Soviet foreign economic strategy: departmental projects and bureaucratic mechanism (late 1950s - first half of 1960s)

The article analyzes the foreign trade of the USSR and the role played by the central bodies of the Communist Party of the Soviet Union (CPSU) and the Soviet government in its management during the first half of the 1960s. The documents of the CPSU Central Committee used as the main sources help the authors to reveal the decision-making mechanism in the area of foreign trade during Khrushchev’s reforms. The authors argue that the Soviet foreign trade thanks to Khrushchev’s efforts turned into a pillar of the World Socialist System (the Eastern Bloc). Apart from being an ideological matter, it meant a considerable foreign currency revenue for the USSR’ s budget. The inflow of foreign currency coming from the USSR’s export accounted for the growth of imported goods, including those industrial products that were not manufactured in the USSR. The increased imports volumes commensurately triggered bigger foreign currency expenditures. By the early 1960s the leadership of the CPSU and the USSR were fully convinced about the necessity to boost the production of the most profitable export goods. Crude oil became the key export commodity. However, the USSR’s oil export was faced with the shortage of such technologies that were able to expand the extraction and delivery of hydrocarbons. As a result, modern equipment and large-diameter pipes were regularly purchased from capitalist countries for the construction of main pipelines. After the NATO’s imposition of an embargo on large-diameter pipes in 1962 and the agricultural crisis of 1963 Khrushchev made an attempt to dramatically change the strategy of the Soviet foreign trade. He suggested switching from crude oil exports to chemicals. However, he failed to implement his idea underestimating the fact that the cheap crude oil export was far too attractive and alluring to Soviet bureaucracy as well as to the leadership of the Eastern Bloc.