Max Trecker's Red Money for the Global South brings us closer to a truly transnational history of the Soviet bloc by examining the attempts of the Council on Mutual Economic Assistance (CMEA) to build a coordinated multi-state approach to trade with the developing world that would both create economic advantages for the socialist bloc and tie countries to its economic and thus political orbit. Trecker shows us that the attempt to integrate CMEA was intimately tied to a project of CMEA cooperation with the Global South. In tracing this project Trecker explores how CMEA integration was closely connected with larger changes in the global economy.
Red Money for the Global South packs a surprising range of content into a relatively slim volume. The book's argument is divided into four sections that are organized around stages in CMEA's evolution as an institution in the context of a changing Cold War and global economy. The book opens with two chapters that examine the origins of CMEA and the framework in which CMEA countries engaged with the Global South. Trecker argues that as part of his reaction to Stalinism, Nikita Khrushchev attempted to use CMEA to facilitate a genuine political and economic integration that at its start, focused on building ties within the socialist bloc and with the developing world. Early on, the socialist bloc pursued a policy of development through wholesale transfers of capital stock to encourage rapid industrialization. CMEA also emphasized barter trade to exchange capital stock for commodities in order to conserve foreign exchange and satisfy the need of the Soviet bloc for products that could not be made domestically.
The second section of the book proceeds to examine east-south relations in the next stage of CMEA's evolution, the 1971 “Complex Program for the Consolidation and Perfection of Socialist Economic Integration and CMEA Countries.” The “Complex Program” shifted from integrated economic planning to encouraging joint investments by multiple CMEA countries within the boundaries of either other CMEA member or developing countries. Tecker examines the difficulty of this new approach through a case study of a joint East German-Bulgarian investment project to establish a cement industry in Syria. This was a mutually advantageous relationship for all parties involved. Syria would get a cement industry that would allow more national self-sufficiency and the German and Bulgarian imports of necessary goods. However, the project was a nightmare because of the difficulty of coordinating between the mutually hermitized East German and Bulgarian economies. Yet, despite many failures, CMEA members did construct a plant in Syria and established a native concrete industry.
The book proceeds to chronical the “golden age” of CMEA-south cooperation that occurred in the mid 1970s to early 1980s. This period coincided with high energy prices that both restricted the credit that western firms could offer due to high input prices and allowed many developing countries to suddenly have access to credit. In this context, CMEA improved its practices by adapting formal trade agreements with governments in the Global South. The two chapters that make up this section try to examine the interests of both CMEA countries and their counterparts in developing long-term economic relationships. It is clear that for the Soviets and their CMEA allies, the key drive to engage in economic relations with the developing world was shifting from the political idealism of the Khrushchev era to the need to diversify sources of commodities away from the Soviet Union.
Tecker concludes with a discussion of CMEA's transformation in the late-1980s. These chapters document the effect on CMEA trade strategy of the radical reforms in the socialist bloc with the pressures of a global financial contraction in the wake of the sharp rise in interest rates and collapse of energy prices. As CMEA integration and interaction with the Global South continued, Socialist countries became interested in gaining profits in hard currency from their ventures. This was especially true for less developed CMEA countries who needed markets for exports to sustain their own borrowing in global capital markets. When the decades’ developing world debt binge turned into a sovereign debt crisis, CMEA creditors were last in line to have their loans repaid. This narrative animates a case study of CMEA projects in the Indian steel industry led by the USSR in conjunction with Czechoslovakia and East Germany. While initially maintaining a political priority to support India's industrialization and its pro-Soviet stance, these projects began to slowly become explicitly tied to the need for hard currency.
Red Money for the Global South breaks ground by documenting intertwining east-east and east-south relations. Trecker covers a vast amount of material, which is challenging enough. However, at times the book makes many diversions into theoretical corners that are tangential to the main narrative. Also, a deeper engagement with recent literature on Cold War development policies could have made the book's extremely valuable contribution more obvious. These small issues aside, Red Money for the Global South is an achievement and worth reading for anyone interested in the history of the Cold War.
