WEST GERMANY: DOMESTIC AND INTERNATIONAL ECONOMIC ISSUES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79B00457A000600080001-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 44
• Document Creation Date: December 9, 2016
• Document Release Date: March 22, 2001
• Sequence Number: 1
• Publication Date: July 1, 1977
• Content Type: REPORT

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Confidential
NOFORN
West Germany: Domestic and International
Economic Issues
Confidential
ER 77-10421
July 1977
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Noforn
West Germany: Domestic and International
Economic Issues
Central Intelligence Agency
Directorate of Intelligence
July 1977
Key Judgments
The West German economic recovery has softened in recent months.
Real GNP growth this year will likely be closer to 4 percent than to the
4,5-percent CIA forecast in March. In any event, the government's goal of
5-percent real growth, reaffirmed at the London Summit, almost certainly
will not be achieved. Although controversy over the government's energy
program is delaying investment decisions, the primary culprit is a slowdown
in export growth.
So far the government has taken no policy initiatives that would
appreciably improve this year's outlook, even though Bonn recognizes that
its growth target and unemployment goals are not likely to be met. Both
fiscal and monetary authorities remain convinced that large-scale economic
stimulation would add to inflation without having much effect on
unemployment, which they believe results mainly from structural
weaknesses in the economy. Bonn stresses that half of the unemployed are
youths under 20 years of age, physically handicapped, or women seeking
part-time jobs.
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Because of the virtual certainty that Germany will fail to achieve its
1977 economic growth target, Schmidt probably anticipates pressure from
Washington for greater economic stimulation during his July visit to the
United States. He will also expect to discuss Germany's nuclear export
policy, US-German arms trade and coproduction issues, and court-imposed
US trade restrictions, and he will want to exchange views on the ongoing
North-South dialogue.
espite his promise to place a
moratorium on German exports of some sensitive nuclear technologies, the
Chancellor refuses to commit himself in the area of uranium enrichment. As
to bilateral arms trade, German unhappiness with the US Army's pursuit of
an all-US XM-1 tank in preference to Germany's Leopard II is a factor
behind Bonn's hesitation to approve AWACS for NATO use.
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West Germany: Domestic and International
Economic Issues
Recovery Losing Momentum
The pace of German economic recovery has
already slowed two percentage points since
fourth quarter 1976, to an annual rate of 4
percent in the first quarter. This rate now seems
more likely than the 4.5 percent CIA forecast in
March* to persist for the rest of 1977. Bonn
recently lowered its growth projection from 5
percent to 4.5 percent, and the principal Ger-
man economic research institutes retreated
from their earlier joint forecast of 5.5 percent,
with three of them now expecting 4.5-percent
growth and ithe other two only 3.5 percent. The
Organization for Economic Cooperation and
Development (OECD), on the other hand,
upped its forecast from 3.5 percent to 4 percent
(see Appendix I). Industrial expansion in partic-
ular has slowed, with output rising at an annual
rate of only 5.3 percent in January-April as
compared to the previous four-month period.
New industiial orders point to continued mod-
erate growth, though these data must be used
with caution because of recent revisions in the
data base and method of collation. The total
volume of new orders for the first four months
of 1977 is a little above that of the same period
in 1976 (see figure 1).
Exports in particular have not performed as
well as anticipated by CIA and by German
*The CIA forecast is based on a combination of analytical
judgments and the results obtained from an 84-equation
econometric mcdel of the German economy. For the primary
assumptions underlying the forecast, see Appendix II. A
description of I he model is available from on
IDS code 143, e tension 5911.
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Noforn
Industrial
Productionl
Index 1970=100
(seasonally adjusted)
120
JFMAM.1.1 ASONDJFMAM.11 ASONDJ FMA
1975 1976 1977
1 Excluding construction.
5/33/9 6-77
forecasting groups earlier this year (see table 1).
A slowdown in the growth of sales to France,
Italy, Eastern Europe, and the Middle East has
more than offset accelerated shipments to the
smaller European countries and to Japan. Ex-
port volume in the first quarter was only 7
percent higher than a year earlier. As important,
the volume of new foreign orders for the first
four months of 1977 increased less than half as
much as in the same period 1976. The preva-
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Table 1
West Germany: CIA Forecast of Key 1977 Economic Indicators
March
Percent change from the year 1976, real terms
June
GNP
4.5
4-4.5
Private consumption
4.5
4.5
Public consumption
2.5
3.0
Gross fixed investment
5.5
5.0
Exports
8.5
7.5
Imports
9.5
8.5
GNP deflator
4.0
4.0
Persons
Average unemployment
950,000
980,000
lence of anti-inflationary policies in the West
European countries and hard-currency shortages
in the Eastern ones suggest that a slower export
pace will persist. Hence, CIA's forecast now
assumes 7.5 percent export growth, down one
percentage point from its March forecast.
Real private consumption continued to rise
in first quarter 1977 after a strong performance
in late 1976 and is still expected to show a
4.5-percent increase for the year as a whole.
This year's improved growth rate will stem from
bigger gains in real wages and a I 0-percent hike
in pension payments in July. Concern over job
security, however, should prevent a boom in
consumer spending. For example, consumers
spent only 14 percent of the $5.5 billion in
government subsidized contractual savings that
were unfrozen at the beginning of 1977; most
of the funds were reinvested in savings ac-
counts. A similar disposition of funds is likely
when $5.1 billion is unfrozen in July.
Total federal and state expenditures are
budgeted to rise faster than last year, reflecting
in part the first installment of the government's
infrastructure program. However, because in-
creases in tax revenues?assessed on last year's
healthy level of economic activity?are expected
to outpace the rise in expenditures, the federal
deficit should shrink by a fifth. The public
sector deficit (excluding social insurance and
government enterprise deficits) could drop from
$20 billion to $14 billion.
Gross fixed investment should also do rela-
tively well this year, rising at close to last year's
5-percent rate. Uncertainties about the govern-
ment's energy program are causing some busi-
nessmen to delay investment decisions. Never-
theless, the climate for investment has been
improved by higher profits and better credit
conditions highlighted by a reduction in new
public sector borrowing and lower interest
rates. New domestic orders for investment
goods are above year-earlier levels. Manu-
facturing capacity utilization, 83 percent in
April, has risen nearly 7 percentage points since
recovery began. Though the level will vary
considerably from industry to industry, overall
utilization may remain below the 1973 level
this year. Meanwhile, an appreciating Deutsche-
mark and rising unit labor costs continue to
exert pressure for investment in labor-saving
equipment?a rising share of total fixed invest-
ment since 1970 (see table 2).
The rate of inflation this year should remain
around 4 percent or perhaps slightly lower?less
than half the expected average for OECD
countries. Consumer price increases accelerated
somewhat earlier in the year, largely because of
selected excise tax increases. Since then they
have again slowed. Industrial producer prices
thus far this year rose at a seasonally adjusted
annual rate of less than 1 percent. This rate will
quicken as this year's higher wage settlements
impact on production costs. Nevertheless, the
gradual pace of economic expansion and com-
petition from imported goods probably will
force producers to absorb at least some of the
cost increases in their profit margins (figure 2).
With some deterioration in the terms of trade
and slower export growth, Germany's current
account and overall payments surpluses will
decline, especially in Deutschemark terms (see
table 3). The Deutschemark's rapid appreciation
against the dollar since mid-1976, however, will
Table 2
West Germany: Distribution of Fixed Investment
Percent
1970
1971
1972
1973
1974
1975
1976
Capacity expansion
57
50
40
41
35
25
15
Replacement
11
15
19
19
21
25
30
Rationalization
32
35
41
40
44
50
55
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Index: 1970=100
(not seasonally adjusted)
200
180
160
140
120
100
te Wages and Prices
t,
1970
71
1. CIA forecast.
73362 677
Imainmon=gummogompootat 4*-4044wesaw
offset much of this decline in dollar terms. The
current account surplus should be around $2.5
billion, down from $3 billion last year. The
overall payments balance should shrink even
more. The eightyfold improvement in the long-
term capital account that occurred in 1976 is
unlikely to be repeated this year. Foreign
purchases of German fixed-interest securities
are running far behind last year's pace because
Table 3
West Germany: Balance of Payments'
Billion US $
Current account ba once
Balance on goods and services
Unilateral transfers
Long-term capital (net)
Short-term capital (net)
Errors and ommissions2
Net change in reserves
1976
3.0
10.0
?7.0
?0.1
0.4
?2.9
0.4
CIA Forecast
1977
2.5
10.1
?7.6
NA
NA
NA
NA
'Data coverted a US $1 ? DM 2.518 for 1976; US $1 DM 2.36
for 1977
2 Including losses due to the DM appreciation.
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of lower interest rates and expectations of
slower Deutschemark appreciation. If exchange
markets remain relatively calm, the balance of
short-term capital flows will continue to be
below last year's level.
Unemployment?the Major Preoccupation
of Policymakers
Persistent near-record unemployment re-
mains the most worrisome problem on the
German politico-economic scene. Two years
into the current cyclical upswing, unemploy-
ment (seasonally adjusted) remains above 1
million, down less than 200,000 from its
recession peak. Joblessness has actually in-
creased in the past two months (seasonally
adjusted) and now stands at 4.5 percent of wage
and salary earners. For 1977 as a whole,
unemployment seems more likely to average
980,000 than the 850,000 set as a goal (see
figure 3).
Even if legally possible, the involuntary
repatriation of the more than 1.9 million
Percent
t 5
The Unemployment
Ratel
51316] 6.77
72
73
74
75
76
772
1. Wage and salary workers, which constitute approximately 90 percent of
the German labor force.
2. CIA forecast.
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foreign workers remaining in Germany?about 9
percent of total wage and salary earners?would
not solve the unemployment problem. More
than half a million foreign workers already have
left since 1973, and the remainder is protected
by treaty commitments (for EC nationals) or by
contractual agreements. Most of them perform
the more routine or menial jobs that Germans
have come to consider beneath their dignity.
With unemployment benefits relatively high,
the prejudice against accepting "Gastarbeiter"
jobs has not significantly changed.
The intractability of the unemployment re-
sults in part from the increasing share of
problem groups among job seekers and from
structural changes in industry.
? According to a special survey of Federal
Labor Office in September 1976, approxi-
mately half of the unemployed are young
people under 20 years of age (and therefore
without completed vocational or professional
training); workers with some physical handi-
cap (whose employment is viewed as less
cost-effective); and women looking for part-
time work (potentially posing scheduling
problems for employers).
4
? A sizable group of the unemployed over 20
years of age has few vocational skills. Wages
for unskilled labor rose disproportionately
fast in the early 1970s, inducing many
workers to leave school and low-paying ap-
prenticeship training. Now these people have
become victims of automation or other labor
cost-cutting measures. 25X6
? The stagnation or decline in employment
in such important industrial branches as
machine building, autos, iron and steel, and
some sectors of electrical and electronic
equipment manufacture, have aggravated the
occupational and, to some extent, the geo-
graphical mismatch between labor skills of-
fered and those demanded. These factors
explain in part the sharp difference between
the 5.7-percent and the 5.1-percent unem-
ployment rates in Lower Saxony and Rhine-
land-Westphalia on the one hand and the
2.9-percent rate in Baden-Wuerttemberg on
the other.
Thus far the persistence of massive unem-
ployment has generated more political heat
than social unrest. The latter is probably ex-
plained by the fact that for most of the people
affected unemployment is a temporary phe-
nomenon.Two-fifths of the jobless have been
out of work less than three months, and
two-thirds draw unemployment compensation
that approximately equals their previous net
pay. Hard-core unemployment?that is, jobless-
ness for one year or more?affects less than
200,000 people.
Nevertheless, there is growing impatience
with the slow pace of improvement, especially
among union leaders and the more doctrinaire
left-wing politicans. Concern is increasing that
the current cyclical upswing will peak before
unemployment has come down much. This
concern is heightened by the realization that
the labor force will grow more rapidly in the
next few years because of the baby boom in the
early 1960s. At the same time, fewer jobs are
being created since rising cost are encouraging
firms to adopt more labor saving devices.
Schmidt clearly is on the spot. In his May
Day speech to the Trade Union Federation, the
Chancellor singled out the reduction of unem-
ployment as the number one task of his
administration.
Reluctance to Take Expansionary Action
Schmidt thus far
as re uses to ta e major reflationary measures.
Strongly backed by his more conservative Free
Democratic partners and by the Bundesbank,
the Chancellor continues to believe that such
measures would generate more inflation than
employment. He remains convinced that the
most effective way to reduce the large struc-
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tural cornpcnent of unemployment is through
specifically tailored manpower programs.
? To improve the business climate and hence
stimulate investment needed to provide jobs,
Bonn adopted a medium-term investment
program. Some $5 billion to $6 billion in
federal and state funds will be used to
improve the country's infrastructure over the
next few years; $1.5 billion in orders are to
be let this year.
? To help the ailing construction industry,
Bonn recently extended through 1978 con-
struction subsidies scheduled to expire this
year. Bonn also plans to provide an addi-
tional $625 million to subsidize the con-
struction of an additional 30,000 dwellings
this year.
? To reduce unemployment directly, Bonn
recently announced a manpower program
that provides $250 million to place hard-to-
employ persons such as older white collar
workers and to create 20,000 new part-time
jobs in hospitals and nursing homes. The
program also creates an additional 1,600 jobs
for emplcyment counsellors to improve the
labor referral services, continues subsidies
aimed at relocating workers, and tightens
eligibility requirements for unemployment
compensation.
? A compromise package yet to be approved
by the Bundesrat would reduce business
taxes and increase child-support payments
next year in exchange for a 1-percent rise in
the value added tax. Though not originally
intended, the package, as likely to be ap-
proved, will probably have a mildly stimu-
latory effect.
While the government's manpower program
seems likely to be the most effective measure
taken to date in reducing unemployment, the
infrastructure plan will add some jobs by 1978
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as well. It will impact directly on the labor-
intensive construction sector where unemploy-
ment is particularly high. The wisdom of
extending housing construction subsidies, how-
ever, is questionable. The housing market al-
ready is glutted with some 200,000 vacant
housing units. None of these measures will add
significantly to this year's growth, but they
should help keep next year's economic activity
close to this 1977 level.
Schmidt's Approach to Washington Talks
In view of Bonn's downward revisions in its
own growth forecast, Schmidt probably antici-
pates pressure for additional economic stimu-
lation from Washington during his July visit to
the United States.
Increased Economic Stimulation
Schmidt is fully aware of the continuing US
interest in rapid German economic expansion as
a means of helping countries with balance-of-
payments deficits. Unlike two months ago at
the London Summit, he will not be able to state
confidently that Germany will meet its 5-
percent economic growth target. Even official
German government forecasts now envisage
only 4.5-percent growth under current eco-
nomic policies.
Although the Chancellor probably remains
dubious about the long-run economic usefulness
of ad hoc stimulatory measures, he may be
willing to take stronger action.
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Inflation is being contained, and
government finances are in substantially better
shape than expected. According to some press
speculation, the Chancellor intends to submit a
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new government investment program next fall if
unemployment has not improved dramatically
by then.
Nuclear Policies 25X6
In a recent joint press conference with
French President Giscard, Schmidt brought
German nuclear export policy somewhat more
in line with US views. He stated that "for the
time being" Germany will not authorize new
export licenses for nuclear reprocessing facilities
or technology. At the same time, however, he
reiterated Bonn's plan to honor its commitment
to deliver a reprocessing plant to Brazil. The
Chancellor issued no parallel moratorium on
exports of enrichment technology, reportedly
because "other nations" have not made such a
commitment.
Bonn is prepared to abide by all international
agreements covering the sale of nuclear equip-
ment and technology. At the same time, it seeks
assurance that natural or enriched uranium
exporting countries not exploit their supplier
position to enforce additional restrictions on
Germany's nuclear industry.
Bonn's rejection of any restrictions on ex-
ports of nuclear reactors stems from the belief
that "it is in the interest of the nation's
economy to remain internationally competitive
in this important sector of highly sophisticated
technology." This belief also explains the recent
allocation of two-thirds of the $2.7 billion
energy research and development budget over
the next four years to nuclear research, particu-
larly in rapid breeder reactors.
Nuclear exports have assumed increased im-
portance now that Germany's domestic nuclear
program is enmeshed in controversy. The main
point of contention is Bonn's desire to increase
nuclear power generating capacity from the
current 6,500 MW to 30,000 MW by the second
half of the 1980s.
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Arms Trade and Coproduction:
A Two-Way Street
The gross imbalance in US-German bilateral
arms trade in favor of the United States has
long concerned Bonn. This sore point in US-
German relations has recently become more
acute as unemployment has mounted. Some
officials believe that increasing the weapons
share of exports from 1 percent to 3 to 5
percent could double the 200,000 jobs cur-
rently in industries handling defense contracts.
The relatively high inflation rates prevailing in
the 1970s have, moreover, increased Bonn's
desire to reduce the unit costs of defense
production through expanded sales abroad.*
Finally, Germany's increased assertiveness with
respect to US-German arms trade and copro-
duction reflects an increased awareness of the
substantial German military and economic role
within NATO.
The US Army's preference for an all-US
XM-1 tanks over the German Leopard II has
given rise to some disillusionment in Germany
regarding US resolve to pursue the two-way
street. Defense Minister Leber himself has char-
acterized US behavior in the competitive tank
trials late last year as "oriental," and some
German press commentators have even charged
that the tests were rigged. Perhaps more impor-
tantly, Bonn believes that foreign sales pros-
pects for the Leopard II have been damaged by
*Germany pursues the most restrictive arms export policies of
any major arms producer. Any change in these policies would
meet with strong public opposition. Recently, however, German
labor and industry, as well as countries having arms
coproduction agreements with Germany have pressured Bonn to
expand weapons exports.
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US publicity Df the competition. An abrupt, in
the German view, change in US Coast Guard
requirements for a maritime patrol aircraft?
effectively excluding the German contender,
the VFW-Fokker 614?has further ruffled Ger-
man feathers.
Dissatisfaction with the outcome of the tank
trials has added to Bonn's reluctance to buy the
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States to fulfill NATO requirements for an
25X6 airborne early warning aircraft.
German officials have conveyed
impression of a linkage between the US Army's
choice of the XM-1 and German hesitation in
participating in AWACS. There is considerable
evidence, though, that Bonn is reluctant to buy
the system at this time due to genuine skep-
ticism as to its military merit, doubts regarding
overall system costs (particularly the German
share), and an unwillingness on the part of the
German armed services to fund it at the cost of
25X6 longstanding priority weapons acquisition pro-
grams.
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Given these considerations,
couls continue o
system in the absence
gesture with respect to
duction.
Bonn
ACS
of a substantial US
cooperative arms pro-
North-South Dialogue
From the start, Germany has opposed major
concessions to LDCs; it believes such conces-
sions would violate free market principles and
further strain public sector finances. Bonn is
unhappy with the outcome of the recent Paris
round of North-South talks, convinced that the
industrial countries gave ?far more than they
received. As, one German commentator put it
"the LDCs were on the whole successful but act
disappointed; the industrial countries had no
success but pretend that they did." The govern-
ment is particularly concerned over the indus-
trial countrtes' failure to press harder for the
export earnings stabilization (STABEX) scheme
favored by Germany. Having only reluctantly
endorsed a common fund for stabilizing raw
material prices, Bonn will try to minimize the
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fund's operations and finances when nego-
tiations resume later this year.
The heavy potential costs resulting from the
common fund worry the Germans as much as
the budgetary impact of LDC demands for
generalized debt relief. Bonn feels common
funding would lead to higher prices and surplus
production of many raw materials, while debt
relief would absolve the LDCs from fiscal and
monetary discipline.
Bonn also deplores the industrial countries'
failure to gain reciprocal concessions with re-
spect to energy consultation, assurance of raw
material supply, and guarantees for direct in-
vestments. Progress on these issues will be
necessary if the government is to be able to sell
parliament the idea of upping German aid
expenditures from 0.3 percent to 0.7 percent of
GNP. The OPEC and Soviet Bloc countries
would also have to increase their aid effort.
Trade Policy
Bonn strongly supported the London Sum-
mit pledge that countries would refrain from
import restrictions as a means of improving
their external positions. In view of the slower
than expected rise in exports so far this year,
the Germans are increasingly concerned over
what they consider to be a rising wave of
protectionism in the United States. They appre-
ciate that the US administration has sought to
blunt this wave but are primarily concerned
about a recent US court decision calling for
countervailing duties on imports benefiting
from value-added tax relief. The value-added
tax is a standard feature of German?and
EC?tax systems, which provide for rebate of
value-added taxes paid on goods exported.
Thus, all German (and EC) exports to the
United States would become subject to counter-
vailing duties if the US court decision is upheld.
Under General Agreement on Tariffs and Trade
(GATT) regulations, value-added tax rebates on
exports are not considered an export subsidy.
Bonn will follow the US court action with great
interest and undoubtedly would protest adverse
rulings, calling for GATT review, arid implicity
at least, threaten countermeasures.
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Appendix I
Comparative Forecasts
Forecasts of West Germany's 1977 real GNP
growth show an unusual amount of variation.
The five German economic institutes* split into
two groups in April, when their latest semi-
annual joint forecast was due. Three institutes
agreed on a 4.5-percent real growth projection,
while the other two said growth would be only
3.5 percent. Even this dichotomy represented
some convergence from positions held at the
start of work on a joint forecast. Nevertheless,
all the institutes except DIW already had
retreated from the previous joint forecast of 5.5
percent, which only Essen originally had said
was too high. In May, the West German
government lowered its official forecast from
5.0 percent to 4.5 percent. As for outside
observers, Chase Econometrics reiterated its
4.6-percent p:rojection in March, and the OECD
recently raised its sights half a point to 4
percent.
The forecasts (see Table 4) differ most
concerning business investment, reflecting
widely varying judgments on both fixed invest-
ment and st ockbuilding. Most forecasters ex-
pect exports to pick up later this year and to
determine the course of the recovery in 1978.
*These institutes include the German Institute for Economic
Research (DIW), Berlin; the IFO Institute for Economic
Res ear ch, Munich; the Rhineland-Westphalia Economic
Research Institute, Essen; the Institute for World Economics,
Kiel; and the Institute for Economic Research (I-IWWA),
I-lam burg.
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Table 4
West Germany: Real GNP Growth, 1977
Percent
Latest Forecasts
German government
Chase econometrics
DIW, Hamburg, and Kiel consensus
OECD
IFO, Essen consensus
4.5
4.6
4.5
4.0
3.5
General variances in the projections result
largely from differences in orientation and
methodology. IFO?one of the two pessimistic
institutes?relies heavily on surveys on business
expectations; Essen?the other pessimist?
consistently reflects viewpoints of the busi-
ness community. DIW?the last institute to
abandon the 5.5-percent forecast?employs pri-
marily econometric analysis, while government
forecasts may reflect a politically motivated
upward bias. The OECD, which uses a judg-
mental approach, apparently raised its forecast
from the low end of the range when it proved
to be inconsistent with first-quarter data.
Some variation in the forecast may result
from different interpretations of recent govern-
ment statistical revisions. Changes in the series
for new orders, industrial production, and the
national income accounts have confronted ana-
lysts with troublesome problems of data com-
parability.
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9
Approved For Release 2001/04/09: CIA-RDP79600457A000600080001-9
Appendix II
Assumptions Underlying CIA Forecast
The primary assumption underlying current
CIA projections of German GNP growth in
1977 at 4 to 4.5 percent is a 7.5-percent
increase in export volume in 1977. This is
slightly higher than Bonn's revised projection.
The money supply?central bank money stock
plus free liquid reserves?is assumed to expand
about 6 percent on average during 1977. This
produces a 9-percent growth in the central bank
money stock, compared with the 8-percent goal
announced by the Bundesbank in December.
Other major assumptions remain essentially
unchanged since our March forecast. We assume
an 8-percent rise in nominal government con-
sumption and a 10-percent increase in nominal
government investment that includes $1.5 bil-
CONFIDENTIAL
CONFIDENTIAL
Table 5
Basic Assumptions
Percent 1977 Growth Rate
March
June
Export volume
8.5
7.5
Nominal government spending:
consumption
8.3
8.3
investment
6.4
10.2
Hourly wage rate (average for entire
economy)
7.0
7.0
Money supply
7.8
6.0
lion of the supplementary public investment
program. Other than the increase in specific
excise taxes at the first of this year, no major
changes in tax rates during 1977 are assumed.
We also assume a 7-percent gain in negotiated
wage rates (see table 5).
25X1A
This paper was prepared by the Offices of
Economic Research and Strategic Research.
Comments and queries are welcomed and
should be directed to
on code 143, extension
25X1A
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Appro
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Appro
? (COPY)
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The Honorable Harold H. Saunders
Director
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Attached is your personal copy of
our memorandum, "West Germany: Domestic
and International Economic Issues," ER
77-10421, CONFIDENTIAL/NOT RELEASABLE TO
FOREIGN NATIONALS.
MAURICE C. ERNST
Director of Economic Research
Central Intelligence6 Ag.ene677
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