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For all that, some Western financiers in recent weeks have begun to express discreet concern about Comecon's mounting pile of debt. The Basel-based Bank for International Settlements has noted that the ratio of debts to exports —which determines a country's ability to repay loans—has reached a high level in some Communist countries. Bank of America, Citibank, Chase Manhattan and Manufacturers Hanover all conspicuously took no part in a recent $250 million loan to the Soviet Union's Foreign Trade Bank. Some Western banks are also trying to raise interest rates charged to Communist borrowers. They had been tacking a 1.25-percentage-point premium onto whatever rate they had to pay to borrow funds to relend in Eastern Europe. Now some are demanding a 1.5 premium.
Eastern European officials too are getting concerned about their deepening debt and have started programs to cut imports and increase exports. Inevitably, that will require some belt tightening as resources are shifted away from the consumer sector. Already, imports of various Western goods, ranging from Scotch to steel, are being reduced.
Capitalist Partners. The effort to boost exports has pushed some Communist nations into a further affront to ideology: inviting capitalists in as partners to make their industries more efficient. In Hungary, for example, Corning Glass Works of the U.S. owns 49% of a Hungarian company that will produce blood gas analyzers and Sweden's Volvo has a minority share in a vehicle-production plant.
Above all, Eastern Europeans are beginning to understand they must improve the quality of their goods if they hope to sell enough abroad to pay for more of their imports. Says Karoly Ravasz, a Hungarian official: "Instead of ordinary lathes, we must produce precision machinery. Instead of textiles that sell in flea markets, we want to sell fashionable clothes." Only in that way can the Communists avoid going much deeper into hock to the West.
* Bulgaria, Czechoslovakia, East Germany, Hungary, Poland and Rumania.