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p There are a number of reasons why it is so important now both for the Soviet Union and its partners to develop their mutually advantageous cooperation further.

p First, it is of great significance that the volume of international trade and the scope of foreign economic relations are developing faster than production.

p Second, by early 1978 a great many industrial and other projects had been built and commissioned in the developing countries of Africa with Soviet assistance. It is, therefore, essential to ensure that these enterprises are profitable, that the investments are recouped in optimal periods, and that they facilitate the development of stable, mutually beneficial relations.

p Foreign trade, economic and technological cooperation with other countries is economically feasible for the USSR when it provides for savings of social labour and time through a rational use of the advantages of the international division of labour. In evaluating the feasibility of its credits, the Soviet Union takes account of the fact that the goods and services with which it supplies other countries are to be produced and rendered specially for them, which incurs additional outlays. It also takes into account the compensation it receives in the form of foreign exchange or commodities.

p For the developing countries, the efficiency of their foreign trade, economic and technological cooperation with the Soviet Union is determined by the extent to which these factors affect the development of productive forces, the improvement in the structure of the economy, and positive changes in their status within the system of the 222 international division of labour. Briefly, the efficiency of their cooperation with the USSR depends on how it promotes the attainment and consolidation of their economic independence.

p Although economic prohtability and profit per unit investment are major indicators of the efficiency of industrial enterprises built in the developing world, this criterion cannot be applied to every cooperation project. There are projects (e.g. training centres) the economic efficiency of which may only be expressed in conventional terms, and often after quite a long period. Moreover, their operation is to be financed from the national budgets. This is why it is always useful for the objects of cooperation to include industrial enterprises that make it possible to accumulate funds for financing both the country’s development and reimbursement of all the expenses incurred by Soviet organisations in rendering assistance.

p Besides, the efficient operation of enterprises built with Soviet assistance, especially in Tropical Africa, is subject to a number of serious difficulties, both objective and subjective. It is extremely hard to develop economic ties and run government-owned enterprises in countries where private capitalist, small-commodity and semi-natural economies predominate. Individual enterprises built in African countries often do not maintain close economic ties with other enterprises, receive financial support from private credit banks, lack the necessary economic and technical leadership and are left to themselves in a hopeless fight against overseas companies engaged in a similar line of business. Moreover, the domestic market in many African countries cannot absorb the output of enterprises if they operate on the optimal level.

p In some African countries, economic difficulties give rise to problems connected with financing the construction of projects, providing them with working capital, and also paying back Soviet credits. There are other short-term difficulties stemming from the inadequacies arising in the initial, launching period. The measures required for overcoming all these difficulties, ensuring the profitability of enterprises and raising the efficiency of cooperation are as follows.

p The experience of the Soviet Union and its African partners shows that one decisive measure is to make a thorough preliminary study and prepare considered technical 223 recommendatioiis, especially on tho economic feasibility of a particular enterprise. The following practice has thus fully proved its worth: onco a request is received from the government of a particular developing country for assistance in building industrial or other projects, competent Soviet organisations appoint, in cooperation with design institutes, groups of Soviet experts and send them over to the partner-country. Their mission is to make joint preliminary field studies with local experts with respect to all the aspects of the future construction and operation of the project in question. Only if this study gives positive results is the project included in an inter-government agreement.

p A thorough knowledge of the domestic and foreign markets and the demand for a particular type of output, and also of current prices for the product provides the foundations for evaluating the profitability of the projects to be built. Accurate figures on a country’s labour resources are necessary to ensure an adequate labour supply for building and running a particular project. Data on the available design and construction organisations are also necessary, and the Soviet side has to be familiar with the recipient country’s labour and tax laws.

p The socio-economic conditions in each partner-country have to be reckoned with when planning to build and run an industrial enterprise, because they often affect supplies for the enterprise, its marketing opportunities and cooperation with other industries.

p Also of great importance is the joint work of Soviet and local experts on dovetailing the construction programmes for cooperation projects and existing plans for economic and social development, in order to facilitate their fulfilment.

p In the course of actual cooperation between the Soviet Union and independent African countries, two forms evolved for proving the technical possibility and economic feasibility of building industrial, electric-power, transport and communications projects, and the like: (1) technico-economic feasibility, and (2) technical project, which has a section dealing with technico-economic feasibility. There have been cases when both sides agreed, after Soviet experts had prepared technico-economic feasibility studies, that the construction of the negotiated projects was economically unsound, owing to a lack of the requisite conditions.

p The timely training of national personnel is a key 224 measure for ensuring the profitability of projects built with Soviet assistance and raising the economic efficiency of cooperation. With this in mind, after the agreement on the construction of a project has been signed, measures are taken to train experts and skilled workers for the building site and later the enterprise, so that national personnel might quickly replace Soviet experts.

p Another step towards ensuring the efficiency of enterprises is organising a smooth flow of raw materials for projects built or under construction with Soviet assistance. For example, in view of the expansion of the Helwan Iron and Steel Works in Egypt, an iron-ore deposit was prospected and developed and an access railway built.

p At the same time, measures are taken to ensure marketing, in order to guarantee the full and timely loading of enterprise production capacity.

p In many cases, Soviet experts together with local engineers seek ways of increasing the profitability of their enterprise and to this end devise and effect a broad range of measures aimed at reducing the production costs through higher labour productivity and workers’ skill, savings on raw materials, fuel, electricity, steam, and water, and at cutting down administrative and other expenses. Such measures also include cuts in the number of Soviet experts required thanks to the timely training of national personnel.

p The setting of correct prices for the output of Soviet-built enterprises is of great importance for ensuring their profitable operation. A lowering of sale prices in comparison with production costs makes an enterprise unprofitable. In Egypt, for example, the initial prices for the output of the antibiotic, chemical and pharmaceutical preparations plant were so low that, although the plant operated at above design capacity, the total value of its output was £E400,000, the cost of the raw materials consumed £E700,000, and the wages fund £E500,000. Given such low prices, the enterprise naturally incurred losses. This mistake was later corrected.

p On the other hand, excessive price rises for output lead to marketing difficulties, gluts and losses. In some cases, depreciation was overinflated, yet the majority of industrial enterprises built with Soviet assistance in independent African countries are operating at a profit and earning considerable sums for the state budget.

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p Raising the efficiency of projects in the non-productive sphere, taking due account of their specific features, is of equal importance. The governments of the partner-countries, for instance, take measures to enrol the required number of students in educational establishments built with Soviet assistance and to adapt their syllabi to national needs, in order that graduates might be employed more fully and rationally.

p Experience has shown that the construction of enterprises in whose output both the African countries and the USSR are interested is most promising and economically effective for both parties.

p Assistance rendered by big Soviet enterprises to similar plants in developing countries, including African ones, is an important means for enhancing the efficiency of cooperation. Soviet factories, which have vast experience and employ knowledgeable experts, offer efficient help to their African counterparts in organising production and training the work force.

p There are good prospects for the further development of trade and economic cooperation between the USSR and the African countries.

p The fulfilment of national five-year economic development plans has expanded the USSR’s opportunities for assisting the newly free national states in developing their economies. Also beneficial in this respect is the implementation of the Comprehensive Programme for the Further Extension and Improvement of Cooperation and the Development of Socialist Economic Integration of the CMEA Member-Countries. This states that the CMEA countries will attach special importance to further extending their trade, economic and scientific cooperation with the developing countries.

p The development of economic cooperation is promoted by the USSR’s increased demand for mineral and agricultural raw materials for its industry, and also by the Soviet population’s growing demand for articles produced by the developing African light and food industries.

p Yet the extension of Soviet-African economic links and trade is largely dependent on the position of the African states.

p The universal internationalisation of economic activities has been under way for many decades. This does not mean, 226 however, that favourable conditions for expanding economic relations between all countries or groupings are taking shape automatically. How fast they develop depends in each specific case on many factors, particularly inter-state political relations.

p The extension of detente and its materialisation create prerequisites for the all-round development of international trade. Addressing the UN Conference on Trade and Development (UNCTAD), Soviet delegates reiterated that various streams and trends in international trade, as well as in other forms of economic relations, are intimately connected. Cuts in military spendings, the complete liquidation of discrimination in international trade, and the spread of various forms of peaceful competition between the socialist and the capitalist countries will expand the opportunities for cooperation between the socialist countries and the developing nations of Africa.

p Soviet-African economic relations will apparently develop in several directions.

p First, the number of countries that will have economic and trade agreements with the USSR is expected to increase. To be sure, there are still African countries that, for one reason or another, have not shown any interest in establishing direct economic relations with the Soviet Union. There is no doubt that, sooner or later, they will realise that mutually beneficial economic relations are feasible.

p Second, the economic cooperation and trade under the agreements now in force are to be extended. As the African countries develop their productive forces and establish effective control over their foreign trade, credit and financial relations, they will show ever greater interest in making these agreements more efficient, in order to create the conditions for developing stable trade, economic and technological cooperation with the USSR.

p Third, some changes are likely in the sectoral orientation of technological and economic cooperation. With industry predominating in the USSR’s economic assistance to the African countries, cooperation in agriculture may be given a new impetus. There will be a growing tendency towards developing a modern, multi-sectoral agriculture in Africa. In a longer perspective, therefore, both the absolute volume of Soviet assistance in this field and the share of this 227 assistance in the overall volume of Soviet-African cooperation will grow.

p Fourth, the countries of Africa declare that application of the fruits of scientific and technological progress is their priority task, and their economic and social development programmes provide for concrete measures to attain this goal. The Soviet Union extends considerable assistance to African countries in this field, especially in training national personnel. Yet the scale of cooperation is to expand, particularly in training national cadres at all levels, including research personnel and the creation of a national scientific and technological base.

p Fifth, the commodity structure of Soviet trade with Africa is sure to improve, extend, and become more stable. For the last 20 years, the list of articles exchanged between the USSR and most of the African countries has boon cortinuously expanding, yet it is still limited.

p There are a number of reasons for this, such as the onecrop orientation of the economies of many African countries, the short period over which they have had trade relations with the USSR, and the domination of foreign monopolies, which survives to this day in the economies and foreign trade of some countries. As these restraints grow weaker or are eliminated, the conditions will emerge for a growth in the range and scope of mutually advantageous trade.

p Soviet exports to Africa will probably continue to be industrial. Opportunities for supplying various types of equipment and materials will grow substantially. Specifically, only a few countries in North Africa are now taking the first steps in developing their own heavy industry, whereas, in the next decades, quite a number of African countries, including those in Tropical Africa, will request hardware for their metallurgical, chemical and even engineering industries.

p Africa’s greater concern for the development of agriculture may lead to an increase in purchases of Soviet agricultural machines and implements. Most of the littoral African countries have programmes for building and expanding their national sea-going fleets. These countries may increase their purchases of vessels and port facilities from the Soviet Union. Various ferrous and non-ferrous rolled products, coal and coke, sawn softwood, paper, cardboard, chemicals, fertilisers, paints, drugs, recreation articles and household 228 utensils will continue to be in high demand among the independent African countries.

p Soviet imports from the developing countries will expand primarily through increased deliveries of the commodities that are regular features of their exports. These are foodstuffs, agricultural raw materials, minerals and manufactured goods (above all, light industry output). Trade and economic agreements signed between the USSR and a number of African countries in recent years provide for a sharp rise in Soviet purchases of manufactures, semi-processed articles and minerals. There is every reason to believe that this trend will continue.

p Most of the independent African countries will still need outside financial, technological and organisational assistance, especially for developing their processing and mining industries geared to export. For this reason, Soviet-African trade must be better coordinated with economic and technological cooperation in individual African industries.

There is no denying that the further expansion of SovietAfrican economic cooperation will call for additional efforts from both sides. Yet there is another equally irrefutable point: given the further relaxation of tensions and the continuous change in the international correlation of forces in favour of socialism, the prerequisites will be created for the continuous growth of Soviet-African economic, trade, scientific and technological ties.