Europe and the developing countries and even with several developed countries. Moving beyond simple barter, in which one batch of goods is offered in exchange for another, prices are attached to the goods being exchanged so that bilateral clearing arrangements can be created. In this way each side can trade a more varied collection of goods, with the provision that each side should try to purchase approximately the same amount so that by the year's end neither will owe anything to the other. In principle, this should assure a balance, but in fact there are often imbalances when one side is unable to find anything worth buying.
Despite the superficial simplicity of bilateral trade, the members of COMECON have had severe criticisms of the system. The non-Russian members have bitterly complained about the unsuitability of the goods they have received in exchange, the uncompetitive prices they have had to pay and the unspendable credits they have accumulated which they have had no way of utilizing. Over the years, this has become the source of considerable friction. Many countries have felt they were not obtaining a full measure of value for the products they were producing and selling, especially in their trade with the U.S.S.R. For example, among the Czech grievances during their abortive renaissance of 1968 was the complaint that they had accumulated claims against the Soviets of about 10 billion crowns, or $1.4 billion, which they could find no satisfactory way to spend.
Even the Russians have come to have misgivings about bilateral trade and barter. In the years 1958-65, the Soviet Government accumulated from barter deals a surplus equivalent to $891 million, which they could not spend. Because of such problems Russian critics have acknowledged that after a point bilateral clearing, instead of causing an expansion, may lead to a curtailment of trade. There is likely to be a holding back when one of the partners decides to demand the settlement of unbalanced clearing accounts in gold or hard currency or when a debtor seeks an extension of his debt which in effect then becomes a form of "technical credit."
Even though members of COMECON and the developing countries have become increasingly reluctant to involve themselves in bilateral and trilateral clearing arrangements, Western businessmen have sometimes not been so hesitant. Many of them take a chance in order to make a good though risky profit through such transactions. Consequently it has not been only the East Europeans and developing nations that have found themselves with claims that could not be utilized. Increasingly, various Western businessmen have found that they were being pressured to take either specific East European goods or soft-currency credits as part payment for their sales. These credits had been received in payment by the governments of Eastern Europe in exchange for sales made to the developing countries or other communist countries. In their eagerness to sell to the communist countries, Western firms have sometimes agreed to accept such payment in kind or in soft currencies because they thought they could resell these goods or credits at a discount in Western markets for hard currency. To compensate for the discount, Western firms generally have tried to mark up the prices of their own products, hoping in this way to provide themselves with a margin of safety. Occasionally even this has not been enough protection. One of the reasons why Krupp hovered on the verge of bankruptcy was that it had overextended itself in Eastern Europe and could not convert its repayments into hard currency at high enough prices.
The fact that different state trading organizations in Eastern Europe and private organizations in Western Europe often had claims on goods that they had no particular use for created an opportunity for alert businessmen and arbitragers. Clearly there was a need for someone who was willing to swap these goods and currencies for goods and currencies that might be more useful. Technically this is called "switching" and has become a multi- million dollar operation. Depending on the goods and countries involved, switching can be a complicated process. For example, a new accounting unit has come into existence as a part of the switching process. It is called the "clearing dollar." The clearing dollar is not convertible and is really just a transferable claim on goods in a particular country. (In a sense it is only appropriate that COMECON should be associated with this latest variation of the dollar since it was the Russians who helped give birth to the Eurodollar.) A typical switch transaction, as described in Business Europe (December 14, 1966), works as follows:
A Belgian company offered to sell compressors to an agency of the Hungarian Ministry of Foreign Trade. In exchange, it was presented payment in clearing dollars drawn on Morocco. The Belgian firm then went to a "switch dealer" who offered the Belgians 90 hard dollars for 100 clearing dollars. The switch dealer knew of a fish importer in Hamburg who wanted to buy Moroccan sardines and was delighted to be able to buy 100 clearing dollars good in Morocco at the bargain price of 91 hard dollars, which included one dollar for commission. As a result of this switch operation, the Hamburg importer was able to buy his sardines at a lower price, the Belgian obtained his hard dollars, and the switch dealer received a commission. However, the Belgian exporter obviously had to be careful and sell his compressors to Hungary at a price that was about 10 percent higher than he normally would charge when payment was in hard currency. Even with higher prices this system facilitates the flow of trade, especially if bilateral clearing is the only other alternative.
Most of the COMECON countries encourage switching because, among other things, it permits them to convert their soft currency claims on the developing countries into hard currency. The developing countries, however, frequently complain when the communist countries resell their produce in Western markets for hard currency. The communist country ends up in a better trading position than the original producer. But the game can be played for profit by the developing countries as well. There are reports that countries like India have also started to convert their clearing dollars redeemable in Eastern Europe into hard dollars and Western goods instead of communist goods.
Those with long memories may recall that barter and switching were also important in Western Europe in the years immediately following World War II. The currency situation then was similar to that in Eastern Europe today. Barter, bilateral trade and switching are natural by-products when currencies are not convertible and countries want to engage in and expand their foreign trade. Switching is a logical prelude to convertibility as in fact it turned out to be in Western Europe. Accepting a discount in the exchange rate of an East European currency is equivalent to a de facto devaluation.
As might be expected, because switching is such a complex operation, it is not a game for dabblers. On occasion, one member of COMECON may even end up competing against another member. For instance, one Boston chemical exporter reports that several times he has found himself buying chemicals from the Soviet Union and then reselling them directly to East Germany. Obviously Soviet trading agencies could have done this by themselves. Then why did the Russians permit an American to come in when they knew their goods were being bought and sent directly to their communist allies? As explained by the American exporter, once the Russians had met the terms of their bilateral trade agreement with East Germany for the delivery of chemical products, they still had some left over. If at all possible they wanted to sell these chemicals for hard currency. Although members of COMECON use only soft currency in their trade with one another, the American exporter knew that the East Germans were willing to pay hard currency because they were in urgent need of more of the chemical. Thus the American was able to sell to a communist country for dollars what he had bought from a communist country with dollars. Marxist purists would probably frown at the unorthodox nature of such transactions. But to the increasingly pragmatic traders in the Soviet Union, the important question is: Were the goods sold and did the Russians make a profit in dollars in the process?
There are other equally unexpected twists in the negotiations that take place between businessmen in the West and government officials in the East. For example, the Intercontinental Hotel Corporation wanted to build and operate a modern tourist hotel in Budapest. After considerable difficulty, Tower International, an American commission firm, entered the negotiations and managed to obtain an agreement from the Hungarian Planning Commission that the hotel would be included in the early years of the current five- year plan. There was one condition: the hotel construction would have to be financed with hard currency. With the commitment from the Planning Commission, Tower International then went to the Foreign Trade Bank of Hungary, which agreed that if the hotel were built, minimum yearly repayments in hard currency would be turned over to the builders. Armed with the Hungarian bank's guarantee, the American firm then was able to approach foreign bankers about the financing. And where did they turn? They went to the Moscow Narodny Bank Ltd., in London, a Soviet-owned bank. There they had no trouble in obtaining a $6 million credit in hard dollars.
Financing an American firm so that it can build a hotel in Budapest is one of the more spectacular illustrations of the increasing sophistication of the communist countries in international trade and finance. This responsiveness is especially apparent in the increasingly close working relationships that are being established between communist and capitalist enterprises. Although it would have been unthinkable a decade ago, communist countries are encouraging mutual producing and merchandising arrangements between communist and capitalist firms.
These coöperative ventures take many forms. In some instances, foreign firms have been permitted to retain their managerial authority and on occasion they have been allowed to retain some degree of ownership. In the more restrictive variation of such an arrangement, the foreign partner is usually entitled to a certain portion of the production effort payable in the products produced. In the more permissive arrangement, which is becoming common in some areas of Eastern Europe, markets are divided up and profits are then retained by the respective sellers.
Some of the joint operations are quite imaginative. As of early 1968, there were over 120 such agreements between firms in Eastern Europe and firms in the West, involving varying degrees of participation and sophistication. Virtually all the members of COMECON except the U.S.S.R. have been involved in some way, and even the Russians are now indicating considerable interest in the possibilities of such arrangements. In fact the best article on the whole phenomenon is by a Russian, I. D. Ivanov, who ends his discussion by suggesting that "technical coöperation with the technically advanced firms of capitalist countries may be a useful tool in [Soviet] industrial branches."[i]
The simplest type of arrangement is illustrated by a West German firm that sends a large consignment of fabrics to be sewn in a factory in Poland. The German firm provides the models and machinery and then markets the goods in the West under its own label. A slightly more complex arrangement brings together a Western and Eastern firm at a more advanced level in the production cycle. The Eastern firm becomes a permanent sub-supplier for the contractor in the West. The finished product may then be sold by the Eastern firm in Eastern markets and by the prime contractor outside of Eastern Europe. For example, a Polish furniture firm supplies semi-finished furniture to the Swedish firm IKEA, which then finishes and sells it throughout Europe. Similarly, Spilling-Werke of West Germany provides the boilers and Gants of Hungary manufactures the generators in jointly produced electric generating stations. Italjet of Italy has concluded an arrangement with Motokov in Czechoslovakia for the joint production of motorcycles; the Italians produce the frames and the Czechs manufacture the motors. English and Czechs have been jointly producing machinery for the manufacture of synthetic fabrics; West Germans and Hungarians are together producing boring machines and lathes. There is also an arrangement whereby tape recorders are to be produced by Universal in Poland for use by Grundig of West Germany. The Hans Beimler Locomotive and Electrotechnical Works in East Berlin coöperates with a French manufacturer who supplies diesel engines for some of its locomotives. Among the large Western firms involved in such arrangements are Renault, Saab, Babcock and Wilcox, and Bull-GE of France. Even American firms are participating. Simmons Machine Tools of Albany sells machinery in the United States produced by the Skoda Works of Czechoslovakia, with the trademark Simmons-Skoda. Coca-Cola is now being bottled in Hungary, Jugoslavia and Bulgaria, and Pepsi in Rumania and Jugoslavia.
The advantage of such arrangements for the Western firm is that it is able to utilize the cheap labor supplies of Eastern Europe and to penetrate communist markets. Simultaneously the communist firm benefits from an infusion of orders, new technology, advanced marketing techniques and hard currency.
The next stage of East-West interaction comes when a capitalist and a communist firm form a consortium to bid for construction work in third countries. Frequently the relationship is one where the two parties stand as independent commercial associates rather than as contractor and subcontractor. For instance, the Austrian firm of Simmering-Grats-Pauker joined with Komplex, a Hungarian enterprise, to build electric power plants in Lebanon and India; the Hungarian firm supplied the turbogenerators. Simmering again joined with a Polish firm for a plant in Greece and with a Jugoslav enterprise for construction in India and Egypt. Rumania has joined with France and India to build a 2.5 million ton oil refinery in Haldia in West Bengal. There are numerous other examples including one where the Swiss firm of Brown-Boveri used Hungarian components for electrical equipment sold to the United States.
Some of the East European countries have also entered into corporate relationships with producers in less developed areas. Czech firms are working in India with Indian firms to produce electrical equipment and machine tools. Poland and Egypt have discussed the joint production of ships in the U.A.R. Jugoslavia is licensing and coöperating with an Indian company in the production of tractors. The Hungarians have set up a corporation to produce light bulbs in Ceylon, and even Bulgaria is jointly producing medicine in India, artificial leather in Singapore and assembling motor scooters in Morocco. The formation of these joint ventures has not always been widely applauded. Thus Syria and Algeria have resisted such companies whether they produce or only sell. Apparently they regard this sort of transaction as a form of financial imperialism, notwithstanding the fact that the prime owners may be communists.
Once the East Europeans have come to accept the basic principle of joint participation with non-communist partners, there seems to be little reason why they should limit themselves to operating in the communist and the developing countries. Several East European concerns have consequently united with Western enterprises to create joint stock companies which have been incorporated in Western Europe. Thus a Jugoslav firm and an Italian company have formed an affiliate to design, sell and service equipment for the petroleum industry. Similarly, the Bulgarian concern, Machinoexport, is working with the Dutch to sell, service and assemble lift trucks, and with the Italians has formed a trading corporation in Switzerland; it will sell grinding machines that have been built jointly in Bulgaria and Italy. Even the East Germans are investing beyond their borders; they have contributed 49 percent of the capital for a new titanium dioxide factory to be built in Jugoslavia.
The ideological and political implications of these tendencies have obviously been disturbing to some in Eastern Europe. One of the Soviet complaints against Czechoslovakia which was seconded by the Poles was that the Czechs were turning too much to the West for their economic guidance. As we have seen, however, this tendency is not limited to the Czechs, and in their admirable fashion the Czechs did not hesitate to point this out. In Hospodarske Noviny (October 1968) five Czech economists at the Czech Foreign Trade Research Institute drew attention to the fact that Poland and Hungary have joint production agreements with West German concerns that are greater in scope than those entered into by Czechoslovakia. They went on to note that the Bulgarians, Poles and Russians have signed major licensing and production agreements with Italian (Fiat) and French (Renault) automobile manufacturers, thereby ignoring the East German and Czech auto industries which presumably could have rendered much of the financial and manufacturing assistance that was being sought.
The Russians, too, have indicated they will not be restrained by COMECON borders, and some of their new arrangements are even more far-reaching in their implications than those already described.
Without any centrally directed or premeditated strategy, so far as can be seen, and without stopping to worry about the ideological implications of what they are doing, the Soviets are forming international corporations comparable to those in the West. They buy, service and even produce goods in foreign countries with the intention of selling or servicing the same or processed products in still other countries through overseas subsidiaries. Products from the mother country are sold wherever possible, but in many instances the only time the home country becomes involved is when it is necessary to send out managerial personnel or to send home profits.
One of the purest illustrations of this type of organization is the Soviet foreign banking network, structured very much on the lines of international finance capitalism. The Russians have formed a network of wholly owned banks spread across Europe. The largest and most important of these is the Moscow Narodny Bank Ltd. in London, which has resources of more than $700 million. This was the bank that financed the construction of the Hungarian hotel, and it also acted as agent in the massive Soviet gold sales in 1963 and 1965. Although the London Narodny Bank was actually formed shortly after the revolution, more recently its scope of operations has increased both in and outside the country and it has recently opened a branch in Beirut. It has plans to open additional branches in Frankfurt and Vienna. A related bank, Woschod Handelsbank, has been opened in Zurich, while the Russian-Iranian Bank operates in Tehran. Another Russian-owned bank, Banque de l'Europe du Nord, has existed for many years in Paris. Efforts to open a branch in Tokyo may succeed provided the Japanese are permitted to open a bank of their own in Moscow.
Similarly, in their quest for increased sales and profits the Russians have not let themselves be disturbed by the implications of running trading and manufacturing concerns overseas. They have established several trading corporations in the developing countries and Western Europe, with ownership usually shared with local firms. In March 1967, the Ethso Trading Company Ltd. was established in Ethiopia with the Russian agency Engermasheksport holding 51 percent of the stock. About the same time, the Russians through their automobile-exporting organization, Avtoeksport, took over an 80 percent interest in a Nigerian company called Vaateko. A few months earlier, the Soviet machinery-exporting organization, Machinoexport, joined with Tissage-Bedamo of Morocco to set up the Marimexport Company. All of these African companies were to import and service Soviet equipment and export other goods. The Russians have also jointly launched a shipping line with the Egyptians and have offered to build a tractor-assembly plant in Syria which would be largely Soviet operated.
The Russians have established similarly inspired arrangements in the more developed countries of the world. For example, in Britain a joint wholesale and service firm called Technical and Optical Equipment has been established with an English manager. Another jointly owned company, the Anglo-Russian Plant Hire Company, is trying to sell Soviet trucks in the United Kingdom. The sale and promotion of automotive equipment in Western Europe is obviously of great importance to the Russians, particularly because it can lead to all kinds of other attractive ventures for them. Notwithstanding the fact that the Russians had to turn to the Italian and French automobile manufacturers to improve the production of their own cars, they have set up joint stock companies in France with French partners to service and sell Soviet automotive equipment in France (AKTIF-Auto); they have made similar arrangements with some Norwegians (Konela-Norge- Bell), Swedes (Matreco) and Finns (Konela). The most ambitious undertaking is the Belgian joint stock company, Scaldia-Volga, which not only sells and services Soviet cars, but assembles them in Brussels. It hopes to open a sales branch in Switzerland. The Russians also have a half interest in La Maison de Russie, the Russian-type department store in Brussels. In the United States they have licensed the Hippenstall Company of Pittsburgh to distribute a Soviet-developed process for a fluid sand foundry, with the Russians sharing in the royalties. Recently, the Russians agreed to convert Intourist's auto rental service into a Hertz franchise.
Soviet efforts in the oil industry illustrate even more vividly the direction in which Russian international corporations are heading. Oil exports have always been important to the Soviet Union. Even though its oil is relatively high in sulfur content, oil is a highly negotiable commodity and the Russian pricing system, which until recently ignored land and depletion costs, made it possible for the Russians to sell their oil at a low price. Because it is so essential and enters so easily into foreign trade, oil has been an excellent source of hard and political currency for the Russians. Heretofore they have been reasonably content to sell Soviet oil to foreign dealers and let them distribute it. Now there seems to be a more pragmatic attitude. The Russians are beginning to sell not only their own oil, but oil and natural gas that are initially purchased in other countries. This is partly because they are beginning to consume more of their own petroleum production; it is also because the Russians realize that there are profits to be made as middlemen. Furthermore, they are not only selling to foreign distributors, but they are beginning to refine and distribute it themselves through their own network of foreign refineries and filling stations.
The prototype of all Russian international corporations is Nafta, the oil company founded in December 1967. The Russians took 60 percent of the company's stock and their partners, two Belgian coal companies, subscribed for the remaining 40 percent. One of the first things the corporation did was to acquire a 60-acre tract in Antwerp where the owners intend to build a tank farm and ultimately a refinery. Nafta hopes to import up to 500,000 tons of crude oil and 750,000 tons of refined oil a year. The Russians have publicly declared that they have no intention of limiting themselves to Belgium, but intend to expand their sales throughout the Common Market. The Russians also are the sole owners of a British oil importing and distributing company, Nafta Ltd., which hopes to open 100 gas stations in the British Isles. This is not a one-way street, however, for Western firms such as Shell Oil and ENI have opened up filling stations in Hungary and Czechoslovakia.
The Russians are presently buying natural gas from Iran and they are building a pipeline to Afghanistan. They have just been granted extensive drilling concessions in Iraq and they are also prospecting in Iran and Egypt. They hope to do the same in Algeria, Syria and Kuwait. Recognizing that the Russians have indeed become international oil traders, Western firms have become more willing to coöperate with them. Because of the disruption caused by the closing of the Suez Canal, some Western firms have agreed to swap customers and sources of supply with Russian oil exporting agencies. For example, a Swiss firm gave the Russians 3.5 million tons of Middle East oil for delivery to Soviet customers in Japan and Burma. In exchange the Russians gave the Swiss an equivalent amount of oil from the Black Sea, which the Swiss firm then sold to a French company. British Petroleum did much the same thing.
The Russians are also beginning to move into the fields of international transportation and insurance. Like the Scandinavian countries, the Soviets are now seeking to carry ocean shipping which neither originates in nor is intended for the U.S.S.R. The Soviet shipping agency, Sovracht, is making a determined effort to capture up to 25 percent of the traffic between Australia and Europe, and to do this it initially offered rate concessions of as much as 25 percent. The Russians are also competing for the international insurance business, although there is less evidence that they are cutting insurance rates. Inostrakh, the Soviet international insurance company, has established branches in Iran and Rumania. The Russian affiliate in England and Germany is the Black Sea and Baltic General Insurance Company. In the by now familiar pattern, a joint stock company has been formed with Austrian partners in Vienna called the Garant Insurance Company which, though primarily concerned with insuring East-West trade, is also seeking regular Western insurance and reinsurance.
These actions by the Soviet Union and the other members of COMECON signal a new approach to international commerce, finance and production. From a practical point of view, this is a natural direction to move in, since there are hard-currency profits to be made. Indeed, profit plus the desire to use foreign trade to implement internal economic reforms seem to be the stimuli behind the expansion into these new realms of international commerce. But unlike the internal reforms, which have been thoroughly debated and then acted upon, these external innovations seem to lack overall guidance and direction.
Little thought has been given to the ramifications of these new economic activities. One result of the increased participation in international commerce is an increase in tension within COMECON itself. Each country can see the advantage for itself in such moves toward the West and in Western modes of operation, but it cannot always see the wisdom of similar tendencies on the part of its allies. This is especially true of the U.S.S.R., which is particularly jealous of any COMECON member which appears to be moving too far and fast toward international economic involvement. It is not surprising, therefore, that Russian disapproval of Czechoslovakia's participation has not entailed a cutback of the Soviet Union's own efforts in this direction.
There are good reasons why the Russians have not lessened their outward probings. To be successful in international commerce, a nation must have ready access to products, producers and competitors in the outside market. Therefore, against their will, the East Europeans will find they must expose themselves more and more to the West and Japan. This will mean opening offices and information to foreign salesmen. Most of the East European countries have allowed Western salesmen to have permanent sales and buying offices in their capital cities for some time; now even the Russians are giving in. In the summer of 1968, the Japanese had at least 24 permanent sales offices in Moscow; and there were French, Italian and English firms as well. Ultimately, if the Russians are to increase their sales and profits, foreign businessmen will not only have to be given greater access to officials and products inside the country, but Russian salesmen will have to be given greater access to markets and products outside their country as well. Conceivably this could have not only an economic but also a political impact.
As has been suggested, increased participation in international markets will almost certainly increase the possibilities for the success of internal economic reforms. Increased trade has already made possible the importation of more up-to-date machinery. But the interplay of external and internal reform is a two-way street. More involvement in foreign trade not only makes it possible to increase the efficiency of domestic production, it also necessitates it. If the Russians plan to increase their exports, their internal economic reforms must bear fruit so that Russian equipment can be produced more efficiently. This means increased innovation and increased productivity.
These developments may lead to increased pressure for convertibility of the ruble. Several economists in countries such as Poland, Czechoslovakia and Hungary, whose economies rely much more heavily on foreign trade, have already called for convertibility. Presently Soviet foreign trade is a much smaller proportion of gross national product than is the case for the East European countries and therefore the Russians are not as dependent on flexible and responsive foreign trade procedures. Yet we have seen that the Russians are gradually moving in the same direction as the more outspoken members of COMECON and, if present trends continue, the Russians themselves may come around to the same conclusions.
These developments will undoubtedly create new opportunities and new competition for many Western and Japanese firms. But the problems and accommodations may be more difficult for the communist countries. This was illustrated by a Jugoslav legal counselor as he outlined the hazards of investing and operating overseas to a group of enterprise directors. After discussing such pitfalls as foreign tax laws, labor regulations and restrictions on the transfer of profits and capital, he felt it also necessary to warn against one additional danger. Remember, he cautioned, some countries periodically "nationalize or expropriate private property located on their territory." Certainly this must be a novel hazard for East European entrepreneurs to contemplate.
[i] I. D. Ivanov, "Agreements on Technological Cooperation in Socialist Countries of Eastern Europe," Voprosy Izobretatel'stva, February 1968, p. 43. Translated in Joint Publications Research Service, Series USSR International Economic Relations, April 22, 1968, No. 32, p. 42. See also Emile Benoit, "East-West Business Cooperation: A New Approach to Communist Europe," The New Republic, February 18, 1967, p. 21.