WEEKLY SUMMARY SPECIAL REPORT ROMANIA'S FLIRATION WITH REFORM

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Romania's Flirtation with Reform
Secret
Na 40
30 April 1971
No. 0368/71A
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On 8 May the Romanian Communist Party will celebrate its fiftieth anniver-
sary. On this festive occasion the party will ballyhoo its own achievements, including
the seizure of power in 1944. More importantly, the present youthful party
leadership under General Secretary Nicolae Ceausescu must give a good account of
its six-year tenure. I n preparation for this milestone in the party's history, as well as
for launching a new five-year plan, Ceausescu and his coterie have engaged since the
first of the year in a whirlwind of speech-making, factory-touring, and hand-shaking.
Not since the fall of 1968, when he ardently wooed the populace to gain support for
his defiance of Moscow in condemning the Warsaw Pact's intervention in Czech-
oslovakia, has Ceausescu politicked domestically with such intensity.
Gomulka's fall from power during the upheavals in Poland last December has
clearly influenced the tenor of Ceausescu's recent campaign. This is particularly
evident in his emphasis on reinforcing the party's direct contact with the masses.
The specter of the Polish disturbances took on added significance in Bucharest
because Romania's own economic problems have increased greatly over the last few
years. Nonetheless, it is obvious that Polish events have not altered Ceausescu's
conviction of the correctness of his own style of Communism. He may be extremely
pragmatic in foreign policy, but he is essentially conservative in domestic matters.
Ceausescu has pegged Romania's continued political independence to the
building of a strong and viable economy. With this in mind, he unveiled before a
national party conference in late 1967 a set of cautious proposals for "improving
and perfecting" economic management and planning. Only a few of these proposals
have been effected, and most problems remain undiminished. Although Ceausescu
obviously has become increasingly frustrated with the mediocre performance of the
economy, he is apparently not willing to deviate sharply from the original plan of
1967. Seemingly he has given no serious consideration to going the route of
Yugoslavia or Hungary by allowing pricing and other market forces some play in the
economy.
For now, Ceausescu and his technocratic colleagues will continue to rely
mainly on agitation and propaganda to try to get the economy moving again. The
upcoming anniversary celebrations and another national party conference slated for
sometime this summer will provide appropriate forums. At this point, the possibility
that the regime will embark on a truly liberal economic program seems remote
indeed.
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In December 1967, Nicolae Ceausescu had
been at the head of the party for about a year and
a half, long enough to make his personal presence
felt, but not long enough to establish absolute
political control. Ceausescu still shared the top
leadership with several old cronies of the former
party leader, Gheorghe Gheorghiu-Dej. One of his
motives in calling a national party conference at
that time was to put his own stamp on Commu-
nist party policies and to differentiate his rule
clearly from that of his former boss. Some of the
changes he proposed at the conference were de-
signed to allow him to take complete control of
the patronage system of the party, to remove
from positions of influence those who might op-
pose him, and to replace them with younger and
more able men who would be obligated to him.
Moreover, at that time, the trend in Eastern
Europe was toward economic and political re-
form. Although the Romanian leadership was
careful not to call its program a reform, it was
certainly cognizant of the need to appear more
modern and flexible, particularly to its Western
creditors and other potential non-Communist
sources of advanced equipment and technology.
Nevertheless, Romanian planners and leaders
remained true to their orthodox and conservative
outlook. Ceausescu, in his speech to the 1967
conference, carefully emphasized the primacy of
the party, and indicated that his tinkering with
the economic levers in Romania would remain
within established socialist bounds. Implicitly re-
jecting unorthodox innovations already in effect
in Yugoslavia and advocated by some economists
in Czechoslovakia, he stated flatly that "we can-
not support theories to the effect that a socialist
economy should regulate itself in a spontaneous
manner on the basis...of free market" mech-
anisms.
tralism. Citing the increasing need for modern
technology, Ceausescu demanded that certain as-
pects of "immobility" be eliminated from the
bureaucracy, which he scored for its "subjec-
tivism and stubbornness" and for hampering
''creative initiative." All this indicated that
Ceausescu anticipated resistance to many of his
proposed changes from entrenched bureaucrats
and probably even from the workers themselves.
He has returned to this theme often in recent
months, indicating that this resistance has not yet
been eradicated.
Although Ceausescu in 1967 cited some
critical economic problems in Romania, he
stressed that he was in no hurry to make drastic
changes, indicating that he accepted the prevailing
argurrients that Romania's economy, with one of
the highest growth rates in the world, was rela-
tively strong and flourishing. Instead, he criticized
wastefulness, inefficiency, inflexibility,, and the
lack of creativity, faults he said could be cor-
rected over time through gradual and experi-
mental changes. He was particularly at pains to
assure his listeners that the need for change did
not mean the failure of previous methods nor of
socialist development to date. Then, as now,
Ceausescu implicitly recognized the existence of
dissatisfaction over shortages of consumer goods.
Nevertheless, he has been unwavering about the
party's long-standing commitment to rapid in-
dustrialization, with its incumbent hardships and
deprivations for the people. This past winter, for
instance, larger quantities of food and other
goods appeared on the markets-apparently as a
stopgap measure in the wake of the Polish distur-
bances-but the preliminary forecast of the new
five-year plan included no provision for major
increases in consumer items. Instead, it continued
to stress investment as well as restricted con-
sumption for the near future.
Ceausescu's 1967 program called for "per-
fecting and improving" the economy and the
administration of the country. Its main theme
was criticism of excessive bureaucracy and cen-
As part of his 1967 plan to cut down exces-
sive bureaucracy, Ceausescu proposed a drastic
reorganization of the country's administrative-ter-
ritorial divisions. His redistricting proposal was
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enacted in 1968, and the former 17 regions
(regiunes) plus the Autonomous Magyar Region
were replaced by 39 counties (judets), a system
roughly resembling the prewar organization. The
former subdivisions of the regiunes were abol-
ished, thus cutting out one layer of bureaucracy
in both the party and government between the
national and the local level. The new county
system has nationalistic overtones because it re-
placed the system that had been copied from the
Soviet model, but it was drawn so as to break up
former concentrations of minorities. Earlier this
year Ceausescu indicated satisfaction with the
way it has worked out, and it can be assumed that
the judets are a permanent feature of Romanian
life.
At the heart of Ceausescu's 1967 plan was
the establishment of industrial centrals, which he
defined as "powerful industrial complexes" com-
prising enterprises in related fields, or enterprises
cooperating in the production of a finished
product. The enterprise is the basic unit of pro-
duction in the Romanian Communist economic
system. The purposes of the industrial centrals,
which Ceausescu promised would have "wide
autonomy," were to bring management closer to
the production process; to reduce highly cen-
tralized control from Bucharest; and to allow
greater specialization, increased concentration of
assets, and better access to research facilities. The
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CEAUSESCU'S ACTIVITIES IN EARLY 1971: A BROAD APPEAL TO WORKERS, PEASANTS,
INTELLECTUALS, YOUTH, MINORITIES AND THE PARTY.
January
4-5
Ceausescu and other national party leaders tour Brasov, Fagaras, and Sibiu counties.
12
Ceausescu and otlrer leaders visit Prahova county.
14
Ceausescu goes to Predeal to discuss local problems.
16
Employees' general meetings at industrial, transportation, and construction sites begin through-
out the country.
21
Ceausescu visits industrial plants in Bucharest.
25
State Council meiating chaired by Ceausescu.
?9
Ceausescu visits additional plants in Bucharest.
30
Ceausescu begins working visit to lalomita county.
February 1-2
Ceausescu tours and speaks in lalornita on agriculture.
:3 5
Ceausescu speaks to national conference on foreign trade.
10
Ceausescu addresses working meeting of literary and cultural artists.
10-11
Romanian Communist Party holds central committee plenum; Ceausescu speaks at closing
session.
13
Plenum of National Union of Agricultural Production Cooperatives held. Executive Bureau of
national council of Socialist Unity Front meets.
15
Ceausescu attends general meeting of Bucharest machine-building plant.
18-22
Ceausescu speaks at Ninth Congress of the Union of Communist Youth (UTC).
19
German nationality council meets in Bucharest to hear Ceausescu's address.
20
Ceausescu et al visits food industry centers in Bucharest.
22-23
Ceausescu speaks at national session of representatives of industrial centrals held in Bucharest.
24-25 Ceausescu addresses national conference of workers from the state agriculture enterprises.
March 4-5 Ceausescu speaks at conference of Architects Union.
Ceausescu speak, to working meeting of film workers.
Party leaders from Bucharest attend 9 county party and workers meetings.
8 Ceausescu present at meeting to form National Council of Romanian Radio and Television.
9 German nationality plenary meeting held in Alba lulia.
10 Ceausescu speaks to meeting of Bucharest party and industrial cadres.
12 Ceausescu speaks to plenum of Magyar nationality council.
16 Ceausescu presides at State Council meeting.
17-18 Ceausescu attends Grand National Assembly session.
19 Ceausescu conducts unannounced tour of Bucharest market district.
Romanian Marketing Association founded.
23-27 Trade union congress held; Ceausescu speaks to opening session.
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industrial centrals were also to become more di-
rectly involved in marketing their own products,
both at home and abroad. This was intended as a
means of cutting the powers and prerogatives of
the government ministries that up until then had
exclusive jurisdiction over enterprises.
On 22 February of this year Ceausescu ad-
dressed a meeting in Bucharest of representatives
from the approximately 200 industrial centrals,
the second such meeting since their establish-
ment. He expressed satisfaction with the way the
original concept had worked out in practice dur-
ing the first year or so, indicating that the indus-
trial centrals probably also will become a perma-
nent feature of the Romanian system. At the
same time, he was critical of those who for one
reason or another apparently resist the new order
of things. Not all centrals and ministries, he said,
have understood that the centrals are to be pri-
marily organs of production and not just coordi-
nators. Ceausescu also attacked those centrals
that in three years have become "mini-ministries"
by creating a "new bureaucracy" drawn from the
technical cadres of the enterprises, thus pulling
even more trained personnel out of direct produc-
tion-just the opposite of what was intended.
The ministries also received their share of
Ceausescu's displeasure. As part of the new
system, he had demanded that the top-heavy
bureaucracy in Bucharest be trimmed, and that
technicians and specialists be sent to the counties,
where, as he pointed out, 85 percent of the coun-
try's production takes place. In practice, Ceau-
sescu charged, the ministers have finagled things
so that in the end, "all people remain in Bucha-
rest." Not only have the ministries resisted giving
up their staffs, the party leader implied, but they
have been reluctant to relinquish their powers and
responsibilities.
Turning to the duties of the industrial cen-
trals, Ceausescu made the broad statement that
the central "must be responsible for the entire
economic-financial activity of the units under its
jurisdiction" and act as the link between its pro-
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duction units, the state treasury, and the bank.
All profits, however, must be turned into the
state, and just how much discretion the central
will have to reinvest the funds remains unclear.
On the one hand, Ceausescu said that the central
has the right to approve investments up to 30
million lei, but he quickly qualified this statement
by saying that it must first draw up an investment
plan and get it approved.
The enterprise's freedom of maneuver is lim-
ited by the provision requiring that, at the local
level, the party secretary must attend the meet-
ings of the enterprise management board. He is
made responsible to the higher party organs for
the decisions taken, thus exercising a strong re-
straint on management.
Ceausescu has sought to clarify the relation-
ship of the centrals to the ministries, but the
parameters of their respective powers are fuzzy.
Ceausescu, without being specific, told the recent
meeting of industrial centrals that the ministries
"will have to abandon some practices of the
past-when they were involved in solving all prob-
lems...." Earlier, in his speech to the central com-
mittee plenum in mid-February, Ceausescu
prohibited the ministries and other central bodies
from issuing instructions except ones of a tech-
nical nature. In a further effort to cut down on
red tape, he said only full-fledged ministers may
issue orders to lower economic organs.
In early February 1971, Ceausescu called an
unusual meeting bringing together top govern-
ment and party leaders, members of the central
committee, heads of Romanian diplomatic mis-
sions abroad, and certain heads of economic
enterprises. In his speech to this conference, he
called for significant changes in the foreign trade
organizations and in their methods of operation.
All of these changes are similar to the ones called
for in the draft directives of 1967.
Making the obligatory reassurances to Ro-
mania's CEMA partners, Ceausescu noted in his
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speech that the socialist countries would continue
to account for over 50 percent of Romania's total
trade under the new five-year plan. From 1966 to
1970 the socialist countries represented 54.4 per-
cent of Romania's total trade, but this figure
included trade with Communist China, and in
1969 Romania's trade with CEMA countries fell
slightly below the 50 percent mark. Romania's
trade with Communist China will continue to
grow under annual trade agreements, but un-
doubtedly not enough to affect Bucharest's
dependency on trade with the Soviet bloc. There
are obvious political arguments for maintaining
trade with the Soviet bloc at least on a par with
Western trade, but Romania certainly would pre-
fer to continue to increase the percentage of its
trade with the West, which has the sophisticated
equipment and technology it needs. The eco-
nomics of the situation, however, make such a
policy difficult. Bucharest obtains raw materials
from the bloc countries more cheaply than it
could elsewhere, and in turn the latter provide a
certain market for goods that in terms of quality
are not competitive in the West.
Romania's increased trade with nonsocialist
countries has caused serious problems for the
economy, and Ceausescu directed most of his
comments toward this sector. The most nagging
problem is the serious trade deficit, which for
1969 amounted to $107 million, most of it ac-
counted for by imports on credit from the West.
Romania's outstanding debts to industrialized
non-Communist countries at the end of 1969
totaled $0.8 billion. Ceausescu explained that in
the last five years imports had grown at an annual
rate of 12.6 percent, while exports had increased
only 11 percent annually. The 1971-75 foreign
trade plan aims at reducing the deficit by calling
for a 55 percent increase over the 1970 level of
total trade and for an 82-percent increase in ex-
ports.
To accomplish this, Ceausescu again put the
stress on reducing excessive centralism. Foreign
trade has been the exclusive monopoly of enter-
prises under the Ministry of Foreign Trade. The
basics of his solution had been outlined in the
1967 draft directives, but they apparently are
only now being put into effect. Under a foreign
trade law just passed, each enterprise and indus-
trial central is to be "directly answerable for the
sale of production and consequently of exports."
The industrial centrals are to develop direct con-
tacts with the domestic and foreign buyers of
their goods. The centrals are to set up their own
export sections to study the market, and com-
mercial agents from the centrals will go abroad to
engage in selling.
If one refers to Ceausescu's speech in Febru-
ary, however, application of the new foreign trade
law will be restricted. Thus, for example, the
Ministry of Foreign Trade will retain broad pow-
ers of guidance, veto, and planning. In the future,
permission from the central planning authorities
for an enterprise or a central to import products
will be contingent on demonstrating its ability to
pay for them with earnings from its exports. This
stipulation obviously is aimed at trying to balance
imports with exports, but if rigorously enforced,
it would put severe strains on what is still a
struggling economy that requires more advanced
Western technology than it can pay for. More-
over, it would not encourage the strict specializa-
tion of production Ceausescu has insisted on.
Those units that want to import would also have
to export, but those sectors that ordinarily export
are not necessarily the ones that require imports;
thus such a rule might have the effect of per-
petuating existing export patterns.
In 1967, the party leader hinted at another
measure for improving the quality of production.
At that time he said that the future success of
enterprises will be judged not only on quantita-
tive indices, "but to a greater extent than at
present" on profitability. Since last December he
has put this in stronger terms: "Only when the
countervalue of the products has been cashed
in-in Romanian lei or foreign currency-is the
production cycle concluded, and only after all
this has been completed can one consider that the
enterprise and its management and staff have
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fulfilled their planned tasks...." Should this
dictum, which he reiterated at the foreign trade
conference, be strictly applied during the im-
plementation of the new five-year plan, it could
have a profound impact on many sectors of the
economy. It would reveal, for one thing, those
producing units that are not paying their way.
Ceausescu in the past has criticized the theory
that socialism can afford to retain unprofitable
units, but the leadership has not shown itself
willing to do anything about the problem. The
regime has instituted an experimental wage sys-
tem for the trading network begun in February,
by which wages will fluctuate on a percentage
basis of planned profit.
Ceausescu has tacitly recognized that the
success of all economic plans ultimately depends
on the motivation of the workers, and he has
made a concerted bid through the medium of the
trade unions for their cooperation in fulfilling the
high expectations of the current five-year plan.
His speech to a central committee plenum on 11
February as well as his address to the Trade
Union Congress on 23 March concentrated on the
need to reinvigorate and "democratize" the trade
unions. These speeches are the best indication
that Romania's leaders wish to ensure that there
will be no outbursts similar to those in Poland last
December.
The essence of Ceausescu's message was that
the trade unions have been too much under the
party's thumb and have failed to show any initia-
tive in pushing for higher production or in pro-
tecting the workers' rights and welfare. He argued
that the trade unions should no longer be merely
a "transmission belt," because the party does not
need such a device to communicate with the
working people. He ordered the trade unions to
do away with "old practices"; to give priority to
production problems; to organize themselves
autonomously and not merely as copies of the
party organization; to take a more active role in
representing the workers at the Council of Min-
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isters; and to cooperate more closely with the
Communist Youth Union and the media in
educating the workers in "socialist behavior."
As one remedial action, Ceausescu recom-
mended that working people directly active in
production should participate in the trade union's
directing bodies, so that the latter are not based
entirely on salaried trade union bureaucrats. On
27 March the trade union central council duly
elected seven deputy chairmen to its bureau, five
of whom will remain active in production work.
Ceausescu talks with worker in Cluj.
The new direction outlined by Ceausescu for
the trade unions may give some Romanian work-
ers more hope of making their grievances known,
but the general secretary punctuated his speeches
with enough qualifications to make them skepti-
cal. He referred several times to the Communist
Party's leading role in society and argued that "it
is natural that our party manages all social bodies,
including the trade union." The new statutes for
all levels of trade union organizations, from the
local to the national level, reflect Ceausescu's
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somewhat contradictory views. The statutes were
approved by the congress, and a new trade union
law has been drafted, which still must receive
formal approval by the Grand National Assembly.
The direction of future reform in the trade
unions may depend more on the leadership of
their new boss, 45-year-old Virgil Trofin, than on
the formal statutes. Trofin's rise in the party was
rapid; he was widely regarded as one of Ceau-
sescu's most favored proteges, and his former
position as party secretary in charge of cadres
gave him potentially the second most powerful
post in the party. In August 1969, however, he
lost his responsibility for the party's internal af-
fairs, and was named secretary in charge of agri-
culture amidst reports that Ceausescu was dis-
pleased with his display of ambition. He was
dropped from the secretariat in February and
made head of the trade unions, a change that may
have been a further demotion. Still, Trofin is
young and his ability undisputed, and he retains
seats on the party's Permanent Presidium (polit-
buro) and its Executive Committee. Although he
by no means has a reputation as a liberal, he
could provide the forceful direction needed to
remold the trade unions in the workers' interest.
There will be limits, however, on how far Trofin
can go in this direction; presumably Ceausescu
will not allow him to build a political base among
the trade unions.
Agriculture
Agriculture is still the stepchild of the Ro-
manian economy, and its performance of the past
few years has begun to alarm the leadership. Agri-
culture has been severely neglected in terms of
investment when compared with the industrial
sector, but it accounts for a disproportionately
large share of exports, especially to hard-currency
countries. Foodstuffs and lumber products have
been extremely important in earning hard cur-
rency for Romania, but the share of these
products in total exports to the West has not
increased since the early 1960s. The floods in the
spring of 1970 further aggravated the serious
problems of agriculture, which stem mainly from
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inefficiency, out-of-date methods, and lack of
incentive on the part of the collectivized peasants.
Ceausescu, nevertheless, apparently has no
plans to make radical changes in the backward
agricultural cooperatives, although there has been
a reorganization to link them more closely with
the more technologically advanced state agricul-
tural enterprises. To increase initiative at the local
level, the party leadership in February abolished
the positions of secretaries in charge of agricul-
ture at the central committee and county com-
mittee levels. This suggests that party interference
in daily agriculture decisions will be minimized, in
contrast with its active position in the industrial
sector. The party is counting on a program of
increased investment over the next five years
(double that of the previous period), and on
intensified irrigation and fertilization to bring
agriculture out of the doldrums.
The View from the Bottom
The workers and peasants have probably
skeptically received Ceausescu's frenetic
Inhabitants of Bucharest city cheer the party General Secretary
and his wife (center) at a local celebration.
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General Secretary Ceausescu, his wife Elena (center), and
Premier Ion Gheorghe Maurer (right) on a typical outing,
among young people at a harvest festival.
speechmaking in the last few months. Although
he has given assurances that the party is in con-
stant touch and consultation with them, he has in
essence promised very little. The new five-year
plan reportedly calls for a 20 percent increase in
wages-about 4 percent yearly-but makes no
commitment that consumer prices will not also be
raised, just as they have been in the past. For the
wage earner, the continued stress on industrializa-
tion means scant hope for a better standard of
living.
As for the workers having a voice in produc-
tion, there is yet no evidence that Ceausescu's
frequent promises of an enhanced role for the
workers' assemblies will be translated into reality.
He has said that these assemblies will have the
power to disavow decisions of the enterprise
management boards, which could lead to re-
placing the managers. Such action would depend,
however, on the active intervention of higher
authorities. Thus the workers have no final veto,
and the workers' assemblies in Romania are a long
way from developing into the self-management
system of Yugoslavia.
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Partly for these reasons, there is deep-seated
apathy and discontent among the working classes,
but it is probably more pronounced in the coun-
tryside than in the cities. The Romanian leader-
ship in the weeks following the Polish events
made concessions only to the peasants. Prices
were lowered on selected farm items, such as
fertilizers and small farming equipment. The fact
remains, however, that agricultural workers are
still subject to essentially punitive measures for
failing to work at capacity. In a speech to the
national conference of workers from the state
agricultural enterprises on 25 February, Ceau-
sescu stated flatly that income payments will con-
tinue to be withheld if production goals are not
met.
In a similar vein, there have been few new
concessions to Romania's national minorities.
Ceausescu addressed the national councils of the
German and Hungarian minorities-on 19 Febru-
ary and 12 March, respectively-with a familiar
theme. His message to the Germans bluntly fore-
closed the possibility of any large-scale resettle-
ment to West Germany. This suggests that the
earlier repatriation agreement in the treaty be-
tween the Germans and the Poles had raised
similar hopes among Romanian Germans. He
made a similar signal to the Hungarians, but told
both minorities that his long-standing pledge of
equal treatment under the law was still in force.
In addition, he promised more minority-language
publications and schools. Nevertheless, there is
strong evidence that both the Germans and the
Hungarians still feel themselves discriminated
against by the Romanian majority, particularly in
wages, employment, and in advanced education.
Although the substance of Ceausescu's cam-
paign has been mainly economic, the theme is
political-that is, keeping the party in touch with
the people. Thus, he did not ignore the literary
and cultural workers and the mass media. On 10
February at a meeting of art and cultural workers,
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Ceausescu came down on both sides of the key
question of how much freedom of creativity and
innovation should be allowed. He reiterated his
commitment to the "liquidation of those short-
comings and the past negative state of affairs that
fettered creative thinking"-a clear reference to
the period of Stalinist literature and art. He also
railed against "standardization and cliches, rigid-
ity and dogmatism," but failed to acknowledge
that these features of artistic life in a Communist
society are traceable to the censors, who still
wield a firm hand in Romania. At the same time,
Ceausescu's clear preference for art that honors
the "new man," and "socialist humanism" that
serves the interests of the state and that fights
against "retrograde" and "mystical" concepts
(read Western influences) does not augur well for
meaningful liberalization.
Perhaps most significant was Ceausescu's
announcement of the creation of a national coun-
cil of Romanian radio and television, to be
headed by Dumitru Popescu. As party secretary
in charge of culture and propaganda, Popescu has
gained the reputation for being a dogmatist, and
his appointment may forecast tightened control
by the party.
The Party
Although Ceausescu has substantially curbed
the arbitrary powers of the secret police, the
Romanian people are still subject to close control
by omnipresent party, government and security
organs. Ceausescu has also revealed and de-
nounced certain "illegal" proceedings of the
former regime, in an effort to divest his own rule
of the taint of terror. Under the new constitution,
introduced in 1965, and several subsequent new
legal codes, the Romanian people have been guar-
anteed certain minimal civil rights, but the reins
are still held tightly by the government.
Concomitant with these measures, the party
now plays a more direct role in all aspects of
social life. To broaden its popular base and simul-
taneously to enhance its levers of control, the
Special Report
party has swelled its ranks to number almost 10
percent of the population under Ceausescu's
regime. He has sought to improve the party's
image by making it more democratic internally
and by introducing younger, technically educated
leaders. A new law on the retraining of cadres
requires all managers and workers in party and
government to obtain periodic technical school-
ing. The overriding consideration in Ceausescu's
attitude toward the party is to maintain it as the
dominant force in society. All the changes in the
economic system have been proposed and ef-
fected under the explicit assumption that the
party will retain the first and final say.
Although the tenor of the Romanian leader-
ship's prolific rhetoric in the past few months
undoubtedly has been influenced by the Polish
events, the latter did not precipitate them. The
discussions, reportedly quite frank at times, have
had the earmark of Ceausescu's style and have
reflected a good deal of forethought on his part.
Winter is the customary time for introspection
among Romanian leaders; Ceausescu had the
unprecedented experience of a private tour of the
US last fall to temper his cogitations. His visits to
factories, supermarkets, and farms in the US seem
to have made him more painfully aware than ever
of the backwardness of the Romanian ecomomy.
Nonetheless, neither the Polish upheavals
nor Ceausescu's personal view of the US system
has shaken the Romanian leader's fundamental
commitment to his own style of Communism. He
may be extremely pragmatic in foreign policy,
but he is essentially conservative and cautious in
domestic matters. The alterations Ceausescu has
proposed show that he still believes the Romanian
economy can be made to work with only adjust-
ments in personnel and organization (since
December 1967, there have been at least a dozen
major organizational changes in the Council of
Ministers alone). He has apparently given no seri-
ous consideration to going the route of Yugo-
slavia or Hungary by allowing pricing and other
market forces some play in the economy.
_10- 30 April 1971
CONFIDENTIAL
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With some justification, the Romanians have
cited the danger of Soviet intervention if they
were to undertake a far-reaching economic lib-
eralization. Events in Czechoslovakia in August
1968 bolstered their fears of Soviet reaction.
Nonetheless, the USSR has demonstrated that its
prime concern lies in maintaining undisputed con-
trol by Communist parties in Eastern Europe and
in preventing the exertion of undue influence
from the West. In the case of Romania the weight
of evidence suggests that even without the limita-
tions imposed by Moscow, the leadership is not
inclined to make sweeping domestic changes.
The inherent contradiction in Ceausescu's
desire to improve the economy without launching
major reforms may explain why his bark seems
worse than his bite-why some of his demands for
change over the past three years have been vir-
tually ignored. It is apparent, from Ceausescu's
oft-repeated criticism, that many of the country's
managers have simply sat on their hands or have
used bureaucratic subterfuges for evading those
central directives that threaten their accustomed
Special Report
privileges. Ceausescu has succeeded in bringing
the higher and middle levels of the party com-
pletely under his control, but at the lower levels
there probably is still sentiment for the orthodox,
cut-and-dried way of doing things. He has appar-
ently had particular difficulty in overcoming the
inertia of the government bureaucracy. It is still
too early to say whether Ceausescu's renewed
efforts will have a more profound impact than
have previous bursts of energy, but his tactics at
the national party conference this summer may
provide clues to his next attempts to grapple with
this problem.
The implementation of the cumulative pro-
gram since 1967, particularly with regard to the
trade unions, may present Ceausescu with prob-
lems of another sort. It is not inconceivable that,
hearing continually of their supposed rights and
powers, the workers may one day demand some
of them in actuality. Their dissatisfaction with
unfulfilled promises of a better life could become
more intense, especially as economic contacts
with the West become more common-
place.
- 11 - 30 April 1971
CONFIDENTIAL
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 Approved For Release 2006/12/19: CIA-RDP79-00927AO08700050002-2
Secret
Secret
Approved For Release 2006/12/19: CIA-RDP79-00927AO08700050002-2