By NATHAN MARGOLIN

. Prices on all goods and ser-
vices in the Soviet Union are
fixed by government bodies.
This function is performed by
the State Committee for Prices
of the USSR Council of Minis-
ters and the respective price
committees under the govern-
ments of Union Republics. They
exercise tight control over the
observance of the prices fixed.

These control methods, per
se, would not be sufficiently
successful if there were no ob-
jective economic conditions for
price stability. In the USSR
these conditions are provided
by planned and well-balanced
economic development, by the
deficit-free state of the budget,
and the planning of credit oper-
ations and money circulation.

The Soviet Union has attain-
ed a fast rate of economic de-
velopment in conditions of
stable currency. From 1950
through 1970 the mean annual
growth of the national income
came to 8.7% and the growth
of industrial output to 10.1%.
There has been no unemploy-
ment in the country for over 40
years now. This disproves in
practice the view that a moder-
ate inflation promotes fuller
employment.

Gold Content

' After the October Revolution
of 1917, the young Soviet Re-
public had for several years to
wage a struggle against devas-
tation in its national economy.
At that period the country ex-
perienced significant monetary
and financial difficulties. The
stability of the rouble was not
attained at once, but only in the
process of economic rehabilita-
tion and socialist construction.
A number of currency reforms
enhanced the rouble’s stability
which continued to grow from

year to year. In early 1961, the -

gold content of the rouble was
fixed at 0.987412 grams of pure
gold. It is this gold content that
determines the rate of exchange
of the rouble, which underlies
its exchange for the currencies
of other countries by the USSR
State Bank.

But the stability of the rouble
is supported not only by the gold
basis. Its purchasing power is
steadily growing, too. The post-
war period saw an_ intensive
reduction of retail prices in the
USSR. From 1948 to 1954 the
retail price index diminished by
57%. Then it was deemed pre-
ferable to go on raising the
population’s living standard by
raising wages and salaries, pen-
sions and other social benefits
and grants, maintaining the sta-
bility of the average level of
retail prices and tariffs on all
services, including rent.

For instance, the mean wages
and salaries of industrial and
office workers increased from

1956 through 1960 by 12%,
from 1961 through 1965 by
20%, and from 1966 through

1970 by 26%. In the past fifteen
years they increased by 69% in
‘all. This was accompanied by a
growth of expenditures by the
state and individual enterprises
for public education, medical
services, maintenance of chil-
dren at creches and kinder-
gartens, pensions, sick pay, and
other social purposes. These ex-
penditures increased by more
than four times from 1955
through 1970.
The ‘Soviet~ Union has a: plan-

ned economy, and this provides
the foundation for monetary
stability. The long-term and cur-
rent plans of production are
drafted in harmony with soci-
ety’s requirements. This allows
the balancing of demand and
supply.

- The deficit-free budget of the
country is also a guarantee of
the “Soviet rouble’s _ stability.
More than 90% of budget reve-
nues come from_ state-owned
and cooperative enterprises. The
state budget is regularly admin-
istered with an excess of re-
venues over expenditures. In
1969 this excess added up to
2,200 million roubles, in 1968 to
1,500 million roubles, and in
1970 to 1,600 million roubles.
The free funds of the state
budget, kept at the USSR State
Bank, serve as an important
source of short and long-term
credits to the national economy.

Thorough Control

When credits are granted to
enterprises, a thorough check-up
is made of how effectively from
the viewpoint of society’s inter-
ests these credits will be used,
and whether the respective en-
terprises are capable of using
them on time and of returning
them subsequently. In other
words, the banks exercise, in
the first place, economic control
over the activity of enterprises,
encouraging them to spur ef-
ficiency. Second, the banks de-
termine the size of loans and
the terms for which they are
granted, coordinating them with
the movement of material
values. This eliminates the dang-
er of the appearance of an in-
flationary situation due to ex-
cessive credit grants.

The issue of money into cir-
culation is rigidly controlled in
the USSR. It is determined by
the actual requirements of the
growing trade concentrated at
the State Bank. All cash anti-
cipated to come in and all is-
sues of money can be taken into
account beforehand. This is
quite logical, for this is deter-
mined by the plans of retail
goods turnover and development
of the sphere of services, by
wage funds and other plans in-
dicators. Drawing on all these,
the State Bank drafts its plan
of cash turnover.

State monopoly of foreign
trade and the invariably favor-
able foreign-trade balance (ex-
cess of exports over imports)
exert a positive effect on the
state of Soviet currency.

Socialist Countries

Settlements among the social-
ist countries that are members
of the Council for Mutual Eco-
nomic Assistance are effected

‘by means of their collective

currency — the _ transferable
rouble. This rouble, which has
the same gold content as the
Soviet rouble, plays an impor-
tant role in thé socialist coun-
tries’ economic cooperation. The
comprehensive program of deep-
‘ening and streamlining coopera-
tion and developing socialist
economic integration, adopted
not long ago by the 25th ses-
sion of the Council, contains
measures for further strengthen-
ing the transferable rouble.

Among these measures are
those of introducing the conver-
tibility of the transferable rouble
into the national currencies of
CMEA countries and the reci-
procal convertibility of national
‘currencies.- © “+:

PACIFIC TRIBUNE—FRIDAY, FEBRUARY 11, 1972—PAGE 4

Bangla Desh grateful

By SPARTAK BEGLOV

MOSCOW The Soviet
Union’s statement on the recog-
nition of the People’s Republic
of Bangla Desh as a sovereign

state and on the readiness of the
USSR to establish diplomatic
relations with the young repub-
lic is a de jure action which
crowns the Soviet policy tow-
wards Bangla Desh that has
been conducted de facto in the
course of recent months.

The new republic has born in
war and torment, it was forged
in the crucible of the liberation
struggle. Passing through incre-
dible trials, the people of Bangla
Desh had a chance to learn who
are their sincere friends and
who are enemies of their strug-
gle for national liberation.

Immediately after the terrible
events of the end of March 1971,
the Soviet Union openly con-
demned the repressions started
by the Yahya Khan military
regime against the people of
East Bengal. When the libera-
tion struggle in Bangla Desh
reached, its critical point and
the people’s resistance was sup-
ported by the liberation mission
of the Indian Army, the Soviet
Union took a resolute position
against the attempts that were
made to use the United Nations
to save the bankrupt policy of
the Yahya Khan regime.

Deeds speaks louder

than

Friends proved

tion.

words. Nobody will forget that

-it was at this time that the

sinister alliance between Wash-
ington and Peking took con-
crete shape in their joint diplo-
matic. opposition to the just
cause of Bangla Desh.

A friend in need is a friend
indeed. When I recently visited
Bangla Desh I heard these words
from many people. The presi-
dent of the new republic, Abu
Chowdhury, stressed in a talk
with me that the Soviet. Union
“by its every word, by its every
step was doing everything to
support the people of Bangla
Desh at the time of decisive
trials.” Prime Minister Mujibur
Rahman told me that the people
of Bangla Desh would always
remember everything that the
Soviet people and the Soviet
government had done for the
success of the national libera-
tion struggle of the people of
Bangla Desh.

“Convey my words of good-
will, friendship and ‘coopera-
tion,” he said. “I am sure that
our peoples and countries will
remain friends.”

This assurance of the strong
ties which bind the two peoples
is confirmed not only by past
experience, but also by common

The “Secretariat,” Dacca, the seat of government of the new People's Republic of Bangla D

A busy street in Dacca. Life returns to normal for the 75 mm
people of Bangladesh, who have begun to consolidate their It

- ful democratic republic.

q

interests in the present}
future. The peaceful 1%
policy and the socialist 0m
tion in domestic affairs
laimed by the new republic
been met with satisfactlo
the Soviet Union. The 50
world has shown its 5!
support of the young Staly\
being among the first to ™
nize Bangla Desh. \
(In contrast, China has 0
drawn its diplomatic and fS
personnel from Daeca.—®
Everybody who haS Wi
sed recent events im
Desh is left with indelibly
pressions. The feelings ®)
and pride of the people
have taken their destiny}
their own hands is quite
standable. At the same Um
cannot but feel deep Sy}
for the grief of millions ©
ples who in the black 2)
repression lost their deal}
and whose homes were des)
ed. Many complicated pro!
face Bangla Desh. It still
true friends. :
The Soviet Union stam
gether with the people of BM
Desh and wishes them P)
prosperity and’ success}
strengthening their state]
ereignty and in building 4 PR

a
4
\