ABSTRACT
This chapter aims to discern some fundamental forces underlying East-South economic interactions. It provides what kind of implicit international division of labor has evolved between East and South. There is an underlying trend in East European countries for the labor force to become increasingly scarce and increasingly expensive, especially if one takes into account the sluggish productivity growth. A set of "environmental factors" conditioning the prospective evolution of East-South economic interaction is related to changes in the major trading areas of the individual socialist countries. With respect to the Council of Mutual Economic Assistance (CMEA), the important variable will be the rapidity of the integration process. Perhaps the most controversial element of East-South economic relations is the aid provided by the CMEA countries to the Third World. As is well known, in their official statements the socialist countries invariably disclaim any responsibility for the existing conditions of the South and consequently reject all demands for targeted and automatic resource transfer.
