BUSINESS ABROAD: Iron Curtain Speculations

In a Prague court last week, a Czechoslovak entrepreneur named Roman Novotny drew a stiff sentence of 4½ years in prison and forfeiture of all his property for engaging in one of the most profitable —and widely practiced—businesses behind the Iron Curtain. With a group of friends Novotny rounded up 56 used cars of various makes in the first six months of 1957 alone, sold them at up to double official prices set by the Communist government. Chided Radio Prague: "The speculators exploited the impatience and lack of discipline of the citizens."

Car-hungry citizens behind the Iron Curtain may well be impatient and undisciplined. More than 50,000 Czech citizens have managed to save the down payment of 20,000 kroner ($2,800) to get their name on the state waiting list for a new auto, but only 19,000 cars (out of a production of about 40,000) will be available for citizens this year. The rest will be shipped abroad to get precious foreign currency, or turned over to party members. Even at the official price tag of 27,000 kroner, a new car represents almost 100 weeks' wages for the average Czech worker. In the case of the Tatra, which the Czechs intend to produce again this year after a long interruption, the price will be 200,000 kroner—$28,000 at the official exchange rate.

Elsewhere behind the Iron Curtain, the situation is even blacker. Secondhand autos of every make, year and origin are quickly snapped up at astronomical prices, e.g., $5,000 for a tiny secondhand Renault. The price of 90,000 zlotys ($22,500 at the official rate of exchange) for a new Warszawa represents 250 weeks' work for a Pole. Hungarians, Bulgarians and Rumanians, who manufacture no cars of their own, must set their sights on imported Russian Pobedas, which cost them the equivalent of from 130 weeks' work to 750 weeks' work (in Rumania), depending on the currency. Even at that price, they have very little chance of getting a car: in Russia, where only about 100,000 automobiles are produced each year, there is a waiting list of 200,000 prospective buyers.