Analysis Of The Causes And Results Of The Cmea Reform

The Council for Mutual Economic Assistance (CMEA) was the economy Friendly society established by the Soviet, Romania, Czechoslovakia, Bulgaria, Hungary, Poland six countries in January, 1949. The stated purpose of the organization was to enable member states to exchange economic experiences, to extend technical aid one another, and to render mutual assistance with respect to raw materials, food stuffs, machines, equipment, etc. Although CMEA achieved obvious achievements, but CMEA interior problems should not be ignored. Along with CMEA interior problems increasing, member states carried on reforms many times. But because of the member states' different benefit and understanding, the reforms were only adjustment and consummation to certain concrete procedures, but not the thorough reforms. Finally, the CMEA could not deal with the challenge of new technological revolution, along with Eastern European political powers' alternation, it also collapsed.The text of this paper includes five chapters:Chapter 1: Introduction of the CMEA's establishing reasons. The United States proposed Marshall Plan in the post-war, the Soviet Union need to strengthen the influence in Eastern Europe for his economic security interests. Because the Soviet Union and Eastern European countries had disparity of national strength, East European countries had to close with the Soviet Union, and also intended to expand economic cooperation with Soviet Union to develop their national economy.Chapter 2: Due to different national conditions, levels of economic development, it is difficult for the CMEA member states to reach an agreement of economic policy. The economic guiding ideology's backwardness and the CMEA bilateral trade issues, so the reform was needed. Khrushchev proposed the establishment of the supranational authority CMEA. The paper focuses on the reform's reasons and results. On the one hand, Soviet Union would like to reduce economic trade pressure between Soviet Union and Eastern Europe countries; On the other hand, Soviet Union would like to avoid the EC's economic security threats. And Eastern European countries also wanted to the supranational authority CMEA to shake off the economic downturn, the decline in economic growth rates, and other issues. In the end, Romania and other Eastern European countries have rejected the establishment of the supranational authority CMEA, mainly because Eastern European countries feared that the establishment of CMEA supranational authority could not solve the interests between them and Soviet Union, and national economy out of control.Chapter 3: In the 1970s, due to the relaxation of East-West relations, not only within the CMEA's trade developed very quickly, but also CMEA with the West of trade also had greater development. CMEA's problems still existed. The rate of economic growth declined. Bilateral trade and price caused a lot of problems. CMEA member states thought CMEA should strengthen economic integration. The Soviet Union, due to the economic security interests, needed to strengthen CMEA's economic integration. And Eastern European countries, due to trade setback with the West, and the pressure from the EC, needed to strengthen CMEA's economic integration. So CMEA strengthened economic integration and has made great achievements. Not only expanded the trade between the member states, but promoted the member states' economic growth, and people's living standards.Chapter 4: In the 1980s, CMEA faced serious socio-economic crisis. Because of Soviet Union's socio-economic stagnation, the economy deformities and various profound internal contradictions, its comprehensive national strength has declined; the gap has expanded between it and the developed capitalist countries. Eastern European countries were also at their own energy shortages and crisis of lack of institutional efficiency and backward technology. This phase was full of reform and controversy. Gorbachev made a number of reform measures, but because the Soviet Union and Eastern European countries wanted to "return to Europe", and joined into the world economy, fearing that CMEA hindered its accession to the World Economic, they abandoned CMEA. The main reason was that the Soviet Union's national strength fell, unable to bear the leadership responsibility in economic cooperation, and eventually led to CMEA's dissolution.Chapter 5: After CMEA dissolution, member states have suffered great economic damage. Soviet Union collapsed, the former Yugoslav civil war erupted, Czechoslovakia split led to collapse of trade; the Eastern European countries joined European Union to be difficult. Former CMEA countries have seek to work with the surrounding areas for their economic cooperation and development, and have appeared many regional economic organizations which played a big role for the former CMEA country's economic development.Conclusion: Summary of CMEA reform and failure reason. The paper points out that the CMEA's dissolution is only disappearance of a way of economic cooperation, rather than the end of regional economic cooperation. The current regional economic cooperation is the mainstream of economic development. Each country must first learn cooperation with neighboring countries and jointly develop the economy in the context of economic globalization.