JPRS ID: 8443 TRANSLATIONS ON EASTERN EUROPE AND ECONOMIC AND INDUSTRIAL AFFAIRS

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000100050014-0
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 22
• Document Creation Date: November 1, 2016
• Sequence Number: 14
• Content Type: REPORTS

APPROVE~ FOR RELEASE: 2007/02/09: CIA-R~P82-00850R000'1000500'14-0
~ ~ ~

7 MAY i9~9 CFOUO 8l?9~ i OF i
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000100050014-0
- ruK u~-~1~1A~ us~ uN~Y
JPRS L/g443
7 May 19 79
~
TI;ANSLATIONS ON EASTERN EUROPE
ECONOMIC AND INDUSTRIAL AFFAIRS ~ ~ ~
(FOUO 8/79)
U. S. JOIN~ PUBLICATIpNS RESEARCH SERVICE
~
~ FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
NOTC
JPRS publicaeinne cotttain informaCion primarily �rom foreign
newspapers, periodicAls ar?d boolts, bur also from news ~gency
tranamissions nnd bro~dc~s~t~. Maeeri~ls f~~nm foreign-language
sdurr~s ~re Crangl~Ced; Chnge from English-language sources
are transcribed or reprinl:~d, with ehe nrig:inal phrasing and
oCher characreristics reC~iined. -
Headlines, edieorial repo~~ts, gnd materi~l encl~sed in brackeCa
are supplied by JPItS. E~rocessing indicaCors such as [TextJ _
- or [Excerpt] in Che first line of e~ch ieem, or following the
last line of A brief, indi.cnte h~w the original information was
processed. Where no proce~s3ing indicaCor is given, the infor-
mation was summarized or e,xtiracred.
Unfamiliar names rendered phaneCically or Cransliter^red are
,a enclosed in parentheses. Words or names preceded by a ques-
tion mark and enclosed in E~arenCheges were noC clear in the
original but have been yupplied asappropriaCe in contexC.
Other unattributed parenrhetical notes within the body of an
_ item originate with the sou.rce. Times within items�~re as
- given by source.
The conCents of this public:ation in no way represent the poli-
cies, views or aCtiCudes of: the U.S. Government.
_ f
COPYRIGHT LAWS AND REGu~T.IONS GOVERNING OWNERSHIP OF
MATERIALS REPRODUCE~ HEREIN REQUIRE THAT DISSEMINATION `
~DF TEIIS PURLICATION BE RESTRICTED FOR OFFICIAL USE ONLY.
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
t~'Ul2 0~'F'ICIAL US~; ONLY
JPR5 L/8443
- 7 May 19 79
TRANSLATIONS ON EASTERN EUROPE
ECONOMIC AND INDUSTRIAL AFFAIRS
(FOUO 8/79)
CONT~NTS PAGE
C2ECHOSLOVAKIA I
Eetimated ?0,000 Robo~s To Be Operational by 1,990 `
(Milos Fibiger Interview; TEGHNICKY TYDENNIIt, ~ `
6 Feb 79) 1
Capital Imeatmet~t Implementation Improve~ents D~scussed
(Jaroslav Fidrmuc; PULITICKA EKONOTiIE, No 12, 1979).... 5
~
~
- a - [III - EE - 64 FOUO]
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOtt OFFICIAL US~ ONLY -
~
C2ECHOSLOVAICTA
1' -
ESTIMATED 10~000 ROBOTS TO BE O~ERATIONAL BY' 1990
Prague TECHIJICKY TXDENNIK in Czech 6 Feb ~9 p 3
(InCerview with Milos Fibiger, vice-director of the angineering and
metallu~cgyr branch of the Federal Ministry for Technical and Investment "
DevelopcnenC]
[Text] More and more fre~ently we encounter the word "roboC." Karel s
Capek lr? his novel "RUR " once invented this word and the Japanese used
Che term to describe mechanical devices simulating the work of a man to
honor tl~ie memory of the ~reat writer. The specialiats, however, have
another definition: a robot is a device with one or two arms, at the
end of w~hich ~a a graDber which aerves Co pick up and move an ob~ecC.
The scientiata conclude: it is an integrated system capable of goal-
oriented integration with ita natural aurrounding according to programmed
inetructions.
_ There arE~ other definit~ona but, baeically, it is an instrument which re-
_ places a man in unhealthy aurroundings, will replace him durin~ night
_ shifts~ will facilitate automation~ etc. All this, of course, ori1.y if
' a man will give it prior instructiona, create conditions for the roboc's
- tireless activity and construct a robot which will work without a mal-
~ function. We held a diacuasion with Milos FibigeL, P.E. vice-director
of the engineering and metallurgy branch of the Federal Ministry for
, Technical and Investment L~eve?lopment [concerning the sub~ect).
_ [Questi.onj According to s~atfatics, there arE about 5~000 industrial robots
in the world today. Howev~r, the need ror robots is constantly increas- -
ing because of various economic~ technical and social reaaons. What are ~
the current situation and pro~ections for the near future concerning the
use of robota in our country?
[Answer] T:~e development and ir.troduction of industrial robots and auto--
mnted systema is moat advanced in Japan. 'rhey started 10 years ago and
have already produced 30~000 robota, that is a su3stantially higher
number than indicated in statistics. It is estima~ed that by 1985,
- 20 percent of total production of robots will be robots with higher
"intelligence."
The CIIKA [Council of Economic Mutual Aid] countries are also making rapid
progress in this area. Poland produces several types of robots and -
~ 1 '
FOR OP)?IC~AI, USE ONLY -
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOR OFFICIAL USE ONLY
= automated sysCeme partl.y of 3.Ca own conseruction and parely under a
fr.anchiae; Bulgaria operaties in a eimilar way. SovieC Un~.on will produ~e ~
geveral thoueand robota during the current �ive-year plan and will purchase
many more--from Hungary alone it will imp~rt about 200 of them thia year.
In our country~ we have been involved in manufacture of robotie and auto-
matied aystema eince the beginning of ehe sevenCies. Tn 1914 we concentrated
our efforts on the etate plan taek of ~cientific and technological develop-
- men~t and we created an advanced workshop of the ecienGific-technological
' development at the Research InaGitute of Metal~-working InduaCry in Presov.
At the recenC exhibit, ROBOT 78, ~;a were able ro offer to our induatry mass
produaed robots PR-16 and QIN-020 and automated aystems M4, MP-1-R, MU-1-R,
etc.
By 1980 our induatry will have at ita dispoeal aeries of numerically con-
trolled industrial robot models of a building-bloc type with operaCional
weight of 4, 16 and 32 kilograma [respectively], and also series of
- specialized auComated system models for machining, forming and casting
- parta under presaure weighing from 4 to 63 kilograms. Tt i:, probable
Chat~ in addition to this aeries, a production of two other apecialized
robots will be started.
For the future we are considering a wider applic:~tion of indust~ial robots
and automated aystema and their gradual introduction into flexible manu- _
facturing syatems o! automated workshopa and lines in most of the branchea
of our national economy. In 1990 we expect that our industry will uae
~ about ~.0,000 robots and more than 20,000 automaCed systema. However, to
reach this goal, it will be neceasary to complete a research-development
and production basis, including planned capacity and, above all, to
intensify and widen the international scientific-technological cooperation.
[Question] The industrial robot, as a kind of a technical model, is a
flexibly progran~nable automated equipment characterized by its abiliCy
to ad~uat to an envirornaei~t and ia based in cybernetics. It is also one
of the definitiona which~ to a large degree, involves future development.
In wh{~ch direction then ia the development of industrial robots headedi
[Answer] There are sti11 many opintons about the definition of industrial
~ robots. They are devices that provide versatile, flexible movPmeni
functions that reeemble the movements of upper extremities of a human
being. Aa a rule, they are divided in five groups: �
1. [Proceas control] robota that a man operates directly,
2. ~itobots with successtve work ateps according to a set program, condition
- and position; it is possible, but still dif~icult, to change their
programmtng,
3. Robota taught the work process by a man who directly carries out the
neceseary movements which the robot then repeats automatically,
2
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
l ' ~ ! M r a .
1 f M~ _
; ~~'1 p
_ .;r' , .
~ ~ ~ FOR OFFICIAL USE ONLY ,
~
~ 4. Robote with numarical controls which operare an the bgsis of numeri-
ca11y coded work informaCion and, finalXy,
' S. Robots which can regulate their own aceivlty through their aeneing
- and recognition capabilities. ~
With the expected technological progrese, other robots capable of per-
forming bio-mechanical func~ions and mov~ments as, for example, snakes
" or moles may be introduced. It will, therefore, be necessary to ad~uat
the class~.fication and def:;nitdona of industrial robots constantly ~
according to progresa and their conatruction.
Many countries have adopted ~he Japanese type induatrial robot, because =
iC points out Puture trends. By the beginning of the year 1980 Japanese
induatry wi11 have hundreds of ir?telligenC induatrial robots in the
automated asse.~nbly lines and in product controls where they will probably
replace or supplement the sectional asaembly line auComated systems.
It is expected that intelligent robots will be used to great extent in
the nuclear branch induatry and in automated nuclear power planta, in
welding control, etc. Tt is assumed that the production of intelligent
robota will increase by more Chan 20 percent by 1980. All advanced
industrial countries are conducting research in this field. In socialist
countries, the Kiev Inatltute of Technical Cybernetics at Glusov ie
working on prablems of artificial inCelligence in industriaY robots.
Our Academy of Scfences and some universiCiea are involved in solving
pro~ect segmente contributtng to development in this field.
(Question] It is possible to say that the industrial robots and automated
syste;.ns are in the forefront of interesC such as the computers used to
be some years ago. Practice ta~ght us that thoae using them were not
always properly prepared to use this technology, that often it was 3ust
a matter of novelty [which attracted Chem]. How do we plan to use the
_ robots in our country.go that tr~ey would not become only a sub~ect of
admiration ar claims of ownership?
~ [Answer] There are still many development, construction and research
tasks to be solved in the technological development of the induetrial `
robots. Nevertheless, it is becom.{.ng cle~~ that the focus of their
further development and utilization lies especially in their quick and
efficient introduction into the production [lines] since a robot can -
work continuously for 24 hours and can function for 600 hours without
_ a need for repair. The Japanese specialists are considering up to
2500 hours of trouble-free Punctioning. The greatest task will be to
or~;r~~ize the environment of an industrial robot in such a way that a
contit:>uous flow of materirals ix~ supply and transfer lines keep the ~
machinea working without interruption~ Here is an open field for the
Activity of technical engineers and designers solving peripheral
and software problems. In our state plan, we have considered this
area and concentrated on it more than one~third of our capacity. We -
3
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOR OFFICIAL USE ONLY -
have several dozena o� workers who aelented about ~00 repreaentatiye model
workahops and aG 6Q of them detailed pro~ects are already praceeding and
aYe ready for intiroduction of industrial robota~
Coneidering thaC after 1980 we wi11 be producing aeveral hundred robota a
year~ it will be n~cessary ~hat every enCerprise and plane, every planning
_ organizaCion and eapecially the Re~earch InsCitute of Metallurgy consider
neceseary c~pacity in preparation for introducing thia new technology.
It is neceseary to prepare the manufacturing proceas in the plants, in such
a way that there would not be a repetition of the well-known casea from
, the field of other automation technology whici~ often had to wait for
monthe to be uaed and sometim~e even longer before i.t was able to attatn
Che expected effectiveneas.
COPYRICHTt 19~9 ~ VYDAVATF.LSTVI A NAKLADATELSTVI ROH PRACE
2176
CSO: 2400
~
4
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
. .
FOR OFFICIAL USE ONLY
CZECHOSLOVAKIA
CAPITAL INVES7L'MENT IMPLII~IENTATION IMPROVEMENTS DISCUSSED
Prague POLITICKA EKONQ~iIE in Slovak No 12, 1979 pp 1127-1135
~Article by Jaroslav Fidxmuc: "One Alternative for Making Che Indicator ~ ~
System in Capital Investment Implementation More Efficient"]
- (Text] To carry out the strat~gic policy of the development of the
C,zechoslovak national economy -to raiae to a maximum its efficiency and Che
~ quality of all work- one af the cri~ical requirementa is to impr we the
efficiency of the plan indicator syatem itself. Increasing the effective-
n~esa of the c anplex of rating and statiatical-recording indicatoxs, defining -
and apecifying their functions and aleo their interrelationahipa are depend-
ent to a considerable extent a: the eocioeconamic developmente governed by
them--the efficiency and quality of work pe~formed se we 11 as the economic
balance. It ie particularly valid that whatever forme the basis f or evalu- -
ating ~~id etimulating workers' collectives in the national economy will
also be the basis for orienting their economic activity.
In the directive f or economic and social development in the CSSR for 1976-
- 1980, adopted at the 15th CPCZ Congress, it was emphasized as an important
task: "To perfect the indicgtor system for operational and five-yesr na-
_ tional economic plans and ttieir mutual organizational, branch and regional
intercannectiona in order to more effectively direct the activities of
ministries, econamic productian units [VHJa], enterprises and national
committees for the efficient development of the reproduction process."1
It ia eapecially urgent to improve the indicator system of the capital in-
vestment proceas. This is because the investment process is the corner-
stone of the dynamic of the entire natiotial economic plan awing to complex- ~
ity of the relations among participanta--between investora, industrial de-
signera, suppliera and subsuppliers and also among future users of pro-
~ects under construction where every development aberration governed by
the indicatora ia very difficult to correct by intervening in the manage-
ment system, particularly aince the investment proceas ia largely ~n in-
dividual one, repeating itaelf only under differing local, technological
and aupply2 conditiana.
5
- . FOR OFF~CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOR OFFICIAL USE ONLY
Moreovnr, increasing Che effectivenese of the ind~.cato~ syatem is particularly
_ urgent in the area of decision-making as Weii as in the area of preparaCion
and also in the area of capital investment implc~mentation. This is evidenced
~ by ahort-cominga which have developed in all three o� theae areae of the
capita~. investment process. The rapidly growing availabi~.ity of modern com-
puter Cechnology and the advanced state of discueaiona about the indicator
syatem in the management of capital inveakment, however, likewise demonetraCe ~
Chat ob~ective and eub~ective conditions are ripe for subatantial changea
in the whole indicator system.
- To be aure, it is not posaible to eliminate exieting ahortcominga in the
management, planning and implementation of canital investments aimply by
meana of changing and increasing indicatora' effectivenesa. Solving the
problema of capital investments dependa on improving Che aystem of planning
management ae a whole, particularly on overall improvement and increased
effectivenees oi the planning system which at preaent muat be directed pri-
marily toward effic,iency and quality. NoC the "indicator" aspect but Che
management aspecC ae a whole muat also be deciaive in evaluating this one
alternative (d3fficult enough of attainment) to make tha indicator eyetem
of c3piCa1 inveatment imp lementation more efficient. '
1. On the Problem of the Range of Indicators
Firet of all there should no.r, be too many indicators for the implementaCion
of capital investmente. Too many indicatara only spawne inadequate dove-
_ tailing and mutual contradictions which in turn make it extremely difficult
to utilize modern technology which calls for optim~am economic development
at individual aegmenta of management insofar as poasible under a aingle and �
diatinct indicator. To try to encompass and regulate as far as posaible
all aspects and sectors of operationa of aupply organizatione under a great
number of development indicators weakens their primary orientation toward
key roles.
At the same time, however, the need to regulate more and more aspects of
suppliera' operationa gradually raiaea the necesaity of finding new indi- _
cators. In the interests of optimum conditions for building-starts iC is
proposed to eatablish an indicator on the volume of building-starts; in the
intereate of innovation it appeara desirable not only for induatrial suppli~rs _
but alao for auppliera of etructural parts to find and evaluate an indi- `
cator cavering the amount af new products; in the intereata of implementing
_ the resulta of ecience and technology a special indicator on implementation -
of the planned role of ecience and technology is needed; and finally, it
is necessary to definitely prepar~ s specially designed plan on improving
quality, with producta divided according to degrees of quality. Indicators _
on the impl~mentation of capital investments were added the same way in
past years, especially in the aector of apecifying the structure of volume ~
implementation and in the preaent atate of relations between management of
local enterpriaes, and on higher echelons none of these can be simply desig-
nated as auperfluous or anachroni~tic.
- 6 �
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOR OFFICIAL USE ONLY -
The solution offere--in addition to eCrengthening cenCral planning manage-
ment and Chue also the importance of key indicatora--strengthening o� the
authority and responsibility of lower echelone of management. Tt is pre- ~
cisely in the under-rating of thia other aepect of Lenin's principle of
democratic centraliem where the deepest rooCs of currenC shortc4minga ],ie,
which--being unreaolved--must be counterbalanced by increaeing Che number
of specific indicatora. On the other hand, increasing the authority and
responsibility of VHJa, enterpriaes and national com~itteea would make iC
poeaible to link individual indicatora auch as indicatora on the volume of
output and indicators of quality--in fact, it ie not hard to imagine even
opt'imalization of Che area of state planning and accounting into a eingle
indicator:
Such a single indiaator (taking an extreme solution) could be the amount of
penalty or, conver~ely, Che b~~nus for timely, quality and econ omical ful-
- fillmenC of economic agreements. By balancing the plan of capital invest-
ment operatione and the obligation of contracting economic agreements, this
indicator could also express comprehensively the fulfillment of planned
- Caska by suppliere.
Eepecially in the aect:or of capital investment, however optimalization of
development Coward such a single indicator for the work of auppllera would
require a number of reetrictions: obligatory fulfillment of volume quotas
.an specific and centrally reviewed constructions, the role of expoxt of
investment worke and deliveriea, the role of construction in particularly -
important aectora, such as civil defenae, environmental protection, etc,
Asauming aot too high a proportion of theae especially binding investme~nt
= works and deliveries (not a preponderant ahare), however, these reatrictions
would in no way invalidate the optimum application of this one indicator--
with the exiatence of others having only a statiatical-recording function.
This kind of change in the indicator ayatem would unquestianably require a
great deal of political-organizational work, if only to get the~ministries,
VHJs, enterpriaea and natianal comm~itteee to at?ift their main attention
from volume indicatore to key indicatore of eiffciency and quality which _
could even include penaltiea or bonuses. This kind of shift of the main
attention would, however, fully conform tc the ~rtrategic line of the 15th
CPCZ Congreas.
For the time being, checka of management and approaches to meeting economic
goals at individual levels of management show that generally in the produc-
tion aphere ma~or attention continues to focus on planned volume indicators
' and their fulfillment3, contrary to the policy of the 15th congress. But
ae long as supply organizations are ~udged largely according to volume indi-
catore, and personal ~ob income is based on their fulfillment to a wholly
preponderant degree, then it is unrealietic to expect any aubatantial change
in proceduree.
A change in the eub~ective attitude toward fulfillment of tasks is thue
conditioned on a change in indicatora, and a change in actual functioning
. ~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOR OFFICIAL USE ONLY
of the indicator eystem in turn ca11s for exceptional efforra to change the
very Chinking of economic workera (how much political-organ~zational work -
would be required ~uet to create the condiCions for real enforcemenC of
. penalxies). This effort.to make the indicator eyetem more efficient would,
however, bring about an incomperably greater ~avinge in the amount of work
now performed in insuring fu1fi11menC of volume indicators even contirary to
socieCywide interest~ primarily regarding efficiency and quality.
Moreover, eome experience in urilizing modified (reduced, ra~ionalized)
forms of profi~a as the decieive qualitative indicator of economic develop- -
ment--and penal~ies or 1~onuses for timely, quality and economical fulfill-
ment of economic agreements are nothing but that--has already tgken place
in the socialiat countries, notably in the Hungarian People's Republic, _
- which may provide a poinC of departure.
The eignificance of increasing the role of the penalty ae a qualitative
indicator hae also for some time not escape~ the attention of Soviet theory,
which in particulax began to analyze what amounC of penalty would be eco-
nomically ~uetifiable and [he form of ita e1'tect. A new and very important
incentive for these consideratiana came up in the discusaions at the 25th
CPSU Congresa and its deliberationa. The propasal to change the current
practice of economic management which allowed general recovery o~ any pen-
alty from enterpriee profits to one in which the enterprise bonus fund would
be charged and the reaponaible workers, in addition to aharing the disci- -
pline, would also.bear a very apecific personal material responaibility,
met with an unusually lively responae and unanimoua support, and this im-
_ portant objective Co improve mana~ement af the national economy was also
incorporated intc~ ~lte documente of the 25th congreas.
In implementin~ capital investments which depend entirely on rapidly chang-
ing supply and demand relatione and a selected variety of investment media -
supplied by many aubeuppliers, the substantially increased role of the pen-
- �alty would have all the greater impact.
2. Discussion or~ Replacing Groea Production Indicators with Net Production
Indicators and Capital.Inveatment Implementation
At preaent, under the burden of prevailing ~ctention directed to the volume
indicators, it is sometimea conaidered as simply a tragic misunderstanding
that the volume of grosa production ever gt all became the chief rating
indicator for enterpriae operations. It has been shown ob~ectively that it
could always perform only a atatistical-recording function.
= In thia regard one tends to forget, however, that in the economies of the
various sacialist countries, including Czechoslovakia, throughout the re-
cent period of intenaive induatrialization processes, there was a whole
' long period when the quantity of production was really critical, even at
the cost of higher cooperation, which in the long run also had a progresaive
impact. Perhapa no aector of national economic development can better
document thi8 fact than precisely the se~tor of capital investment imple-
mentation.
8
FOR OFFICIAL USE ONLY
,
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOR OFFICTAL USE ONLY
_ During thie perfod of extenaive development it wae also neceasary to use
any matierial that wae available, even if it coat more than originall~~ bud- -
_ geted. Moreover, with minimal intereat on the part of enterpriaea in pro-
- fits and with etrict centiral management of the economy there was slso in
this period little riek that the enCerpx~ses might have preferred uaing `
more expensive materials to achieve a higher gross volume of production.
Rating the enterprisea l,nrgely on the basis of fulfillment of groas produc-
tion, and later according to groes output achieved, was ri.ghtly a ref lection
of preciaely this p~riod.
~
After overcoming this period, t,owever, the aector of capital investment
implementation atill perhapa mcst clearly evidencea the anachronism of per-
sieting in this rating indicator. In ~he inte~esta af better ra~ings on the
' basis of higher groes value Qf condtruction, even induatrial designers of ~
pro~ecte would rath;r uae more expensive materials and materially more de-
manding construction with enthuaiatic cooperation which, given the individ-
ual character of conerruction i~, on the one har9, particularly easy ~to do
and, on the other hand, particularly hard to detect. This interest in the
highest poaeible gross value of their conetruct~.on ia even increasing among
the contractore of capital inveatment pro~ecta and eupplies, and they also
are replacing original pro~ect materials with mor~ expensive ones and ob- _
taining increaeing cooperation. The inveator is not only unable Co counter
these antisoc~al endeavors with sufficiently effective means but he even
lacks any material incentive to oppose Chem. .
To be sure, ever aince 1975 a transition to indicators of net producti on ia
. being experimentally checked in 14 enterprisea in the CSSR. Theae are in
three forms: on the basis of net production of goods, net output and re-
- duced output. Then, generally according to a specified meth~dology since
- 1976, the output indicators are cleared, for purposea of drawing wage coste,
of the amount correaponding to unplanned cha:~ges in the proporticn of
material coata (including cooperation) which also is important i~ the imple- -
mentation of capital investmenta.
_ T'his specixied methodology, however, does not, on the one hand, influ~nce -
- the actual atage of drawing up the plan xor material costs of conatructioct
which ie, after all, only to inaure material economy in a key etage--even
if unplanned changes in the proportion of material coats of construction,
including cooperatian, are deducted. On the other hand the enterprises
retain a higher profit se a reault of the higher cost of construction awing -
to more materially demanding production, as well as certain other adva,itages
issuing fr an aurpassing the plan of production because of higher material
coats. A qualitative change in the intereatedness of enterprises in ec 4namy
has not yet come about, and discussions on a change to a more realistic
indicator of the actual merits of an enterprise a.ce proceeding apace.
They are proceeding in general even though enough arguments4 have been
collected favoring indicators of net production versus indicators of gross
production. -
9
FOR OFFICIAL USL ~NLy -
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02149: CIA-RDP82-44850R000100054414-4
~
~'OR OFFICIAL USL ONLX ~
Hut even in advanca ~.C is apparene thgr thi~ indicator: 1) wi11 mor~ or
le~a (dapending on the individual form) not ~~t~mulete the enterprisee to
- prefer meterially more dem~nding production nor of its~lf will it, more or
lees, in~pir8 them to material eavinge; 2) will give en~erprieee all the
greater inGer~eC in incr~aeing the amounr of manual labor or (more precise~.y) -
- norms of amounts of repor~ed wages~ aYso contrary to princi~les of ecnnomy.
- Since the diecugsione on ahifting eo indicator~ of nee product~.on have a
distinct internatianal character, it ie all the more n~cessary to mention
the Czechoelovak ekperience f or which Czechoslo~akia paid dearly not ao
long ago:
Certain theor~ticgl propoeale today are tending towerd indicatore of net
production determinPd by deducting taxes from production funds, interest
on credit, pension~ fixed and certain oCher payments, eo that in essence
tY.ey would be limited only to tihe volume of wagea plu~ net profit. Thia
- kind of indicgtor, however~ is too closely reminiscent of the enterpr3se
intereatedneae in grose revenues which Che Sik group tried t.~ introduce in -
Czechoslevak economic re:orme during the aecond half of the sixCies. The
reaulte of the shift to enterprise interestednegs in gr~~ss revenues were
at the time amang the moet aerious in the revieioniat alide of economic re-
forma in Czechoslovakia beca~+sa the manegement of manual labor was completely
Curned around~ and intereatedneas in Che amount of gross revenues of enter-
prises led to overpayment of labor which brought about reduced purchasing
power. A return to the concept of enterprise interestednese in Frofit thus,
at that time, naturally had to be one of the firet measurea in the aector
- of management of the economy upon formaCion of the new party leaderehip
headed by Comrade Hueak.
Particuiarly in the sector of capital inveatment implementation Che ahift
to a rating indicator of net produczion alao conceals a great riak asaociated s
with the danger of greater disparity in the earning capacity of various in-
vestment operationa and deliveriee. Experience up to now with differing
profitability, for examp.le in the construction of apartments on the one
hand, and civic or technical conatruction on the other, showed r,~hat a aen-
sitive problem it is. Even after adjuatment of wholesale prices as of
1 January 1977~ there is no guarantee in the present price etructure againat
such a riak with sufficient econo~ic ~uetification.
All this sho~wa that the preaent method of rating enterpriee operationa not
only cannot be regarded as adequate but that even current diacuasione on
replacing indicatorn of grosa production with indicatora of net production
are far fram aseuring a final satiafactory resolution. The ahortcomings of ~
indica~tors of net production in whatever form, depending esaeutially on
gross enterpriae revenue, rather argue for further refinement of indicatora -
of enterprise merita ao as to limit them to enterprise profit or its par-
ticular form--penalty or bonue for timely, economical and quality fulfill-
ment of the enterpriee responsibility toward society and its economic
partner.
� 10 ~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02149: CIA-RDP82-44850R000100054414-4
FOEt OF~ICIAL USL ONLY
3. The indicator Syetem of Capitg~ InvestmenC Tmpiementation and ltelaeione ~
of Supply and Demand
One of the mo~t imporCant Caek~ of the indicator syetem of enterpr~.~e opera-
Cione~ indeed, viewed Erom the ob~ectiive of ineuring nacional ~conom~c de-
velopment, Che mogt imporegnt one of ~11, is to stimulaCe entierpriees Co
contracC and fulfill supply and demand ob~.igations and thereby gaeiefy =
society'e neede. But it is precieely here thaC national economic problems
are literally piling up.
Neither the earlier change frrnn ind~catora nf gros~ produ~:eion to indicatore
baeed on output achieved, nor Che cl~aring of thia indicator aince 1976 for
p~rposea of drew3ng wage costa in the amount corresponding eo unplanned
changes in Che proportion of maCerial c~ats (including cooperation) eucceeded
in solving, nor could they eolve, the m~in problem based on ehe facC that
a congiderable number of enterprises are oriented only toward meeting gross
valuea of production and therefore do not meet sev~ral indicatore. But be~
cause Che taeka placed on enCerprisea are more and more taxing, the rasult
ie a Worsening of eupply and demand relationa~ parCicul~~rly noticeable ~n
capiCal inveetmente impleroentiaticn.
Thus the acutenese of the problem called for, and atill calls for, further
measures. Ae of 1977 there wae a modification of rating indicatora for
- leading economic workera eo that specific fulfillment of crit~cal tasks in
- the atructure of production became of prime importance to them.
In the prescribed rating indicators, which should number no more than five,
special emphaeis is placed on fulfilling mandatory taska in the plan of
capitF~l construction~ tasks concerning building pro~ects which must be com-
pleted according to central determination, arid taska according to supplier
contracts an the territory of th~ capital city of the CSSR, Prague, the
- North Bohemian Kra~ National Committee and the capital ciCy of the SSR,
Bratislava.
The ~,roblem, hcwever, is that--as ehown by current analyais - the enterprises
are atill esaentially oriented taward fulfilling taska of growing production
volume becauae from the �indicatore of quantitative development - output
achieved--there ie deducted within the framework of the whole national eco-
nomy about 96 percent in wage funds. Remaining only on the periphery of
suppliera' interesta--and again this applies especially to capital construc-
tion--is fulfillment of the requested full asaortment of producta, to say
nothing of the remainder of materfal taska, fulfillment of the syatem of
aelected indicatora of economic efficiency (it is characteristic that in
_ preparing the Sixth Five-Year Plan they served only as informaeion on
quality of the draft plana eubaitted but are not of a binding nature), and
_ also indicators of quality of prc~duction. Furthermore, even fulfillment
of theae indicatora, inaofar as ehey are achieved, again are essentially
achieved by fulfilling or surpaesing only the volume indicators themselves.
11
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
~OR 4FFICIAL U3E ONLY
Z'his eituation naturally turne attention toward eubaeantially 3ncreaeing ehe
role of ~conamic inetrumente. It~ie not by chxnce Chati in the forefront of _
Chie attention are eanctione for nonfulfillment of eupply and demand COIlmi~t~
menta, again particularly in capital canetrucL3on. The penalt3es exacted
~ for nonfulfi~,lmen~ of eupp~.y and demand obligatione are not ~ulfi~~.it?g their -
function eesentially within the fremework of the whole national economy. _
An inquiry c~rried out at the beginning of 1977 by ehe SSR Miniatry of
Development.and Technology emong workere of 120 entecprises and VHJe, chief 1y
of induetry and building tradee in 5lovakia~ on reasone for the ehorecominge
' in capiCal constructicm did indeed at firet glance bring out indications
tl~at the penaltiee ~re at least partially fulfilling Chis role: Accarding
to thn repliee, 21 percent of the VHJe and 34 percent of the enterpri.see
exacted pen~itiee, but according to thie inquiry in 12 percent of the VHJe
and 29 percent of the enterprisee penalties for the most part Were not ex-
: acted because the effort exerCed was not su~ficiently effective; 38 percent
of the VHJe and 51 percent of the enterprisee even openly admitted that in
most cases they did not exact them in order not to diaturb their relatians
with their euppliere. -
_ Typical of this view was the case of a worker in an inveatment body who ~
consiatently exacted eanctiona through arbitration for nonfulfillment of
contractual obligatione and wse finall~? forced to leave the enterprise be- _
cause the eupply organizatian wae no longer willing to cooperate with him.
- .One can state that in the present chainlike state of nonfulfillment of
supply and demand obligations it is dif�icult to definitely blame the -
eupplier; even the amount of the penalty ie not of intereat to the coneumer
(investor) for ita economic i�tpact and, moreover, the cansumer (investor),
considering the preponderance�of demand over supply, is not on an equal
footing with the aupplier.
Society's conviction ie definitely grawing that penalties ahould fill their, -
important role ae eancti~na far failure to meet suppiv and demand ob).iga-
tiane and eociety also ought to use the full weight of its authority to
ineure tbie role.s But the development of aociety's viewP goea even fur~
ther. Many praainent figuree of society are today also ai,riously thinking
about the queation of why eanctiona are not being appliec~, not only again~t
the enCerprieeB but also persanally againet their :esponsible workers, not
only for nonfulfillment of supply and demand obligations but also fdr non-
fulfillment of taske of technical development, taeka of raieing the quality
of producta and, naturally, of reducing coste.6 Here th~re are clear in- ~
dications of efforta tc exten3 penalties to sanctiona for failing to ful-
fill econamic taeke in general with an effective impact on the compensation
of reaponaible workera, which, after all, fully correaponds to the demend-
ing requirements of the preaent atage of development.
Primarily, however, there etill remains the problem of reinforcing the real
purpose of the penalty ae a sanction for failure to fulfill supply and
12
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
~
~OR OFFICIAL US~ ONLY
demand obllgaCione and ~C~ oppQeite form--bonusee for Cim~ly, economical and
quality falfi~lment of econanic agreemente.
Penr~lCies. for insrance, ought Co be gn effc:tivic eid in eolving euch an
impartant problem for ~uppliera ae ~hat of dieadvat?tageou~ production. "WhgC
kind of producC~on ie that? Perhape it's not even needed aC all?" aek Scviet
~ authare M. Lobacov a~td V. Jefimov in the article "Planning Indicaeore ~n
the MEChaniem of ManagemenC" published in the p~riod~cal KO~iUNYST, and they
themeelves reply: "No, it is needed by the consumer, the natinnal economy,
but it i~ dieadvantageoue to the producer because ti~ie kind of production~
as economic workers sometimes eay, won't get you far; it won't fulfill the -
plan nor will you get a bonus. So the manufeceurer produces moatly the
pr~ducte that ineure him fulfillment and overfulfil Lnent of the plan'e
'iriplementation' in rubles and tona~ and often the conaumer hae to take
whaC does not euit him much. Theref~re many enterpriaeg are ehaking: the
~ob of aupplying on demand (note, not in preduction) efficiect kinda of
fi~niehing goode~ certain rolled aectiona, pipeg and other materials ie -
' becoming more and more complicated."~
It aeema that thie problem can be easily solved by a aimple meana: a
change in the manner of rating the work of enterprisea according to the
value of production, taking into accouc?~ the fulfillment of production plane
af varied goode coneietent with conCracCual obligations, and ordere. As
etated by the eame Soviet authara "...in each case~ ~ust a8 soon as the
introduction of thie kind of inethod was brought up, certain induatrial min-
ietriee actively ob~ected to this procedure for varioue reasona. The syatem
of impereonal ,fulfillme~it of the p~an in ite overall value is to entrenched
that even a qualified f ormulation of the qu~eation of responsibility for
~ nonfulfillment of planned deliveriea appegrs unbelievable to aome economic
leadera."8
They are also having very aimilar experiences in the CSSR in the current
practice of changing indicatore of the delivery atructure into rating in-
dicators, even though only ~n the moat important national economic taske.
The opposition of leading economic worker~~ to rating enterpriae operationa
according to their fulfillment of varietiEte of deliveries is, hawever~ -
underatandable to a certain~extent. If it were not possible to make up
for nonfulfillment of deliveries of one kind cf product by exceeding the
planned volume through production of other kinds of goods, the enterpriae
would eeldom be able to report fulfillment of the plan, often because of
miesing subdeliveries from other prod~ucers. Theoretically, then~ it would
even auffice for ~uet one prc3uct out of thousanda to be lacking in the
planned quota in order for the enterprise to fail to meet its plan and not
receive any bonus. In the national economy, however, the shortage of this
eingle item~ albeit of negligible value, could acutally prevent the final-
ization of extensive production unite, which is typical precisely in capital
conatruction,
' 13
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02149: CIA-RDP82-44850R000100054414-4
FOR O~FICIAL USE ONLY
I
~n capita~ coneCruction, hawever, the shortage of ~uet a s~.ng~.e minor
maCerial or component parC wh~.ch the aupplisr ragards aa "disadvantageous"
production ~g one of the main facCOre contributing to the proliferaCion of
building~eCarte and extended building deadYines and againet which--ae ie
~h~ by experience--the mosr author3tative ordere have little effece.
(Another i.mpcrtant factor, which again ie also rooted in the system of rat- -
ing ~ndicatiore, is the fact that the building and aseembly organi~aCdans
themselvee~ in their franCic queat to meet volume indicatore, keep increas-
in8 the ~ange of building-gtarte and thus prolong construcCion per~ode.)
In tihose caee~, thuugh~ where even the most auChoritative orders are of
- liCtle avail, a subetantial increase in the role of the pena],ty could be of
eignificant he1p. In Soviet '~heory and specifically in the article by the
BuChore quoted, even the basic principlee of esCabliehdng amounts of penal-
ti3es and aseiSning regpansibility for them are crystalizing, as well as
go,rm~e of levyitt8 them:
1~ The amaunC of the penalty should campensabethe cansumer (inveator) for
d~ge8 eustained, not according to +the value of the aondelivered product
bUti based on Che amnunt of benefits 7.ost.
Z, The associatian to which the enterprise belonge ahould be res~onsible -
for the penalty� which, in the Cze~choslovak ayatem c~f management, is the
~J, Unqueatianably, this woulc~ coneiderably raise the role of the middle
echelon of mana8ement in the eyetem of eupply and dQ.mand obligatiana without -
a~y further reaolurione.
3~ ~e ewns should be 3evied on aupp liere by means of arbitraCian without
litigatioa and at the auggestion of the arbitration ofiice itself, not at
' the behesC of the party which auffered~the losa.
The e~rce of paymenC for the penalty must noC be the atate budget nor
ptoduction expenaea but the enterprise's or VHJ's own funds, with the re-
eponsible ~rkers being per~~onally ~penalized.
This meth~ of rreplacing pgrtial reaponsibility with a syatem of full re-
ep casibility of the s~.ipplier vis-a-vis the conaumer (inveator) at once
cloeely reflecta Czechoslovak c anditiona as well ua the developed neede of _
the CzechO8lovak economy, perhapa with ane pointed difference: clearly, in
no other Socialist etate is there such a presaing problem as the fact that
the enterprisee refuee to make economic agreementa at all and thus take an
e~pply and demand obligatioae. This shows, on the one hand, a lack of dis-
~ip line in the natioaal economy and, on the other hand, an imbalance in `
resources ~d in affordable requirements of known needs, apecifically an
i~,vestment imb~lance.
4~ ~i~ New Indicators?
~1e indicator eystem of cap~tal iaveatment impl.ementation can be limited
8nd at the e~e tim@ enhaace ita effectivenesa. The key queation here ie
14
FOR OFFICIa4I, USE ONLY
I
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02149: CIA-RDP82-44850R000100054414-4
~
FOn OFFTCIAL US~ ONLY
the critical rating indicatore on whose character and effectiveness depend
a nun?ber of ather indicators, both mandatory and inforcnative with a stetie-
ticaY-recording function. The~effort to limit eh~ number of indicatore, eo
make the whole eyetem more f~exible and responeive, however, does not ex-
clude buC rather directly also calle for new and apecific indicatora, with
a new role on a higher level of productivity~ economic relaCione and the
social superetructure.
One such new rating indicator--as is ehown by current developments of eco- _
namic theory--coald be the penalty indicator or one of bonuses for Cimely,
quality and economical fulfillment of enCerprise and VHJ obligations to
society ae a epecific regulated f orm of profit which would reflect'the
level of the moet diverse aepecte of enterpriee operatione. The task of
innovaCion in the indicator eyetem ie~ naturally, far from exhaueted by
- this.
The area which apparently will require finding new indicatore in the very
near future anrl including them promptly among critical rating indicatora
ia the plen to 3ncrease Che quality of rated producte. Generally up to
now the indicatore of thie plan are not mandatory and therefore not even
included among the rating indicatore. In epite of this~ ite formulation
ie viewed in more than one enterprise and VHJ with confusion and resQrva-
tiona because the ~ntire thinking of economic workera fur 10 yeara centered
on a syeCem of indicatora directed only on fulfillment of volume indicators.
_ The taek of raieing quality ie oae of really prime importance, especially
in capital conetruction where they create utility valuea of particularly
_ longterm use, critical for living etandarda. (It is not by chance, for
~~xample, that the basis of eocial policy today is characterized as houeing
policy. ) , _
It will not be posaible to change the attitude of economic workers on pro-
duct quality without including the role of improved quality awong the de-
cisive rating indicatora. (This, however, means that it ia neceasary to
increase the number of mandatory indicatora by an indicator of quality.)
Several advantageoua avenues are offered here. Particularly noteworthy is
the proposal of the Soviet aircraft builder Antonov, based on current
methodology of rating indicatora, to include the production of lower-grade
quality only partially in the plan fulfillment. There need be only a few
_ degrees of quality. It is characterietic that in aome industrial sectors
at present the number of quality grades has been reduced from the former
_ three grades and ~ob lots to only two grades and product groupa which do
not meet norms. Under present conditions of increasing demand for quality,
this kind of development is no:mal. Also characteristic, however, is that
in theee same productioa secbore the diacounta for second-gxade goode are
currently an average of 10 perceat higher.
- Unquestionably~ if epecific implementation of investment construction re-
sulted in, say, 100 percent fulfillment of the plan but producta of aecond
15
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02149: CIA-RDP82-44850R000100054414-4
FOR OFFICIAL USE ONLY
rate quallty weYe counted in the converted p L~n fulfillmene by a lower co-
efficiei_: of only g few percenL, then by Che present meehc~ of rating indi-
caCors this would have considerable influence on subetantially increasing
att8ntion eo qual~.ty. gur one could go everi fureher: uc.mee planned indi-
- catore of quality counting ag anZy partial fulfillment of volume quotas
could be sub~ect to e~nctione of a corresponding penalty and thus trans-
form product quality ind3cators without any other mandatory indicatore into
this single rat~ng indicator.
Similarly~ iC would be poesible to deduce from plan fulfillment (at least
- partially) unmee volumes of new products even if their production were re-
placed by noninnavative products; it 9.s even poaeible to coneider deducting
from plan fulfillment the production of gooda that are poor technically or -
out of daCe.
A apecial chapter of regulation by the indicator system ia "Problema of
Building Starte." Not that thie area ia not sufficiently the aenter of
attentian. A part~of the plan of reproduction of fixed assets is also in
a separate form, "Data (awmnary) on Buildinga Brought into Conetruction,"
with divisians on mandatory construction~ centrally reviewed construcCion
and other conetruction, with building-starta under theae diviai.ona in the
varioue yeare of the five-year plan. All central organs (including kraj
national committees--without compreheneive houaing conetruction) are work-
ing up thie formula for etructures budgeted over Kcs 2 million and the high
social interest in reducing building-starts by scheduling taeks is apread-
ing to the enterprieea. In spite of this, goal8 for reducing building etarts
are far from being met.
In seeking the reason f or this etate of affairs the economiste are very
ekeptical of the view that excesaive building-starte can be dealt with by
increaeing the interatednesa of managers or ather leading workers of eupply
organizations ir~ meeting their aesigned taeka. They rightly see the root -
of the problem rather in the methodology of the plan, specifically in the
fact that inveetors are aseigned inveatment limits and they, under preasure
of various intereeta (every construction ~ob has its own patraa), in turn
urge suppliere to begin more and more jobe--even though they may not have
available Ca~acity for them~ sa ae not to loae these limfta -all of which
oaly helpa to furth~r increaee the range of building-start~, or at least
, is a aerioue hindrance in eliminating exceesive building-starts. That is
why the econoa~iete ehowed great intereat in the proposal of the director
of the Inatitute of Economy and OrganizaCion in Construction in Bratislava,
Bngr J. Longauer, in eatabliahing an indicator for o~timum buiLding-starts
in building orgranizatione which would he3p to ehift the planning and manage-
ment of building-starts to auppliera according to the2r real capacities.
It may be added that the questim of introducing an indicator for building-
etarta is worthy of coneideration also for auppliers~ of *echnological build-
ing parte, especially f or assembly organizatioas.
The problema of eetabliehing new indicators in managing the implementation
of capital coastruction with all ita ceRnplexity are, naturally, much broader
aad maay-faceted. 16
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02149: CIA-RDP82-44850R000100054414-4
~'OR OFFICIAL USE ONLY
As produc~ion forcea~ produc~ion re].ations and the eocial ~uperetructure ~
are developing more and moxe rapidly it ie also neceaeary to ad~uaC rhe in-
dicator syeCem more and more often ~o the rapidly changing ob~ ective and
eu~~ective candit3ons. In concluaion~ it ie, however, neceseary to emphaeize
thies baeic deficienciee in managing 3nvesCment consCruction are not due
Co any specifice or peculiarities as compared with other seceors of mgnage-
menti of the naCional economy. Specifically, in rhe indicator syatem there
are general probleme which only appear especially distinct and aensit.;ve in -
- the e~ctor of man~agement of investment conatruction. But ir 3s also poes{'ole, ~
- therefore, to ee~ek most effectiv~ly in thie sECtor f or the key to aC least
_ gradual allevia~:ion ar~d solution.
FOOTNOTES
1. lSth CPCZ Congrees~ Bratielava, Pravda Publiehing House 1977, p 546.
2. Recen~tly diecuseiona are reviving with great pracrical import on whether
= capital construction ia a production or aupply proceas. Any kind of
- narrowed concept of the investment prxese, however~ dangerously narrowa -
the field for eeeking the roots of the ahortcomings in capital conatruc-
tion. As I already emphasized in my study~ "Some Basic Problema of
Analyeie of Relations BeCween Investment and Balanced Development,"
published in EKONOMICKY CASOPIS July 1973 (pp640-641), conatructica ae
a production procese of building and aaeembly organizationa createa
' only the consCruction bagie of capital construction which, to be sure,
has a epecific place in the procese of capital conetruction itaelf.
Then oa its baeis the inveetment proceas paroceeds ae a supply procesa
which hae its own methode, organization and management of eupply re-
~ lationa. _
- 3. The same cmclueion was reached at the meeting of the Central Control
and Review Commission of the CPCZ Central Committee, 16 May 1917. -
' 4: Here apecifically in articlea by Engr J. Dvorak, Dr Sc (POLITICKA
EKONOMIE November 1914, January 1976 and April 1977); in the USSR in
an article by the director of the Economica Inetitute of the USSR
A~cademy of Saiencea, Prof E. Kapuatin, concluding an extensive dis-
cusai ai on indicatore of labor productivity (VOPROSY EKONOMIKY,
February 1977).
5. In this connection it may be stated as characteriatic in the Soviet -
Union, where nanfulfillment of the role of the penalty is more or less
the same, that it was even propoaed that responsibility f or fulfil]-
ment of contractual obligationa be included directly in the new draft
constitution.
6. "I knaw of no inatance in my experience where a responsihle economic _
worker'e bonue or remuneration was reduced because he allowed the
17
FOR OFFICIAL USE ONLY
,
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-44850R000100054414-4
FOR OFFICIAL USE ONLY
J production o� gooda technically, functionally or estheCically deficient" _
(Deput~? J. Mevald at the meeting of the CSSR Federal Aeaemb].y~ quotied
from the article, "Current Hud~ee Po11cy~" PRAVDA~ 1 July 1977, p 2).
7. Quoted in article~ in KOt~itJNIST t1o 16, 1975 (bomeatic tranelation VUN~t VSE -
in Hratislava, pp 4-5).
8. Ibid pp 7-r.
COPYRIGHT: ACADII~iIA, Praha 1978 ,
_ 8491
CSO: 2400 END _
\
18
~ FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000100050014-0