Soviets Tell Comecon It Must End Isolation

The Soviet Union today proposed that the Comecon trading bloc begin trading on a hard currency basis at world prices next year to end four decades of isolation from the world economy.

The proposal came on the first day of a private meeting of Soviet and Eastern European leaders, joined by leaders of Mongolia, Vietnam and Cuba. East European leaders welcomed the idea but said it should be implemented slowly.

Comecon officials who briefed reporters after the session said the Soviets suggested hard currency trading at world market prices begin in 1991, replacing trading in the non-convertible Soviet ruble.

Members of the 10-nation Soviet-led trading bloc, founded in 1949, have agreed that a radical overhaul is needed if the group is to survive and keep pace with changes under way in Eastern Europe, where democracy is taking hold and members are abandoning central planning.

Vladimir Dlouhy, a reform Communist who chairs Czechoslovakia’s state planning commission, told reporters the Soviet proposal would be “a disaster” if introduced immediately and said a transitional period is essential.

Poland’s non-Communist prime minister, Tadeusz Mazowiecki, said the transition period for fuels and raw materials should run until 1995. Other trade should be carried out on the basis of bilateral agreements, Mazowiecki said.

Moscow’s East European allies traditionally have relied on Soviet raw materials as their chief source of fuel and raw supplies for their industries.

Today’s meeting was the first since last month’s ouster and execution of Romanian dictator Nicolae Ceausescu and the decline of Communist power elsewhere in Europe.

Founded in 1949, Comecon--the Council for Mutual Economic Assistance--provided Josef Stalin’s Soviet Union with a mechanism for extracting favorable trade agreements from client states.

Forty-one years later, the Soviet Union under Mikhail S. Gorbachev has cut loose Warsaw Pact states it once kept in the fold by force and Comecon will thus crumble if the trade relationships within it are not reforged.

Trade relationships within Comecon had been based on agreements between state-owned industries in centrally planned economies that did not work. Observers said Comecon must now either adjust to the dismantling of such economic systems, already well under way in Poland and Hungary, or perish.

The meeting’s agenda included coordination of economic plans for the next five years, which would at the outset create a conflict.