1 Based on population and foreign trade figures in the international part of Statistickd ročenka ČSSR 1966, pp. 596, 584-85. Except for some minor discrepancies these figures are in line with the population and foreign trade statistics in the United Nations Statistical Yearbook 1965, pp. 92-93, 390-91. Since official exchange rates have been applied to convert exports and imports into dollars, the international comparability of these per capita figures is limited (see note 13 below).

2 Alfred Zauberman estimated Czechoslovak exports in 1956 at 18 percent of the Czechoslovak GNP in terms of current dollar costs (Industrial Progress in Poland, Czechoslovakia and East Germany [London, 1964], p. 280). Maurice Ernst estimated Czechoslovak imports in 1955 at 6 percent, in i960 at 12 percent, and in 1964 at 15 percent of GNP in terms of constant 1963 dollars (“Postwar Growth in Eastern Europe,” New Directions in the Soviet Economy [Washington: Joint Economic Committee, U.S. Congress, 1966], p. 900). Since 1955/56 Czechoslovak foreign trade has been rising much faster than national output in real terms: whereas from 1955/56 to 1964 the quantum of both exports and imports more than doubled (see Table 3), GNP in terms of 1955 constant factor cost increased, according to Ernst, over the nine years 1955-64, only by 45 percent (ibid., p. 880); official national income at constant market prices increased by 50 percent over the same period, and by 42 percent over the eight years 1956-64 (Statistickd ročenka ČSSR 1966, p. 25).

3 In 1937 special exports (at current prewar prices) were running at 19.9 percent, and special imports at 18.2 percent of the national income (at current factor cost) (based on United Nations Statistical Yearbook 1948, pp. 332, 337); these ratios are in line with a diagram in Jaroslav Štefan, “Zahranični obchod v československém hospodářstvi, “ Plánované hospodářstxí, No. 2, 1949. In the prewar market economy of Czechoslovakia import and export prices were not dramatically divorced from domestic prices and costs, and the exchange rates were not “artificial,” so that the above mentioned ratios in terms of prewar koruny are likely to be economically meaningful. The ratios of imports and exports to gross national product were, of course, some what lower. Unfortunately, no reliable information on Czechoslovakia's GNP in prewar koruny is available. If we assume that GNP (at factor cost) in 1937 was roughly 7 percent higher than the national income (which is in line with the depreciation rate as applied in national accounts by the State Planning Office in 1947), the export-GNP and import-GNP ratios in 1937 would be approximately 19 and 17 percent, respectively. On the other hand, Ernst (p. 900) estimated the prewar (probably 1937) ratio of imports to GNP in constant 1963 dollars at only 6 percent. Even if we allow for the difference in the pricing base—postwar dollars in contrast to prewar koruny—Ernst's estimate seems to be irreconcilable with the above mentioned much higher estimates. In my opinion Ernst's estimate is too low; however, to determine the nature and the scope of any possible downward bias, it would be necessary to study in detail his (unpublished) method to compute both Czechoslovakia's prewar GNP and prewar imports in terms of constant 1963 dollar prices.

4 2.2 percent according to official national income at constant market prices (Statistickd rodenka ČSSR, 1966, Table 5-11, p. 126); “nearly 3 percent” according to Thad Paul Alton's computation of Czechoslovakia's GNP (as cited by Maurice Ernst, p. 881).

5 These percentages have been obtained by comparing the trade figures for 1966 in Statistické přehledy, No. 4, 1967, with the 1965 figures in Statistická ročenka ČSSR 1966, pp. 432-34, in “foreign exchange koruny” (i.e., at current foreign trade prices). Previously published figures for 1966 in Statistické přehledy, No. 2, 1967, suggested an even sharper drop in the current value of Czechoslovak exports to the USSR and to the Communist countries as a whole.

6 The 1966 export and import values in current prices have been influenced by the new Comecon price base as discussed in the next part of this article.

7 In terms of quantum a shift in trade toward Western countries occurred earlier (see Table 3 and note 15 below).

8 Based on sources cited in note 5 above.

9 Based on Statistické přehledy, No. 4, 1967, p. 129; koruny converted into dollars at the official exchange rate. Surpluses in trade with the Communist countries are not fully comparable to the deficits in trade with the developed Western countries because of disorderly cross-exchange rates (see note 13 below).

10 This does not mean that Czechoslovakia has not been granting very substantial aid both to Communist countries and to underdeveloped non-Communist countries. On a per capita basis she granted during 1955-66 probably the highest foreign aid among all the countries of the world. However, this aid was given mostly in tangible goods and technical aid rather than in convertible currencies. Therefore it is reflected for the greatest part in the figures on visible trade.

11 According to Milan BakeS in Kulturni tvorba, March 2, 1967.

12 Tourist rates are applied to purchases and sales of foreign exchange by tourists, to transfers of gifts and inheritances, and similar noncommercial remittances.

13 Foreign tourists selling dollars, other Western currencies, and Yugoslav dinars receive a basic premium of 125 percent of the official exchange rates, minus a small commission (thus, 16.08 koruny for 1 U.S. $, compared with the official mid-point exchange rate of 7.20 koruny; in special cases, the premium is even more than 125 percent). Czechoslovak tourists purchasing these currencies pay a 405 percent surcharge (thus, 36 koruny for 1 U.S. $; it is noteworthy that the selling tourist rate comes close to the black market rate of the dollar in Prague). There is no spread between the buying and the selling tourist rates of the Communist currencies other than the dinar, except for a small flat fee. The tourist rate of the Bulgarian lev is 201 percent, of the North Vietnamese dong 123 percent, of the Chinese JMP 108 percent, of the Hungarian forint and of the Soviet ruble 20 percent, and of the East German mark 7 percent above the corresponding official rates. On the other hand, the tourist rate of the Rumanian leu is 3 percent, of the Albanian lek 20 percent, and of the Polish zloty 65 percent below the official rates. (All the above figures refer to Feb. 1967. They are based on “Kursovnf llstek,” published currently in Hospodářské noviny; on Economickd revue, No. 4, 1966; and on Mladá Fronta, Aug. 12, 1966.) Although the agio of the tourist rate tends to indicate an overvaluation of the koruna at the official exchange rate, this is not generally so. For instance, in spite of the 20 percent agio of the tourist rate of the ruble, the koruna is in all probability not overvalued at a low official rate of the ruble by the criterion of relative purchasing power from the point of view of an average tourist or of an average domestic consumer.

14 Absolute figures on exports and imports by large commodity groups, in millions of koruny at current foreign trade prices, were published in Statistickd rotenka ČSSR 1966, pp. 428-29.

15 The shift in the current value of trade from Communist countries partly back toward non-Communist countries occurred much later; this can be explained, in part, by the falling unit export price in trade with non-Communist countries in the late 1950s and the early 1960s (see Table 4) and by the narrower coverage of the quantum index.

16 While domestic wholesale prices were increasing prior to the 1953 currency reform (see Michal, Jan M., Central Planning in Czechoslovakia [Stanford, 1960], p. 147 Google Scholar), the export unit price was falling rapidly (see Table 4).

17 In Czechoslovakia a detailed description of these indicators was provided by Cerniansky, V. (Ekonomika socialistického zahraničniho obchodu [Prague, 1961])Google Scholar; in the West these efficiency coefficients of exports have been discussed by Zauberman, Alfred (“The Criterion of Efficiency of Foreign Trade in Soviet-Type Economies,” Economica, XXXI, Nos. 121-24 [1964], 5 ff.CrossRefGoogle Scholar), Brown, Alan A. (“Towards a Theory of Centrally Planned Foreign Trade,” in International Trade and Central Planning, ed. Brown, Alan A. and Neuberger, Egon [Berkeley, 1968])Google Scholar, and Wilczynski, J. (“The Theory of Compara tive Costs and Centrally Planned Economics,” The Economic Journal, LXXV, No. 297 [March, 1965], 77 Google Scholar), and others.

18 For instance, Jaroslav Jezbera proposed to decompose the price of exportables into material cost, labor cost, and capital cost, and to correct the money cost (at “artificial, “ fixed wholesale prices) of each of these components on the basis of input-output coefficients (“O effektivnosti zahranilniho obchodu zase jinak,” in Zahraniini obchod, No. 1, 1966, pp. 29 ff.). This and other proposals of economically meaningful indicators of profitability of trade are not very practicable. Their application runs into three basic difficulties. First, their computation and their communication to the foreign trade units and the production units is too time-consuming so that the change in the commodity pattern of exports (and of imports) is always several steps behind the changes in the world markets. Second, under the old system, neither the foreign trade monopolies nor the production units had sufficient incentives to make an efficient use of the profitability indicators. Third, because of the disorderly cross-exchange rates of the Czechoslovak koruna, the profitability indicators would have to be calculated and applied separately for each currency area; to reduce this weakness of profitability indicators František Hejduk proposed a calculated “optimum territorial pattern of exports”(by currency areas) in “Experiment optimalizace vÝvozu,” Zahranični obchod, No. 2, 1967, pp. 3-11.

19 Statistická ročenka ČSSR 1966, p. 122.

20 The adjustment should be for all items covered by official national income aggregates, i.e., including a part of invisible trade. Such an adjustment is not possible for lack of available statistical information. The resulting distortion of “loss” is probably not serious. There is, however, an additional problem of converting foreign trade surplus into domestic currency. If the conversion is made at official exchange rates, and if these imply an overvaluation of the Kčs, the “loss” would be overestimated. However, Czechoslovakia's surplus comes mostly from trade with currency areas in relation to which the Kčs may not be overvalued (see Table 1 and note 13 above).

21 Based on income-produced and income-distributed data, Statistickd ročenka ČSSR 1966, p. 128; adjustment of the difference for the surplus of visible exports over visible imports based on foreign trade data, ibid., pp. 40-41.

22 For instance, exports in 1963 amounted to 17.7 billion koruny at current foreign trade prices. Let us assume that (a) the current domestic wholesale price (money cost) of exports was 22.1 billion koruny (implying a subsidy of 44 billion koruny, that is, 25 percent of the export value) and (b) nine-tenths of the “loss in the national economy” was money loss from exports; then the estimates that the net export subsidy in money terms amounted to one-fourth of the export value could be consistent with my approximation of the “loss in the national economy” in that year (5.0 billion koruny).

23 Jaroslav Blahnik reported that the so-called rentability (money profit as percent of money cost) in 76 machinery-producing and metal-using trusts amounted in 1964 to less than 1 percent and that “several trusts operated with a loss” (“Jednorázové šetření o struktuře československého prumyslu,” Statistika, No. 3, 1966, p. 104).

24 Příspfcvěk k analÝze našeho hospodářského vÝvoje,” Politická ekonomie, No. 1, 1966, p. 22.

25 A fairly comprehensive description of the operation of the new system in industry, construction, and domestic and foreign trade can be found in the special supplement to Hospoddfski noviny, No. i, 1967.

25 A similar argument has been put forth in more detail by Václav HolešovskÝ in 26 Problems of Transition to the ‘New Model’ in Czechoslovakia,” ASTE Bulletin, VIII, No. 3 (Fall 1966), 4-5.

27 According to Rudé Právo, Sept. 9, 1966.

28 For instance, Hejl, L., Kyn, O., and Sekerka, B., “Vlastnosti dvoukanálového typu ceny,” EkonomickÝ časopis, No. 6, 1966, pp. 514–32.Google Scholar

29 Rudè Právo, July 4, 1967.

30 Vladislav Knobloch, “Kategorizace cen spotřebniho zboži v roce 1967,” Finance a úvěr, No. 2, 1967, p. 98.

31 Rudé Právo, Feb. 2, 1967. It is noteworthy that the traditional “Report on the Plan Fulfillment” has been replaced by a “Report on the Development of the National Economy.“

32 Sbirka zákonú, No. 83, 1966.

33 For instance, according to the trade agreement with the USSR for 1967, signed in Moscow on Nov. 26, 1966, Czechoslovakia has to supply 1700 metalworking machines, 700 diesel aggregates, 142 electric locomotives, 160 diesel-electric locomotives, 50, 000 motorcycles, 20 million pairs of shoes, etc., and has to purchase from the USSR 7.2 million metric tons of crude oil, 9 million tons of iron ore, 48, 000 tons of ferroalloys, 6000 automobiles, 1800 heavy tractors, 370, 000 watches, etc. (Rudé Právo, Nov. 27, 1966). The long-term trade agreement with the USSR for 1966-70, signed in Prague on Oct. 5, 1966, also stipulates a large number of exports and imports in physical units (Rudé Právo, Oct. 6, 1966).

34 According to S. Hejduk and V. Janefek the introduction of the new prices on Jan. 1, 1967, involved an average increase in wholesale prices by 25 percent (Hospoddfskd Noviny, Jan. 27, 1967).

35 It may be extremely difficult to determine the necessary scope of such devaluation since, as far as this author knows, no studies on the price and income elasticities of demand for Czechoslovak exports and imports are available. Yet it is very likely that the sum of the price elasticities of foreign demand for exports and of domestic demand for imports is substantially more than 1, so that a limited devaluation of the koruna would improve the Czechoslovak balance of trade.