International Accounts

monetary accounts among enterprises, institutions, banks, and individual persons in different countries. These accounts service foreign trade, credits, investments, transportation services, tourism, the maintenance of diplomatic representatives abroad, business trips, trips by delegations, and various kinds of transfers of money abroad (such as profits, royalties, pensions, and alimony). The international accounts among the capitalist countries typically involve a high percentage of speculative transfers of monetary capital seeking the most profitable investment.

The mechanism of international accounts took shape gradually as international economic links developed. Foreign trade accounts are the most important form of international accounts. At first, charges were settled directly between the exporter and the importer by the payment of currency. With the growth in international trade, the increased complexity of economic links, and the development of credit and credit means of circulation and payment, international accounts are increasingly serviced through banks on a noncash basis.

The principal means for using international accounts are telegraph and mail instructions to pay, checks, bills of exchange, instructions for collection, and letters of credit. The currencies of the chief capitalist countries act as a means of payment among the capitalist countries. The primary mediums of international payments are US dollars and British pounds sterling. In the early 1970’s, the increasing instability of these currencies meant that the West German mark, the Japanese yen, French and Swiss francs, and numerous other currencies became more important in international accounts. One of the typical characteristics of the capitalist countries’ international accounts under present-day conditions is the demonetization of gold and its replacement in international payment circulation by depreciated national and international means of circulation and payment (including Special Drawing Rights). This situation considerably increases the difficulty of settling international accounts among capitalist states.

International accounts involve the exchange of certain currencies for others and the purchase of foreign currency. The rates of exchange thus play an important part. A considerable disruption in the system of international accounts of the capitalist countries was caused by the significant changes in parities and the fluctuations in the rates of exchange for most of the capitalist countries that resulted from the aggravation of the currency crisis in the late 1960’s and early 1970’s. This disruption was expressed in the increased imbalance in the international accounts of the capitalist countries, a drop in confidence in the currencies of the leading capitalist countries, and a sharp increase in currency speculation.

The international accounts of the socialist countries are built on the basis of the development of planned and long-term forms of mutual economic cooperation. Thus, the mutual accounts of the socialist countries can be serviced by balancing off mutual demands on a broader scale than is possible under capitalism.

As of Jan. 1, 1964, accounts among the countries of the Council for Mutual Economic Assistance (COMECON) have been settled within the framework of the system of multilateral accounts expressed in the international collective socialist currency (transfer rubles) through the International Bank for Economic Cooperation and the International Investment Bank. The Comprehensive Program of Socialist Economic Integration, which was adopted by the 25th session of COMECON in July 1971, envisions further refinement of mutual payment relations among COMECON countries in accord with the goals and tasks of socialist economic integration in all the stages of its development.

International accounts between the socialist countries and the capitalist countries are settled on the basis of bilateral payment agreements that establish the system for managing settlements, the settlement currency, the system for keeping accounts, and so on. Accounts between the socialist countries and the developing countries are in most cases on a clearing basis, but there are also pure payment agreements and mixed payment-clearing agreements.