Page:NATIONAL INTELLIGENCE SURVEY 18; CZECHOSLOVAKIA; GOVERNMENT AND POLITICS CIA-RDP01-00707R000200110010-2.pdf/40

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greatly stepped up the pace of housing construction since the beginning of the plan period.

There was evidence throughout 1973 that reforms in wages, prices, and managerial techniques were being debated. For one thing, the Czechoslovaks are paying a good deal of attention to Hungary's liberal economic reform program, the so-called New Economic Mechanism. Within the past year, every major domestic economic periodical has discussed one or another aspect of the Hungarian reforms. The Party Central Committee has also approved a new system for selecting top-level managers, and an experimental wage system, tying wages to productivity, is being tried in a few industries. Heavily backed by Premier Strougal, this system is likely to be introduced more generally in the next Five Year Plan. The political rationale for such economic reforms in Czechoslovakia would presumably be that similar reforms were approved by the 13th Party Congress in 1966 and that "revisionists" like Ota Sik, Dubcek's chief economic theoretician, deviated from the guidelines. In any case, really sweeping changes are not likely, and any reform that is enacted will be kept under strong party control.

2. Foreign

For over a decade after the Communist takeover in 1948, Czechoslovakia was Moscow's model satellite and consistently pledged its steadfast loyalty to the Soviet Union. The Czechoslovak Communists' subservience to Moscow stemmed from both the ideological affinity between the two Communist parties and from the belief that Soviet military power provided security against a renascent Germany. Popular disillusionment with the West over the abandonment of Czechoslovakia to Nazi Germany in 1938 and the fact that most of Czechoslovakia was liberated by Soviet troops in 1945 played into Communist hands in the early postwar years. Czechoslovakia was a signatory to the Warsaw Pact in 1955 and, in the name of "mutual cooperation," structured its economy to meet Soviet requirements and those of the Council for Economic Mutual Assistance (CEMA)—the Soviet bloc economic organization, created in 1949. Czechoslovakia also played a leading role in expounding bloc policies in various international forms.

Popular disenchantment with communism came early after the 1948 coup, mainly from the bloody purge trials of the early 1950's. The leadership's close political relationship with Moscow, however, was not jarred until the de-Stalinization campaign, launched by Khrushchev at the Soviet Party's 20th Congress in 1956. Czechoslovak party leaders, notably First Secretary Novotny, had acquired their positions of power through close association with the Stalinist leadership in Moscow and were loathe to divorce themselves from the pro-Soviet policies and orthodox style of leadership upon which their power had rested.

Nevertheless, by 1963 domestic pressures for economic and political reform, abetted by the general "de-Russification" among Eastern European countries then going on, had risen to the point where Novotny was forced to initiate his own belated de-Stalinization campaign. Responding to the Czechoslovaks' growing awareness of their own national interests, the Novotny regime became less inclined to follow unquestioningly the Soviet lead on even minor issues of domestic and foreign policy. It was not until 1968, however, that Czechoslovak foreign policies challenged Soviet interest beyond limits acceptable to Moscow. Indeed, Dubcek's domestic reform that threatened the Communist Party's monopoly of power was only partly the reason for Moscow's decision to terminate the "Prague Spring" by force. Equally if not more important were clear signs that Dubcek was permitting the country to wrest itself free of Soviet hegemony in Eastern Europe, possibly to withdraw from the Warsaw Pact, and, ultimately, assume a form of "neutralism" that was freely discussed in Prague in the late summer of 1968.

Following the invasion, foreign policy was most immediately affected. Indeed, after August 1968 and until late 1972, Czechoslovak foreign policy did not exist except as a function of Soviet diplomatic interests. By early 1973, however, the Husak regime's success in domestic "normalization" coupled to overall Soviet policies of detente in Europe, had produced signs that Moscow was permitting the Czechoslovak regime to play a more active international role in support of Soviet goals, as well as to enhance Prague's own legitimacy in the world arena. While the basic elements of Czechoslovak foreign policy continue to be made in Moscow, the factor of self-interest is increasingly evident in the conduct of Czechoslovakia's diplomacy.

Despite these small signs of a limited increase in Prague's room for maneuver, the Soviet tether remains short. Foreign Minister Bohuslav Chnoupek (Figure 12) is a confirmed and capable hardliner. Chnoupek publicly criticized Dubcek's reforms in early 1968, and after the invasion, as director of Czechoslovak Radio, turned it into the most dogmatic medium in the country. He subsequently served as ambassador to Moscow until his appointment as foreign minister. Chnoupek shares management of foreign affairs with

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110010-2