JPRS 80610

20 April 1982

USSR Report


No. 1, January 1982



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JPRS 80610 20 April 1982

USSR REPORT USA; Economics, PoLiTics, !DEOLOGY No, 1, January 1982 Translation of the Russian-language monthly journal SSHA: EKONO-

MIKA, POLITIKA, IDEOLOGIYA published in Moscow by the Institute of U.S. and Canadian Studies, USSR Academy of Sciences.


1982: A Year of Alarms and Hopes........ TETELEPELILELILTLT ETT eocccces 1

Washington and the New International Economic Order (A. Vv. Nikiforov) ee ff ee ee *enereinrieeeneeee eereeneeeeeneeeeeeeneeeeneneeeeeeee#e## *# ee 7

President F. D. Roosevelt: Political Realism and Ac*tion* (N, Vv. Sivachev) ne © fe *eerenrerneneeneteeeneeeneeeenrtenenee eereeeeee*e se erewenereneeene eeeeee#se 21

United States-Israel: Special Relations + M. Rogov) eee eeeeneeeeretee *e © © *enrnrneeneeeteneneneneneeneneeneteeeneneeneeneeeeeneee#ee 22

United States Military Build-Up in the Indian Ocean (V. P. Kozin) *eereeeeeeee ne eet eeweneeneneeee# *enereeneeneneeneteeneteeneneneneneneneneneneneeeeee 36

American Destiny as Seen by Novelists of the 1970's* (A. Ss. Mulyarchik) eee ee eeee ee ee © ere eereeeeeeeee seer erereeeneeneneneeeeee*es 49

A. A. Troyanovskiy, the First Soviet Ambassador to the United States of America* (Ye. I. Krutitskaya, L. S. Mitrofamova)....ccccccscccsccssessseseses 49

Western Europe Opposes U.S. Plans To Deploy New Missiles (S. A. Ulin) eevee eee eeeeeeeeeneenener er errr eee “ee eeeenenee ‘eee ee eee eneeneenee 50

‘Jubilee’ Congress of AFL-CIO* CM. ZT. Lepdtakhy) cccccccccccccccccccccccccccce ccccccceces ceccccceces 54

Legislation for Foreign Investment 1. Canada* CV. ZT. Al@RREM) ccccccccccccccccccccccccccccccccccecceceeceeoceceoees 54

* Not translated by JPRS.

-ae- [III - USSR - 39]

CONTENTS (Continued)

Friendly Fasciem: The New Face of Power in America® Cyl I ) PPrTTTTTrTrerrrrererrrrresrrrersrrrrrerTe Sen ee. @ ee ee 54

Ecological Analysis and Its Impact on the Economy* (MW. P. Yevdokimova, V. 2. BOROLOV) ccccccccccccccccccccccccccccccces 54

Book Reviews Military Spending and Employment,* by V. B. Benevolenskiy and

A. Re DOYVRIR ccc cee reece eee eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeereccere 55 Erosion of Middle-Class American Dream,* by V. S. Vasil'yev and A. A. Ts «can eneee ne 6aesenseseodensees enceoseees eee fe 55 Factors Affecting Foreign Policy Decisions,* by N. M. Travkina..... 55 American Capitalism and Technology Transfers, by A. B. Parkanskiy.. 56 Ecology and the Capitalist City, by V. I. Sokolov........... occccce 57 Arthur A. Harman--New U.S. Ambassador to the Soviet Union*........... occcece 58 Chronicle of Soviet-American Relations (September-November 1981)......... ee 59

* Not translated by JPRS.

English title

Russian title

Author (s)

Editor (s)

Publishing House

Place of Publication

Date of Publication

Signed to press




No 1, January 1982


: N. D. Turkatenko

: Izdatel'stvo Nauka

: Moscow

: January 1982

: 30 December 198!

: 33,640

COPYRIGHT : Izdatel'stvo "Nauka", "SShA--ekonomika, politika, ideologiya™", 1982


[Text] The dangerous heat of arms race escalation must be mode- rated. The p ch of tension must be lowered, dangerous sparks

of crisis mus. be extinguished, the sensel: ss arms race must be ended and there must be a return to normal relations between states, mutual respect, understanding and consideration for one another's legitimate interests. A serious and businesslike approach must be taken to the problems of arms limitation and reduction. All of this can and will eliminate the danger of nuclear war. (from L. I. Brezhnev's responses to NBC television, reprinted in PRAVDA, 22 December 1981)

There has been no period of history, and probably never will be, that has been completely placid for individual countries and all mankind as a whole, there has been no period of history that has not been full of troubles, or even tragic wars which have taken the lives of millions of people. The period of cold war lit the spark of “local” conflicts, which ceased to be local long ago because they gene- rally came to involve countries located far away from the “hot spots." Imperialism brought the world to the verge of thermonuclear catastrophe several times by starting and escalating these conflicts. In V. I. Lenin's words, there has been

a continuous game of chance, a game in which the blood of millions is shed for the sake of conquering and plundering foreign lands.

In the United States this game was defined accurately by W. Fulbright, a veteran of American politics, who called it a symptom of the "arrogance of power.”

The failure of the aggression against the people of Indochina seemed to prove the futility of this policy once and for all. A new era began. The process of

detente quickly gathered momentum. The principle of peaceful coexistence by states with differing social systems, a principle defended by the Soviet Union from the very first moment of its existence, began to visibly and tangibly take hold in the world irena. This principle was once officially recognized by Washington, which promoted the normalization of Soviet-American relations. This, in turn, had a favorable effect o1 the political climate throughout the world.

However, militarism, according to V. I. Lenin's definition, is one of capita'ism's "vital signs,” and the more aggressive imperialist circles objected to detente

from the very beginning and started to attack it. These attacks were particularly overt in 1981. lafluential forces in the most powerful capitalist nation, the United States, made a much more energetic effort to “cure America of the post- Vietnam syndrome." Political scientists of all schools began to interpret this "syndrome," a concept they themselves had invented, as something just short of

"a masochistic obsession with an accidental defeat," which should te "cured as quickly as possible" so could get back to normal.

Under the cover of pseudoscientific phrases and chauvinistic slogans, Washington began to flex its muscles and allocate more and more billions of dollars for mili- tary needs. At first this was done on the pretext that it was necessary to

"defend peace through power." Later even this pretext was discarded. Washington announced its intention to eradicate a strong guarantee of peace and security: the balance of strategic power between the USSR and United States, between the Warsaw Pact and NATO. A policy of U.S. military intervention throughout the world was i!so announced when entire regions were declared "spheres of American vital interests.”

Many new pretexts were invented for this policy, but they were essentially the same as the old ones. "The monopolies decided," the accountability report of the CPSU Central Committee to the 26th congress of the Communist Party of the Soviet Union says, "that they needed someone else's oil, uranium and nonferrous metals, and so the United States declared the Middle East, Africa and the Indian Ocean a sphere of U.S. ‘vital interests.’ The U.S. military machine is actively pushing its way into this region and plans to stay here a long time. The island of Diego Garcia in the Indian Ocean, Oman, Kenya, Somalia, Egypt--what next?" The old scarecrow of the "Soviet threat" was once again dragged out into the open to camouflage this policy more effectively. When Washington leads itself into a blind alley, whether in the Middle East or in Europe, it makes a tremendous effort to convince the entire world that the "hand of Moscow" is directing all revolu- tionary conflicts and upheavals, which are known to be nothing other than symptoms objective historical processes taking place in today's world, because Moscow did not want--and never will want--to live according to the "code of behavior" stipulated by Washington.

As a result of all this, the threat of a nuclear conflagration was intensified in 1981. The world was seized by troubles. The United States had its share of these troubles too. Washington's reversion to a foreign policy from a position of streneth and anti-Soviet hysteria were called insane by such experienced diplomats and politicians as A. Harriman and G. Kennan. One of the pillars of the American establishment, THE NEW YORK TIMES, loudly declared that Washington's policy was costing the United States too much. It was losing economic strength and diplomatic influence, its national security was being undermined and its moral prestige in

the international arena had declined, not to mention domestic political and eco- mic consequences.

The troubles seemed countless, but life would not be life if there were nothing

but trouble. There is also hope, and the foundation of this hope is the Soviet Union's consistently peaceful policy, which is free of temporary considerations and which is winning more and more approval throughout the world, including the approval of sensible people in the United States.

First of all, the Soviet Union introduced clarity and some calm into confused minds in the Western European countries, which Washington had tried to convince of the inevitability and even acceptability of “Limited nuclear war"--although, of course, {t would mean the end of the European continent. The Soviet Union discredited and refuted this delirious idea and simultaneously warned Washington officials that if a nuclear war were to break out, whether in Europe or in any other place, it would unavoidably and irrevocably take on global dimensions, and those who hope to set fire to the nuclear powder-keg and then sit on the sidelines and watch should not entertain illusions.

The Soviet Union exposed the myth of the "Soviet threat." The tor Soviet leader, L. I. Brezhnev, has stressed over and over again that the Soviet Unfon is not threatening anyone, does not plan to attack anyone and has a military doctrine which is purely defensive in nature.

Last vear the Soviet Union continued its peaceful offensive. It made new proposals and suggestions in repord to specific, carefully considered and fair ways of lower- ing the pitch of international tension and eliminating seats of conflict in the vast expanses trom Central Europe to the Far East, including the Middle East, the Persian Gulf zone and the I[ndian Ocean.

The Soviet Union has been equally consistent in pro»vosing the normalization of relations with the United States, based on mutual respect and on consideration for one another's rights and interests. Furthermore, the Soviet Union has stressed

its desire to have good and friendly relations with the United States and cooperate with it for the sake of stronger peace co earth.

At the end of 1981 the hope that the world still hid the will to eliminate the danger of war was reinforced by the start of talks on the reduction of nuclear weapons in Europe by representatives of the USSR inc the United States in Geneva on 30 November. There was the possibility that this would be followed by the con- tinuation of the Soviet-American talks on the limitation of strategic weapons. President Reagan said that the United States was willing to discuss this matter with the Soviet Union, as well as other matters on which the two sides disagreed. The Soviet side applauded this willingness but stressed the need for words to be backed up by the appropriate actions.

The hope that peace and security would be consolidated and that detente would be continued and strengthened was given strong momentum by L. I. Brezhnev's visit to the FRO and his talks with Chancellor H. Schmidt. This visit was of tremendous importance, and not only in the bilateral relations between the USSR and the FRG.

At this tense and extremely crucial moment in international relations, when they could deteriorate dramatically or change for the better, L. I. Brezhnev's visit to the FRG is of particular significance in relation to the entire group of problems between the East and West and the general trends in world politics.

The new Soviet-West German summit meeting and its results provide more evidence of the efficacy of the Soviet policy line in international affairs, which was worked out by the 26th CPSU Congress and is aimed at eliminating the danger of war, especially nuclear war, at disarmament and at detente and peaceful cooperation

by states with differing social structures. L. I. Brezhnev's negotiations, con- versations, meetings and statements in the FRG represented a major political step in the implementation of the Program of Peace for the 1980's.

The fundamental security interests of the Soviet people, friends and allies of the USSR and all of the Europeans dictated the need to focus the talks in Bonn on the most urgent and momentous issue: the elimination of the danger facing Europe in connection with the plans to deploy new types of American nuclear missiles in several Western European countries, especially the FRG, and the prevention of the disruption of -:he balance of power in favor of the NATO bloc. This issue was raised as “trectly and definitely as possible.

While he was in the FRG, L. I. Brezhnev set forth new, far-reaching proposals with a single aim in mind--the aim of reaching a mutually acceptable agreement to deliver Europe from the danger of a nuclear conflagration. These proposals were not only intended for the FRG and other Western European countries, but were also addressed to the United States in connection with the start of the Soviet-American talks on medium-range nuclear weapons in Europe.

In essence, the new Soviet proposals are the following.

First of all, the Soviet Union considerably supplemented its earlier proposal regarding the moratorium on the deplovment of new medium-range nuclear weapons in Europe and the modernization of existing ones for the period of the talks on these types of weapons. The Soviet side expressed its willingness, on the condition that the other side consent to this moratorium, to unilaterally reduce the number of its medium-range nuclear weapons in the European half of the USSR, thereby mov- ing toward the lower level which the USSR and United States might agree upon during the course of the talks.

Secondly, the Soviet Union stressed its intention to advocate the radical reduc-

tion of medium-range nuclear weapons by both sides at the Geneva talks--to reduce the number of these weapons by hundreds and not by dozens. Naturally, this will

include American forward-basing weapons and the corresponding nuclear weapons of

England and France.

Thirdly, the USSR would be prepared to agree on the complete elimination of all types of medium-range nuclear weapons aimed at targets in Europe by both sides, the West and the East.

Furthermore, L. I. Brezhnev stressed, the Soviet Union is completely in favor of eliminating all nuclear weapons, medium-range and tactical, from Europe. This would be a genuine final solution that would be fair to both sides.

‘he proposals set forth by L. I. Brezhnev represent a program for the curtailment ‘f nuclear weapons in Europe. It is consistent with the desires of all people and the demands of the broad masses opposing the danger of nuclear war.

The Soviet Union expects the West, especially the United States of America, to give the new Soviet initiatives its full attention and objective consideration.

The issue of nuclear weapons in Europe is an issue concerning more than the future of the continent and the fate of the hundreds of millions of people inhabiting it. It is also an issue concerning the fate of the entire world. The Soviet Union wants to negotiate the kind of settlement that will not harm anyone's security but will lower the level of military confrontation in Europe.

It would be an illusion, however, to imagine that this kind of settlement will come about by itself. Judging by many indications, the chief NATO powers, especially the United States, are still hoping to gain military advantages for themselves and are actually hoping for the unilateral disarmament of the Soviet Union. As L. I. Brezhnev has stated firmly and clearly on several occasions, including his trip to the FRG, the Soviet Union will not agree to this. The Soviet people and the Communist Party will never compromise the security interests of our country and our allies and friends. The European people, the American people and all those who value the cause of disarmament and peace must know about this. Western government officials must also realize this.

One of the main conclusions that can be drawn from L. I. Brezhnev's talks in the FRG, as underscored in the document of the CPSU Central Committee, USSR Supreme Soviet Presidium and USSR Council of Ministers "On the Results of the Visit of Comrade L. I. Brezhnev, General Secretary of the CPSU Central Committee and Chair- man of the USSR Supreme Soviet Presidium, to the Fereral Republic of Germany," is that states, regardless of their social order or thelr membership in various mili- tary alliances, must make every effort and continue to work together in order to consolidate peace and restore the climate of detente and trust. It is essential that all states take this as a guide.

The document states that L. I. Brezhnev's talks in Bonn revealed the common views

of the Soviet Union and FRG about the importance of maintaining political dialogue between states in complex international situations. The CPSU and the Soviet State have always believed that each country, sensing its responsibility for the course

of international events, should do everything within its power to create a political atmosphere favoring the successful conduct of talks and the development of dialogue. As for the dialogue between the USSR and the United States, the Soviet position on this matter has been defined quite clearly, primarily at the 26th CPSU Congress.

It is in favor of this dialogue.

The Soviet Union's international activity for the security and progress of people, for detente and for the curtailment of the arms race is strengthening the will of people everywhere on earth to preserve the highest value of human civilization-- peace--and tc defend it actively and daily.

Experience has shown that the chance of success in the struggle for peace increases as the voices of individuals, various social fo ces and groups in defense of peace become louder and more demanding. The results c.f L. I. Brezhnev's trip to the FRG are increasing the chances that the struggle for the preservation of peace will become more effective and are giving people more confidence that even the most difficult international problems can be solved.

The hope of a peaceful future on our planet would be even stronger if Washing*on could give up its dream of attaining military superiority to the USSR. After all,

if the need should arise--and experience corroborates this--the Soviet people will find a way to make an additional effort and do everything necessary to provide their country with reliable defense. Washington will not be able to intimidate the Soviet Union with economic pressure either. It should remember that the benefits of economic cooperation are not at all the privilege of any one side. This kind

of cooperation is mutually beneficial and those who oppose it will harm themselves at least as much as the other side, if not more.

Who now does not know that wise government does not consist in "responding quickly" with force or various types of "sanctions," but in responding correctly, with a view to the objective realities of today's world, and finding peaceful ways of solving problems?

We hope that precisely this kind of wisdom will triumph. We hope that the people's wishes for peace and disarmament will triumph. We hope that the vear of 1982 will alleviate fears and strengthen hopes.

Man is responsible for everything that happens on our planet. There is nothing predetermined or inevitable about a thermonuclear catastrophe. The people who are involved in the constantly growing movement for peace and security are well aware of this. Responsible politicians and leading scholars in all countries are also aware of it. These are precisely the ideals that lie at the basis of, for example, the international Pugwash movement of scientists, the latest meeting of which was held at the end of 1981. The members of this movement are guided by the belief that mankind can only be saved through the actions of people. It is the duty of all people, working together and individually, to save civilization. Science, just as all other spheres of human activity, must be used for the good of mankind and not for the escalation of the arms race or for the sake of general destruction.

COPYRIGHT: Izdatel'stvo "Nauka", "SShA--ekonomika, politika, ideologiya", 1982

5 588

CSO: 1803/8


[Text] The heads of state and government from 8 developed capitalist nations and 14 developing countries met in Cancun (Mexico) at the end of October 1981. The meeting was part of the "North-South" dialogue, which began in 1975, regarding international economic cooperation and the development of young states. The prepa- rations for the conference and the discussions at te meeting directed the atten- tion of the international community to the struggle of the developing countries for a "new international economic order" (NIEO), which has made the problem of reorga- nizing international economic relations one of the central issues in contemporary international politics. As a necessary continuation of the process of decolonial- ization, this kind of reorganization, conducted on a democratic basis and in line with the principles of equality, would be historicilly natural, as speakers stressed at the 26th CPSU Congress.! The struggle of the developing countries for the NIEO, which is intended to eliminate neocolonial exploitation, has given rise to a new sphere in the foreign policy of the largest neocolonial power, the United States--policy on the reorganization of international economic relations.

Washington's approach to this problem, particularly the demands of the NIEO progran, has been shaped by three main groups of factors. The first consists of the comp- lex of U.S. economic and social interests in the developing countries. The scales of U.S. economic ties with this group of countries are constantly growing. In 1979 this group accounted for almost 34 percent of all American exports and 45 percent of U.S. imports. In 1978 more than half of the industrial commodities exported by the young states to the developed capitalist countries entered the U.S. market, including almost 60 percent of their exported machines and transport equipment.

The United States receives almost a third of its imported raw materials and 37 per- cent of its imported mineral fuel (oil and gas) from the same states. In turn, the developing countries receive one-fifth of all their imported machines, one-fourth of their chemicals, one-third of their textile fibers and more than one-half of their cereal grain from the United States.2 The combined direct investments of American monopolies in the developing countries are now growing more quickly than capital investments in the developed capitalist countries and totaled 47.8 billion dollars by the beginning of 1979. The profit norm on these investments was 26.5 percent in the first case and 17.7 percent in the second.3 It must be borne ‘n mind, however, that the lion's share of American investments is concentrated in a

small group of the most highly developed countries in Latin America and Southeast Asia. According to some data, American private banks account for around 40 percent of all the bank credit received by the developing countries, or almost one-third of the overseas credit extended by these banks. 4

The United States and other Western nations regard the developing wor]d with its population of millions as a reserve for the expansion and rejuvenation of the entire capitalist system by means of its development "in breadth." In recent years, however, Washington has been pressured by the "Group of 77" to take some steps to reform the system of neocolonial exploitation.) The only specific change in the U.S. stand on the NIEO, however, has consisted in attempts to guarantee U.S. monop- olies compensation for the economic ".osses" they sometimes incur as a result of the disruption of neocolonial relations by attaching the young states to the world capitalist system with economic and political bonds.

Therefore, the economic and social interests of the United States in these count- ries will determine the objective limits and possibilities of change in the U.S. approach to the NIEO--from attempts to preserve the essence of neocolonial rela- tions as much as possible to the satisfaction of some of the demands of the devel- oping countries, but certainly only on the condition that these demands do not transcend the capitalist framework.

Secondly, differences in the foreign policy philosophies of the Democratic and Republican parties, particularly in their approaches to relations with the develop- ing countries, play a significant role in determining the U.S. stance in talks on the NIEO at different stages.

Thirdly, the U.S. approach to the demands of the liberated countries has been greatly influenced by foreign political factors, the dynamics of the developing world's struggle for the NIEO and the effectiveness of its political pressure on the Western countries, especially the United States. In turn, these factors are closely related to the overall state of international relations and the evolution of the central global conflict of the present day, the conflict between socialism end capitalism. There was a natural connection between the atmosphere of detente in the mid-1970's and the initial success of the developing countries’ struggle for the NIEO, just as there is now an obvious connection between the United States' present negative stand on these problems and its general line of undermining detente and relying on military force to settle international problems. Against the background and within the framework of this connection, the attitude of Washington's Western allies toward the NIEO is certainly affecting the specific solutions chosen by Washington as ways of settling the conflict over this issue. Although there are noticeable differences in the allies’ opinions, the Western Furopean countries and Japan have had a general restraining effect on the U.S. stand on the NIEO. These countries are more dependent on the developing world for their raw materials and oil, have a keen awareness of the peculiarities of the developing countries and have a great deal of experience in sociopolitical maneuv- ering, and these generally lie at the basis of their more flexible position with regard to the NIEO. Although the United States will still have the "final say" on matters pertaining to changes in capitalism's world economic ties, it has had to modify its policy on the NIEO talks and certain aspects of its counterproposals under pressure from its allies.

The Demands of the Developing Countries

The abovementioned general international conditions of the mid-1970's and the reduced ability of the impertalist powers to use extra-economic means of coercion, primarily military force, allowed the developing countries to, first of all, actu- ally begin rebuilding their economic relations with the West "from the bottom up," so to speak (by nationalizing branches of American and Western European monopolies, raising the prices of raw materials, regulating their extraction, etc.) and, secondly, force the West to discuss the NIEO program. We should recall that its basic provisions were set forth in four UN General Assembly documents: the decla- ration and program of action for the establishment of a new international economic order, adopted by the Sixth Special Session of the UN General Assembly in 1974, the charter of economic rights and obligations of states, adopted by the 29th regular session in 1974, and the resolution on development and international eco- nomic cooperation, adopted by the seventh special session in 1975.

The demands of the developing countries are aimed at the attainment of three main groups of objectives. The first group includes the implemencation of certain prin- ciples and their total establishment in international relations--principles such

as the unconditional sovereignty of states over their economic resources, the sovereign equality of states, the freedom to choose economic and social systems, the prohibition of discrimination on these grounds, and some others. The second group of objectives is concerned with “guaranteeing them fair participation in the international decision-making process." It includes, above all, the augmentation of their role in existing international economic organizations (IMF, the IBRD group and others), and not only a role commensurate with their economic strength and financial contribution, but a role based on the gradual elimination of the absolute connection between the contributions of members and their number of votes in the decision-making process, and, secondly, the creation of new organizations in accordance with this principle. Besides this, the developing countries are demand- ing that the functions of overall supervision and the elaboration of international economic reforms be transferred to organs in which the political equality of states is already guaranteed (the UN General Assembly, UNCTAD, UNIDO and other UN bodies).

The third group of objectives covers demands in various spheres of economic rela- tions between the developed capitalist states and the developing countries. One of the central demands concerns the stabilization of the developing countries’ reve- nues from raw material exports. Their main proposals in this sphere are all set forth in the so-called incegrated program of raw materials and the general fund.® Besides this, to eliminate the negative effects of inflation, the raw material price index is to be regularly brought in line with the price index of the 89 prin- cipal commodities imported by the developing countries from the developed states (indexation). The developing countries are also demanding, in addition to this price maintenance mechanism, considerably broader scales of compensatory financing (to cover a deficit in the balance of payments in the event of declining export revenues): a simpler procedure for the consideration of requests, the cancella- tion of the practice of extending credit on the basis of the general balance of payments, etc.

The proposals pertaining to currency and financing problems cover such items us the "general alleviation of the burden of debts,"/ increased resource transfers® and the reform of the international currency and financing mechanism. ?

In the sphere of trade in finished industrial goods, the developing countries are demanding the general reduction of the import customs tariffs of the developed capitalist countries; the establishment of differentiated and more favorable cus- toms terms for the commodities of the young states (that is, lower tariffs than those charged in trade between developed countries on most-favored-nation terms); a pledge by the developed countries not to institute any new non-tariff restric- tions on imports from the Third World (the "status quo" principle). By the end of the 1970's all of the problems connected with the world trade in industrial goods, the increased export of which is rightfully viewed by the young states as the chief means of their industrialization and development, were set forth by these countries in the concept of the "structural reorganization of the world economy for the purpose of global development." This concept essentially signifies that coordinated measures will be worked out on the UN level (by UNCTAD, UNIDO and the ILO) and carried out by the developed countries to move certain spheres of produc- tion to the developing countries when the latter have relative economic advantages in these spheres (the proximity of raw materials, for example).

Finally, the developing countries have demanded measures to strengthen the inter- national legal regulation of the activities of multinational corporations. The central demand in this area concerns the development and adoption of a "code of behavior for the multinationals," which would regulate the main spheres of rela- tions between private investor firms, host countries and the multinationals’ base countries.l0 Another special code would regulate international technology trans- ‘ers in order to simplify and expand these transfers, particularly in the develop- ing countries, and eliminate excessive restrictions on the transfer of patented

t echnology °

The developing countries believe that both codes should be legally binding, should apply only to multinational corporations and should provide for the settlement of disputes in accordance with the national legislation of the states receiving the investments and technology. Besides this, international bodies should be set up to oversee adherence to both codes. At the initiative of the developing countries, draft standard legislation is being elaborated in UNCTAD with regard to "restric- tive business practices" (the restriction of the access of firms to markets by monopolies, the "unfair" restraint of competition, the exertion of negative pres- sure on the consumer, etc.), which could lie at the basis of the appropriate national economic legislation in these countries. Although the provisions of this draft are universal in nature and are not directed exclusively against the multi- national corporations, it is precisely the monopolistic "business practices" of these corporations that are threatening the development of the national economies of the young states.

Tt is not difficult to see that the NIEO program is based on the following main principles: the sovereign equality of states and the establishment of state sovereignty (primacy in domestic affairs and independence in foreign affairs), the principle of the responsibility of the developed capitalist countries for the underdevelopment of the young states and the related principle of non-reciprocity (special privileges, the redistribution of financial resources in favor of the developing countries, etc.) and the principle of the political regulation of eco- nomic relations by means of the expansion of international legal agreements, which should be aimed at establishing the political equality of states in order to eradi- cate their economic inequality.


The principle of interdependence plays a special role here. The definitions of this term in documents pertaining to the NIEO contain cautious references to the common long-range interests of the developed capitalist nations and the developing countries, For example, the charter of the economic rights and obligations of states says that "the prosperity of the developed countries and the growth and development of the developing countries are closely interrelated" and the declara- tion on the establishment of the NIEO states that "the interests of the developed countries and the interests of the developing countries can no longer be isolated from one another."!1 Although the specific demands and the abovementioned "working" principles of the NIEO often turn out to be unacceptable to the United States and other Western countries in practical talks, the concept of interdependence, in the sense that the developed capitalist countries must agree to the NIEO for their own good, is laying the ground work for compromises. This is why the thesis regarding interdependence has become the common "theoretical" basis for the entire North- South dialogue and all of the reforms proposed by both sides for world economic capitalist relations, regardiess of how different they might be.

The Carter Administration's Approach

It was this interpretation of the thesis of interdependence that served as the basis of the Democratic administration's approach to the idea of reorganizing international economic relations. "We are fully de ermined to support the rapid and comprehensive growth of the developing countrie as something that is consis- tent with our national interests and ideals," said .ormer Secretary of State Vance. "We realize that this will sometimes require some adaptation of our own economy."12

The Democrats’ characteristic policy of safeguarding long-range U.S. interests in the developing countries by means of socioeconomic reforms (this is attested to by just the main goals of the "New Frontiers" policy and the "Alliance for Progress") evol ed, when it encountered the NIEO issue, into a recognition of the need for specific reforms in capitalist economic relations, the stronger international regulation of the capitalist economy, a slightly important role for the developing countries in the regulation process, etc. These countries, regardless of the level of their development, were viewed by Washington as an integral part of the capital- ist system. Furthermore, whereas certain concessions to the more highly developed young states or those with the richest natural resources appeared to be vitally necessary, aid and “special privileges” to the poorest were viewed as an essential condition for the "social peace" of the entire system.

The Carter Administration's approach to the NIEO issue was based on these premises and had the following distinctive features. Above all, it was a global approach. The administration regarded the reorganization of international economic relations as one of the most important global problems in whose resolution the United States should take the leading role in order to reinforce its global positions and estab- lish a new variant of the "Pax Americana" in the future, this time on the basis of interdependence. The reorganization was intended to strengthen integration processes in the world capitalist economy, which were to focus on the developed Western countries, headed by the United States, and reinforce the capitalist

basis in the developing countries. At the same time, the reorganization was intended to bring about the more active "involvement" of the socialist countries in this economy.


Another distinctive feature of the Democratic approach to the NIEO was Washington's view of interdependence in the global reformist context as the antithesis of strong state sovereignty for the developing countries. It has begun to view the entire non-socialist world as an arena of collective efforts aimed at economic development based on the principles of private enterprise. For example, when former U.S. Representative to the United Nations D. McHenry spoke at the 34th Session of the General Assembly (1979), he said that the practice of dividing states into developed and developing -ountries should be abandoned in favor of a "spectrum" of development. All countries and even specific regions in these countries supposedly occupy specific places along this spectrum, and con- stant ascent is the common objective, 13 The United States countered the most important principle of the NIEO, the sovereign equality of states, with the con- cept of the “equality of individuals." It announced that the strategic purpose of the reorganization of international economic relations and, consequently, of the talks on the NIEO would be the achievement of bourgeois "equal opportunities" for all "citizens of the world," accompanied by the gradual eradication of state sovereignty and the reinforcement of supranational global organizations.

In this area, the United States is endeavoring to consider the increasing socio- economic and political differences between developing countries. Some of them are developing according to the capitalise pattern. In states with a socialist orientation, on the other hand, the development of capitalism has been deliber- ately restricted by progressive reforms, and in the majority of liberated countries it is being restricted by the weight of pre-capitalist traditions.

In the case of the first group of states, the concessions the United States was prepared to make with regard to the NIEO were viewed primarily as a means of bringing about the overall improvement of relations, within the context of which stronger pressure could be exerted on some of them to safeguard bourgeois demo- eratic "human rights" (Chile and South Korea) or, in other words, to bring about some liberalization of reactionary regimes. As for the other developing countries, the satisfaction of the "basic needs of the individual" has been demanded in exchange for these concessions instead of "human rights."

The elevation of the concept of "basic human needs" to the leve! of official policy in questions pertaining to "aid" to the developing countries was the third distinctive feature of the Democrats’ approach to the NIEO. This concept stresses the need to "increase the productivity of the poor.” In rural areas this would mean that the poor would have to be given access to land, credit, elementary medi- cal services and education. In industry, the stimulation of small enterprises with labor-intensive technology was proposed. This war supposed to guarantee the growth of agricultural and industrial production, employment and the income of most of the population, lower the birth rate, etc. The “basic needs” strategy

was intended to stimulate the development of small-scale private production, increase the number of small property-holders and thereby guarantee the capitalist development of young states. In contrast to the policy of the 1960's, this strategy, which stressed the developmat of small-scale agricultural and indus- trial production and preached the idea of renouncing large-scale industrialization, was supposed to take the productive forces of the young states out of the devel- »pmental mainstream. In this way, the objective interests of their development were to be sacrificed for the maintenance and spread of capitalist production relations. The Carter Administration slightly increased government aid to the


developing countries for such purposes as food production, education and public health in an attempt to use bilateral ties and the NIEO talks to force ruling circles in these countries to commence socioeconomic reforms in line with this strategy.

In this way the United States actually countered the NIEO program with its own,

far from equivalent "new world order," which could be described as "Americanocentric international interdependence." Nevertheless, the Democrats’ slightly more con- structive overall approach to the reorganization of international economic rela- tions and some of its basic principles (for example, the recognition of the

specific interests of developiag countries and the need for the stronger inter- national legal regulation of the world capitalist economy and a stronger role for international organizations) afforded certain opportunities for compromise.

The Results of the 1970's

As a result of long and difticult talks, certain compromises had been reached on some of the developing countries’ demands by the end of the Democratic administra- tion's term in office. In June 1980, for example, an agreement was concluded within UNCTAD on the creation of a general raw material fund.!4 Under the pressure of the United States and other Western countries, the developing states decided

not to assign the fund the function of overseeing t.e implementation