59

Formation of People’s Democracies

p The liberation struggle against nazi Germany which spread in wartime within countries that fell under the nazi heel was directed not only against the invaders but also against the reactionary regimes which had brought national disaster, loss of independence and immeasurable suffering and destruction.

p The westward liberation campaign of the Soviet Army enabled all the democratic patriotic forces to unite in the struggle against the local and foreign exploiters, for the overthrow of the bourgeois-landowner regime and development towards People’s Democracies.

p The destinies of West European countries occupied by the American and British forces were shaped differently. The ruling circles of the Western powers gave every help to the local reactionary bourgeoisie in suppressing the workingclass and revolutionary movement in Western Europe and in preserving the capitalist system. Exploiting the considerable economic and political weakening of the West European countries, the 60 United States undertook to establish its diktat immediately after the war.

p In Eastern Europe, too, the US and British ruling circles did everything to prevent the historically natural development of events, to block the road to popular revolutionary change. To this end all the weapons in imperialism’s arsenal were utilised—from diplomatic pressure, blackmail and intimidation of the young People’s Democracies, to attempts at directly interfering in their internal affairs. Even during the war the US and British ruling element began to prepare the ground for the subsequent subjugation of Central and Southeast Europe, and established contacts with emissaries of bourgeois parties in Bulgaria, Hungary and Rumania, setting them the task of capturing power and converting their countries into an obedient tool of Western policy. US and British representatives conducted negotiations in Cairo with Barbu Stirbey, a leader of the so-called historical parties of Rumania, reached understanding in the Vatican with Hungarian ex-Premier Miklos Kallay and in Ankara with Gemeto, a reactionary Bulgarian politician.

p But the imperialist forces were unable to alter the course of events in Central and Southeast Europe and to embroil the peoples in cruel civil wars primarily because these peoples were liberated by the Soviet Army. At the 5th Congress of the Bulgarian Workers’ (Communist) Party in 1948, G. M. Dimitrov stressed that if the offensive of internal and international reaction in Bulgaria during the first years of popular democratic rule did not assume the form of open armed action, this was explained not only by the determined measures of the people’s government, the vigilance 61 and the energy of the Bulgarian Communist Party, but in "a large degree by the presence ot units of the Soviet liberation army, whose mere presence simply fettered the reactionary forces".  [61•1 

p The influence of the bourgeoisie in economic and political life was still substantial during the early stage of popular democratic revolutions in Central and Southeast Europe. The bourgeoisie held strong positions in the economy and played quite a considerable part in political life. The reactionary and the democratic forces clashed bitterly on all important issues of home and foreign policy. The reactionaries exerted much effort to foil fundamental economic and political reforms and to restore the old order. Bourgeois political parties sabotaged democratic measures applied by the working class with the Communist Parties at its head, and hampered the establishment and strengthening of truly democratic state institutions.

p Bourgeois political parties relied on the support of the Western powers whose representatives tried to meddle in the internal affairs of Eastern Europe and to aggravate the political situation. They repeatedly sought to utilise for their selfish ends the Allied Control Commissions. On October 1, 1946, US representative Major General V. M. Robertson, for example, demanded of Soviet Colonel General Biryuzov, Vice-Chairman of the Allied Control Commission in Bulgaria, "to convene a special meeting of the Commission to examine what measures it could take to ensure free 62 elections to the Bulgarian Grand National Assembly on October 27”, including such questions as “ freedom” of the press, radio and assembly for the opposition, the release of political prisoners, and so on.  [62•1  In other words the American representative wanted to use the Allied Control Commission for flagrant interference in Bulgaria’s internal politics.

p In his letter of reply of October 4, the Soviet representative stated that "the ensuring of free elections is a prerogative of the Bulgarian Government which has done everything necessary in this respect.... Consequently a discussion of the questions you raised in the Allied Control Commission, and, the more so, the adoption of any measures by it would be a violation of these prerogatives and crass interference in Bulgaria’s internal affairs. Furthermore, the Allied Control Commission cannot discuss these questions because they do not come within its competence, as determined by the armistice agreement with Bulgaria.”  [62•2 

p As the national and democratic revolutions developed the working class and its vanguard won new positions in the course of bitter class struggle, strengthening and developing popular rule. Though the struggle was acute in every country it did not turn into open civil war. The Soviet Union’s defence of the interests of the People’s Democracies scotched such attempts by the Western powers. The victory of the working class which headed all national and patriotic 63 forces was in fact scored in relatively peaceful conditions.

p The struggle of the patriotic forces for winning and consolidating popular rule had much in common in various countries. In all People’s Democracies, the working class, closely allied with the peasants, was the leading force of the revolution. This was the decisive factor which ensured complete victory over the bourgeoisie and the establishment of the dictatorship of the proletariat. At the same time, the revolutionary process in each country of Central and Southeast Europe had its distinctive features depending on the actual situation, the maturity of the revolutionary situation and the power of resistance offered by the bourgeoisie.

p Let us take Czechoslovakia as an example. The bourgeoisie was able to retain in the first postwar years more ground in economic and political life than it did in neighbouring People’s Democracies. Moreover, it had much experience and an elaborate system of combating the revolutionary working-class movement. The working class and the Communist Party thus faced a cunning and perfidious enemy—the Czechoslovak bourgeoisie with its political parties, which was highly skilled in playing at democracy and relied on the support of international imperialism, above all the US ruling circles. Imperialist reaction staked on the Czech and Slovak capitalists headed by Benes, who was then President of Czechoslovakia. Benes at one time stated that he was "afraid of two things only, a war and then Bolshevism".  [63•1  The 64 United States expected to utilise Benes and others of like mind for keeping Czechoslovakia within the capitalist system and for blocking the further development of people’s democratic revolutions in other countries.

p But the working people of Czechoslovakia led by their Communist Party scored a splendid victory over the reactionary and counter- revolutionary forces in the decisive clash in February 1948. The popular victory resulted in the establishment of undivided proletarian dictatorship.

p No less keen was the class struggle in the People’s Democracies over foreign policy issues, above all the basic question of relations with the Soviet Union. Internal reactionaries and international imperialists did everything possible to isolate the young People’s Democracies from the USSR, to deprive them of Soviet support and then crush the revolutionary movement. They sought in particular to control the Foreign Ministries. In Rumania up to the autumn of 1947 the Foreign Ministry was headed by Tatarescu, a bourgeois leader who said outright that though Rumania was bound to the Soviet Union geographically, long-standing traditions and sympathies bound her to the Western powers. Tatarescu converted the Foreign Ministry into a nest of the reactionary forces.

p Reactionary politicians fully realised that were it not for the energetic economic and political support of the Soviet Union, the bourgeoisie would still be able to stem the incipient process of revolutionary changes and to restore the capitalist system. That is why for the People’s Democracies the question of relations with the first socialist state in the world turned into a keystone 65 of their foreign policy from the very start. In this sphere, too, the people were victorious.

p This is how the working class during a sharp class struggle, in close co-operation with the peasants, and under the leadership of Communist and Workers’ Parties, successfully broke down the bitter resistance of the exploiting classes and their political parties. The fundamental revolutionary measures carried out by the working class strengthened popular rule and led to the establishment of firm proletarian dictatorship, the isolation and then the abolition of the exploiting classes and the ousting of their parties.

p In countries of Central and Southeast Europe a dictatorship of the proletariat was established not in the form of Soviets, as in the USSR, but in the form of People’s Democracy, which was a novel feature in the political organisation of society. It reflected the specific features of the development of the socialist revolution in conditions where imperialism was weakened and the balance of forces had changed in favour of socialism. It also reflected the historical and national distinctions of individual countries.

p The experience of socialist revolution in the USSR and the People’s Democracies corroborated Lenin’s proposition that the transition to socialism in various countries is not always effected in the same way. At the same time, it demonstrated that there are basic, cardinal laws governing this transition which are common for all countries.

p The victory of socialist revolutions in a number of European and Asian countries was ensured because the Communist and Workers’ Parties were consistently guided by Lenin’s ideas on the 66 general laws and national distinctions of the transition to socialism.

p The experience of victorious socialist revolutions in different countries marked by great diversity of local conditions, the experience accumulated over more than half a century, gives a more precise idea of these general laws and distinctions than was possible in the early period of the socialist system.

p To begin with, practical experience has confirmed the conclusion of the Marxist-Leninist doctrine that the leading role of the working class and its core, the Marxist-Leninist Party, in carrying out the proletarian revolution and establishing the dictatorship of the proletariat is one of the cardinal principles of the transition to socialism, which is of general significance and is preserved in any conditions.

p The proletariat carries through socialist revolution in close alliance with the non-proletarian working masses. But the proletariat is unable to lead these masses and score victory in the revolution if it does not create its revolutionary organisation, a Marxist-Leninist Party.

p The experience of the USSR and the People’s Democracies further shows that the exploiting classes do not cede power without desperate resistance. They disdain no method of struggle to regain political dominance and restore the bourgeois order. Moreover, the exploiting classes rely not only on their own forces, preserved initially after the socialist revolution, but also on the help of the entire world reaction.

p The working class must create a strong power, it has to establish its dictatorship in order to preserve and firmly consolidate the revolutionary 67 gains and to suppress any attempt to restore capitalism. This proposition, first theoretically deduced by the founders of scientific socialism and then confirmed by the experience of the working class of one country, namely, Russia, is now being corroborated by the experience of many socialist countries.

p Another general principle of the socialist revolution, likewise now confirmed by the record of a number of socialist revolutions, is that the tasks of proletarian dictatorship are not limited to crushing the resistance of the exploiting classes within a country. It is necessary to ensure the country’s independence from the encroachments of world reaction, to create favourable external conditions for the transition to socialism. After the October Revolution in Russia it was the dictatorship of the proletariat that enabled the young Soviet state to repulse the internal counterrevolution and the interventionist forces of 14 imperialist powers, to break down the economic blockade and to foil the attempts to strangle the socialist state. Following the directions of the CPSU, the Soviet people steadily applied the principles of proletarian dictatorship. This was a guarantee of foiling all the intrigues of socialism’s enemies. The dictatorship of the proletariat was the chief weapon which ensured the triumph of socialism in the USSR.

p The tasks of the socialist states in foreign policy which arose after the Second World War were greatly eased by the very existence of the Soviet Union. The resolute and consistent defence of the young People’s Democracies by the USSR enabled them to avoid civil war and open armed intervention by world imperialism. Drawing on Soviet 68 assistance, the People’s Democracies successfully coped with the difficulties in laying the foundations for a socialist economy.

p The experience of history thus fully confirmed Lenin’s idea that the transition from capitalism to communism cannot but provide a great abundance and diversity of political forms, but the essence is inevitably the same: dictatorship of the proletariat.

p The dictatorship of the proletariat has assumed different forms in different countries and in different historical conditions.

p The Paris Commune in 1871 was the first experiment in the dictatorship of the proletariat. Lenin pointed out that despite all its mistakes the Commune was the superb example of the greatest proletarian movement in the 19th century. The Commune was short-lived, but it was first to demonstrate that the revolutionary working class could guide society and create its own state. The revolutionary masses of Russia established the dictatorship of the proletariat in the form of Soviets. Soviets existed for a certain time in Hungary, Slovakia and Bavaria and for a number of years in some areas of China. After the Second World War the revolutionary endeavour of the masses in a number of European and Asian countries created another form of proletarian dictatorship, People’s Democracy.

p The experience of a number of countries has demonstrated the universal significance of the principle of transition to socialism, namely, that the proletarian .dictatorship derives its main strength from the alliance of the working class with the main mass of all other working people.

p The alliance of the working class with the 69 non-proletarian masses is the hub of revolutionary people’s power. Its utmost strengthening and extension guarantees the success of socialist changes and ensures the invincibility of the system born of the proletarian revolution. The close, unbreakable, fraternal alliance of the working class with all the other sections of the working people, above all with the peasants, expresses a prime distinction of the dictatorship of the proletariat—its true democracy. The dictatorship of the proletariat represents the highest form of democracy, democracy for all the working people. Whatever the form in which the transition from capitalism to socialism is effected, that transition can come about only through revolution. However varied the forms of a new, people’s state power in the period of socialist construction, their essence will be the same—dictatorship of the proletariat.

p Moreover, the principal laws governing the development of the socialist revolution and socialist construction, reaffirmed by the experience of all the socialist states, include: establishment of ownership of the major means of production by the whole people; socialist transformation of agriculture; planned, proportional development of the economy; socialist revolution in ideology and culture, the development of a body of intellectuals linked with the people; abolition of national oppression and the establishment of full equality and fraternal friendship among peoples; defence of socialist gains from external and internal enemies; proletarian internationalism; and consistent struggle for lasting peace.

p These laws are inextricably interconnected. To ignore, underestimate or renounce even one of 70 these general principles is to undermine the socialist system and endanger the revolutionary gains.

p At the same time, it would be wrong to think that since the principal laws governing the revolutionary transition from capitalism to socialism are the same and since the principal tasks of socialist changes in society coincide in the main, the forms and methods of achieving this aim are the same for all countries.

p In Russia, whose working people were the first in the world to blaze the trail to socialism, the dictatorship of the bourgeoisie was overthrown very quickly. The central agencies of bourgeois political power were destroyed by the armed uprising of the Petrograd proletariat and the revolutionary soldiers on November 7 and 8, 1917. A few days or weeks were needed for overthrowing the local bourgeois authorities. The situation was different in most of the People’s Democracies. There one of the distinctions of the socialist revolution was the gradual takeover of all power by the working people, the gradual development of the anti-fascist, antiimperialist revolution into socialist revolution. This process continued for a comparatively long time. During the first years of the existence of People’s Democracy the bourgeoisie preserved important positions in the economy and in politics. Representatives of bourgeois parties were in the parliaments, governments and local administrative bodies.

p By opposing progressive measures, the bourgeois parties and their representatives increasingly exposed themselves as a reactionary force. The working masses learned from their own 71 experience that the policy of these parties ran counter to their fundamental interests. This ultimately resulted in the complete political isolation of bourgeois parties, their ousting from state bodies and, subsequently, to their organisational disintegration.

p The distinctions of the socialist revolution in the People’s Democracies were also displayed in the setting up of mass political organisations which united all the democratic forces of a country, People’s Fronts led by the Communists. Rallying together in a People’s Front, the democratic forces defeated the internal reactionaries and destroyed the political positions of the exploiting classes. This created favourable conditions for the economic suppression of the exploiters, for nationalising industry and effecting socialist changes in the countryside.

p The existence of several political parties of the working people is a manifestation of the specific nature of socialist construction in some People’s Democracies. In addition to the United Workers’ Party there are the United Peasants’ and Democratic parties in Poland. The Christian Democratic Union, the National Democratic Party, the Liberal Democratic Party and the Democratic Peasants’ Party are participating, together with the Socialist Unity Party of Germany, in the building of socialism in the German Democratic Republic. In Czechoslovakia, the Communist Party is joined by the Czechoslovak Socialist Party, Czechoslovak People’s Party and the Slovak Reconstruction Party.

p All these parties are actively co-operating with the Marxist-Leninist Parties; they recognise their leading role in all social and political spheres 72 but, expressing the particular interests of certain groups of the working people who are building socialism, they have their representatives in central and local government bodies. The Communist and Workers’ Parties, in drawing up plans for socialist construction, consult the other parties, taking into account their opinions and wishes. Co-operation of a number of parties of the working people, spearheaded by the MarxistLeninist Party, is a form of the alliance of the working class, peasants, intellectuals and artisans.

p One more distinction of People’s Democracy should be mentioned. In Russia the proletariat, on winning power, had to disfranchise the bourgeoisie. In the People’s Democracies the bourgeoisie was not deprived of political rights ( except war criminals, quislings and other accomplices of the fascist regime). The bourgeois political parties for some time had their own press and their representatives in state bodies. What is important, however, is that they were deprived of the privileges they enjoyed under the old regime and were removed from key political and economic positions.

p There are also many original features in the methods of the socialist remaking of the economy in People’s Democracies. While the Soviet Union, being encircled by capitalist states, could not count on outside economic aid the People’s Democracies found themselves in a much more advantageous position. Immediately after liberation they were able to rely on the disinterested all-round support of the USSR. They could draw on the wealth of experience accumulated by the Soviet Union. They have solved, and are solving, problems of socialist construction in an 73 atmosphere of fraternal co-operation with the USSR and with each other, and in conditions when a powerful world socialist system exists.

p The problem of organising agricultural cooperatives has also been solved in a specific way in the People’s Democracies. In the USSR the land was nationalised, that is, taken over by the socialist state. The People’s Democracies did not nationalise the land. Only the property of traitors who had collaborated with the nazis was confiscated. A considerable part of the land was turned over to peasants who had little or no land at all. This determined certain distinctions in the forms of peasant co-operatives. In the People’s Democracies there are, for example, agricultural cooperatives in which the income is divided among members both according to their work and depending on the size of the plots given to the co-operative. In guiding the building of the new life, the Communist and Workers’ Parties always consider the national and historical distinctions of their countries. They act on the principle that blind copying of the experience of other fraternal countries, the application of methods of socialist construction suitable for the conditions of another country but hardly efficacious in the given country, lead to serious mistakes and distortions in building socialism. At the same time, however, exaggeration of the role of national distinctions also represents a serious threat to the socialist gains.

To avoid mistakes and distortions in socialist construction Marxist-Leninist Parties creatively apply the general principles of the socialist revolution and socialist construction depending on the actual historical conditions of each country, 74 firmly adhering to the demands of MarxismLeninism about the proper combination in politics of the principles of internationalism and patriotism. Only such an approach ensures the combining of the interests of each socialist country and of the entire socialist community and strengthens its unity.

Fundamental
Revolutionary Changes in the
Peoples Democracies
and Their Historical
Significance

p The period between 1947 and 1949 marked an important stage in the development of the Peoples Democracies and the transition of the people’s democratic revolution into socialist revolution. Fundamental revolutionary changes in the economy and political life brought about the victory of socialist production relations and strengthened popular rule. This above all was the nationalisation of large-scale industry, a major revolutionary measure which struck a hammer blow at the exploiting classes. It was carried out in Bulgaria in 1947; Rumania in mid-1948; Poland at the beginning of 1946; Czechoslovakia in two stages —in 1945 and 1948; Hungary from 1947 to 1949; the German Democratic Republic in 1949, and in Albania by the beginning of 1947.

p In the political sphere, bourgeois elements and Right-wing political parties were isolated and ousted, on the one hand, and the democratic forces were consolidated and reinforced, on the other. A tremendous part in this was played by the elimination of the split in the ranks of the working class, the merger of Workers’ Parties— Communist and Social-Democratic.

p The change in the political relationship of the class forces in favour of democracy is 75 demonstrated by data on the composition of governments during the first years of People’s Democracy. The government formed in Bulgaria on September 10, 1944 (the day after the overthrow of the fascist dictatorship) included only three representatives of the Communist Party; the other ministerial posts were given to the Zveno Party (4), Agricultural Union (4), Social- Democrats (2) and Radicals (1). In the cabinet formed in November 1946 the Communists received ten seats and ten seats were given to representatives of the Agricultural Union, Zveno, Social- Democrats and Independents (the monarchy was abolished as a result of the referendum held on September 8, 1946). The Fatherland Front Government, formed in December 1947, consisted of 14 Communists, 5 representatives of the Agricultural Union, 2 representatives of Zveno and 2 Social-Democrats.

p In Czechoslovakia only 4 Communists entered the coalition government set up on April 7, 1945. The other 16 members were representatives of other parties: Social-Democrats (3), National Socialists (3), Catholics (3), and non-party members (7). Edvard Benes who headed the country’s reactionary forces held the post of president up to February 1948. After the victory in February 1948, the alignment of political forces radically changed. A member of the Communist Party of Czechoslovakia became president and the National Front Government was formed of 12 Communists, 3 Social-Democrats, 3 representatives of the Slovak Reconstruction Party and 3 of the People’s Party.

p In Hungary in the initial period the pettybourgeois Smallholders Party (representing 76 mainly rich peasants) held important positions in the government. In the coalition cabinet, formed by four political parties in April 1947, this party held half the seats and the Communists only four.

p A keen political struggle developed in Poland after liberation. Reactionary bourgeois parties and above all the Peasant Party of Mikolajczyk, held important posts in the country’s leadership up to 1947.

p In Rumania where the monarchy existed up to the end of 1947, bourgeois parties had lost their positions in the government in the main by the beginning of 1948. The government formed in April 1948 consisted of 11 representatives of the Workers’ Party, four of the Agricultural Union, one of the National People’s Party and two non-party members.

p The economic, cultural and political rapprochement of the People’s Democracies and the Soviet Union was deepened and new, socialist international relations emerged and developed as these states progressed and, by carrying out fundamental revolutionary changes, strengthened the economic and political positions of socialism. A socialist community began to take shape in the course of struggle against internal and international reactionary forces.

p The People’s Democracies inherited a grave legacy. In the past most of them were economically backward agricultural appendages of big capitalist states and had no heavy industry. Prolonged domination of the foreign monopolies, fascist occupation and hostilities—all this resulted in their emerging from the war with a wrecked economy. Some of them had been brought to the 77 brink of economic catastrophe by fascism and their own bourgeoisie and landowners. In Rumania, for example, industrial output at the beginning of 1947 barely reached 48 per cent of the 1938 level. Industrial production in Bulgaria after the war amounted to 64 per cent of the prewar level, and agricultural production, about 70 per cent. The German invaders inflicted tremendous damage on the economy of Poland. War destruction and looting by the nazis reduced the country’s national wealth by 38 per cent, greatly undermined the productive forces and substantially depressed the living standard of the people even as compared with the low prewar level. The capacity of Hungary’s industry in 1945 was only 60 per cent of 1938, while industrial output amounted only to one-third of the 1938 level.

This situation demanded of the Communist and Workers’ Parties in the People’s Democracies the greatest exertion of effort for restoring their economies.

Soviet Economic Assistance to the People’s Democracies

p From the start the Peole’s Democracies relied on the all-round support and assistance of the Soviet Union in restoring and advancing their economies. Though the USSR itself faced tremendous difficulties after the war, it immediately after the liberation of the countries of Central and Southeast Europe began to render them extensive material aid in restoring their economies and readjusting to normal life.

p In the first years after liberation Soviet assistance played a major part in coping with postwar difficulties and in defending their economic, and, 78 consequently, also national independence from the encroachments of the imperialist powers.

p Thus, on February 20, 1945, the Soviet Government extended to Hungary, not yet fully liberated, credits to the sum of ten million pengos at the request of her Provisional Government; additional credits of 250 million pengos were given on March 7 and 500 million pengos on May 10, 1945. The USSR helped Hungary to carry out spring sowing and saved the people from starvation. In March, May and June 1945, the Soviet Government allotted from the stocks of the Soviet Army 33,000 tons of grain, 4,431 tons of meat, 3,333 tons of sugar and other foodstuffs for the population of large Hungarian cities.

p The first trade agreements and the consequent Soviet deliveries of raw materials, equipment and foodstuffs strikingly attest to the fraternal assistance of the USSR to the People’s Democracies in the initial period of their existence.

p The first trade agreement between the USSR and Bulgaria was signed as early as March 14, 1945. It recorded that both parties considered it the first stage in developing economic relations between their countries in the new conditions and that they would elaborate a programme of measures to promote fuller economic co-operation. On December 15 of the same year an agreement was signed on the delivery of 30,000 tons of maize and 20,000 tons of wheat to Bulgaria by the Soviet Government.

p The worsened food situation compelled the Bulgarian Government to ask the Soviet Union for additional grain deliveries. In reply to the request an additional 40,000 tons of maize and wheat were delivered within 4 months.

79

p Under the first agreements Bulgaria received from the Soviet Union considerable quantities of oil, metal, chemicals, rubber and grain. What is particularly important is that she received raw materials, about 10,000 tons of cotton and 2,000 tons of wool, for the textile industry, the leading sector at the time. This enabled the spinning mills to work at full capacity in two and three shifts and avoid unemployment.

p Another Bulgarian-Soviet trade agreement was signed in Moscow on April 27, 1946. It called for imports of Soviet goods 2.5 times greater than under the 1945 agreement. Between 1945 and 1947 Bulgaria received from the Soviet Union on the strength of these agreements 229,000 tons of oil products and lubricants, 217,000 tons of metals and metalwares, 33,000 tons of cotton, 72,000 sets of automobile tyres, 2,020 lorries and tractors, large quantities of self-propelled combines, agricultural machinery, rail waggons and spare parts.

p V. Kolarov, prominent leader of the Bulgarian working-class movement, stated: "Immediately after the armistice (October 1944), the Soviet Government displayed magnanimity towards the Bulgarian people. We were regarded . . . not as a defeated country, but as a friendly country. From 1946 to 1949 the Soviet Government supplied 345,000 tons of grain to save the population in drought-stricken areas of our country.”  [79•1 

p The two-year agreement, signed between the USSR and Bulgaria on July 5, 1947, provided 80 for still greater extension of trade. Imports of Soviet oil products, ferrous and non-ferrous metals and metalwares were envisaged in quantities fully satisfying Bulgaria’s needs. In addition, she received the necessary quantities of paper and cellulose, substantial quantities of natural and synthetic rubber and rubber goods, thousands of goods waggons and passenger coaches, trolleybuses, lorries and motorcars, metal-cutting machine tools, electric power stations and radio stations. In exchange Bulgaria sent to the Soviet Union tobacco, metal ores and concentrates, tinned fruit and vegetables. The agreement was concluded at a time when Bulgaria launched her two-year economic restoration and development plan (1947-1948).

p This was followed by the signing on August 28, 1947, of an agreement on Soviet deliveries of industrial plant on credit and the rendering of technical assistance in building new industrial enterprises. It was dovetailed with the republic’s two-year plan in whose successful implementation Soviet assistance played a considerable part.

p As a result of the fulfilment of the two-year plan Bulgaria’s industrial output exceeded the prewar level by 71.5 per cent, with the growth rates of heavy industry being considerably higher than in light industry. Notwithstanding three poor years, the grain harvest approached the 1939 level. Agricultural labour co-operatives became firmly established as the new form of organisation in agriculture. At the end of 1948, more than 1,000 of these co-operatives united 74,000 peasants and they owned about 3,000,000 decares of land (a decare equals about one-tenth of a hectare).

p The Rumanian People’s Republic has 81 repeatedly voiced its great appreciation of Soviet assistance rendered above all in foodstuffs. In 1945, the Soviet Union gave Rumania, by way of a loan, 300,000 tons of grain which helped her to cope with the serious food difficulties resulting from crop failure. In 1946, in view of the repeated poor crop, the USSR again came to her aid.

p The import of Soviet grain to Rumania was also of great political significance. Speaking on June 27, 1947, at the graduation of political workers of the Rumanian Army, Premier Petru Groza said: "The years of drought placed us in a difficult position. We were compelled to pay gold for maize from the West. The terms imposed on us were onerous, and this notwithstanding, we received very little maize. We again had to knock at the doors of our friends in the East. We know that they too suffered from drought and, nevertheless, last year they loaned us 30,000 carloads of grain delivered to our country, without demanding any guarantees, without demanding gold, and we were unable to repay this loan. Yet, when we again turned to our friends they understood us and are helping us again.”  [81•1 

p Serious food supply difficulties also arose in the Czechoslovak Republic. Here, too, Soviet assistance was of political as well as economic significance.

p In 1945 and 1946 the Soviet Union and Czechoslovakia made reciprocal deliveries of goods which subsequently were included in the nomenclature of mutual deliveries provided for by the agreement of April 12, 1946. On the same 82 day, a protocol on grain assistance to Czechoslovakia was also signed.

p In mid-July 1947, it was decided at the SovietCzechoslovak talks in Moscow that the two countries would conclude a five-year agreement. Specifically, it was decided that the Soviet Union would supply Czechoslovakia in 1948 with 400,000 tons of grain, including 200,000 tons of wheat. But on November 25, 1947, the Czechoslovak Government asked the Soviet Union to increase grain deliveries. By November 29 the Soviet Government had already informed Czechoslovakia that the request would be satisfied.

p The Soviet Union rendered considerable financial assistance to the People’s Democracies during those years. Under the agreement of December 14, 1948, Czechoslovakia received from the USSR a loan in gold totalling 132.5 million rubles at an annual interest of 2.5 per cent.

p The European People’s Democracies completed economic restoration in the main in 1948 and 1949, when two- or three-year restoration and development plans were carried out. As a result, industrial output in all these countries regained the prewar level and in some even topped it. Czechoslovakia, for example, reached the prewar level in 1948; moreover, it surpassed it by more than 30 per cent in the output of means of production. Poland’s industry was restored and substantially reconstructed as a result of her fulfilling the three-year plan (1947-1949). Bulgaria’s industrial output reached 170 per cent of the prewar level at the end of 1948.

The People’s Democracies swiftly organised their economic life and began to advance rapidly. While the index of industrial output (1937 = 100) 83 of six European capitalist countries (Austria, Belgium, the Netherlands, Greece, Luxemburg and France) amounted to 102 in 1948, 111 in 1949 and 116 in 1950, in the six European People’s Democracies (Albania, Bulgaria, Czechoslovakia, Hungary, Poland and Rumania) which suffered from the war much more than the capitalist states, this index was 122 in 1948, 151 in 1949 and 185 in 1950. In other words, in the People’s Democracies industrial production at the end of 1950 was almost twice as high as before the war, while in the European capitalist countries it rose only by 16 per cent.

Transition of the People’s Democracies to Long-Term Planning. Development of Economic Relations between Socialist Countries. Organisation of CMEA

p The fulfilment of plans for restoring the war-ravaged economy and the revolutionary economic and politlcal changes led to the introduction of socialist production relations. All this enabled the European People’s Democracies to begin long-term economic planning. The first five-year plans adopted by Bulgaria (1949-1953), Czechoslovakia (1949- 1953), Hungary (1950-1954’), Rumania (1951- 1955), Albania (1951-1955) and the German Democratic Republic (1951-1955) provided for the development of heavy industry and the laying of the economic foundations of socialism.

p The transition to long-term planning, in turn, created a solid basis for long-term economic agreements, for deepening and extending co-operation, and for the emergence arid development of new forms of economic ties between socialist states. The treaties of commerce and navigation and other long-term agreements played a big part 84 in the economic relations between the USSR and the People’s Democracies. The Soviet Union and Rumania concluded a treaty of commerce and navigation in Moscow on February 20, 1947. The parties agreed to accord each other unconditional and unlimited most-favoured-nation treatment with regard to all questions of trade and navigation and also of industry and other kinds of economic activity on their territories. The Soviet Union concluded similar agreements with other socialist countries: Hungary (July 15, 1947), Czechoslovakia (December 11, 1947), and Bulgaria (April 1, 1948). Article 1 of the SovietBulgarian Treaty stipulated that the governments of both countries would from time to time conclude agreements determining the volume and composition of reciprocal deliveries of goods, both for annual and longer periods and also other terms ensuring the uninterrupted and increasing trade between both countries in conformity with the economic needs of each. An agreement on reciprocal deliveries of goods in the period 1948- 1952 was signed between the USSR and the Polish Republic on January 26, 1948. It fixed the main contingents of mutual deliveries of goods, totalling more than $1,000 million. In addition, an agreement was signed on deliveries of industrial plant on credit to Poland (1948-1956).

p The trade and economic agreements between the Soviet Union and the People’s Democracies concluded between 1947 and 1950 reflected the new economic relations which were arising between socialist states. Their substance consisted in the striving of the socialist countries to help each other and to work jointly for general advance. The rise of such forms of co-operation 85 as co-ordination of national economic plans and industrial co-operation were a striking expression of the new economic relations. In the course of carrying out these agreements mutually-beneficial economic ties were extended and consolidated and the foreign trade of the People’s Democracies grew swiftly not only with socialist, but also with capitalist states.

The following figures illustrate the expansion of foreign trade of the European People’s Democracies (1946=100).

1947 1948 1950 1951 Poland .... 207 385 479 617 Czechoslovakia 233 306 288 370 Hungary . . . Rumania . . . 315 244 493 629 955 1041 1169 1198 Bulgaria . . . 142 228 228 231

p The trend of the foreign trade of these countries is marked by a relative decrease in the share of capitalist states and an increase in the share of socialist states. The share of capitalist states in the foreign trade of socialist countries dropped from 88 per cent in 1937 to 35 per cent in 1951, while the share of reciprocal trade of the presentday European socialist countries rose from 11.7 per cent in 1937 to 65 per cent in 1951.

p The founding of the Council for Mutual Economic Assistance (CMEA) was an event of primary significance for the further improvement of economic co-operation among the socialist countries, an event which reflected the laws governing the emergence of the world socialist economic system. 86 The decision to found CMEA was taken at an economic conference of delegates of Bulgaria, Czechoslovakia, Hungary, Poland, Rumania and the USSR held in Moscow in January 1949. The conference discussed the possibility of broader economic co-operation of the European People’s Democracies and the USSR. For these purposes it found it necessary to set up the Council for Mutual Economic Assistance from representatives of the countries participating in the conference on the basis of equal representation with the aim of exchanging economic know-how, rendering each other technical assistance and mutual aid in raw materials, food, machinery and equipment. The conference stressed that the CMEA was an open organisation which could also be joined by other European countries subscribing to its principles and wishing to participate in broad economic co-operation with its member countries. In February 1949 CMEA was joined by Albania, in September 1950 by the German Democratic Republic and in July 1962 by the Mongolian People’s Republic.

The establishment of CMEA ushered in a new stage in strengthening economic co-operation among the socialist countries and in developing the socialist international division of labour.