NORTH VIETNAM ECONOMIC DIFFICULTIES: COMPARISON OF FEBRUARY AND DECEMBER GOVERNMENT REPORTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000200150001-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 17
• Document Creation Date: December 19, 2016
• Document Release Date: June 23, 2005
• Sequence Number: 1
• Publication Date: January 13, 1975
• Content Type: REPORT

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NOR TH VIETNAM ECONOMIC DIFFICULTIES:
COMPARISON OF FE BR FEBRUARY AND DECER-IB rR GO VERN]IIENT REPOR l'S
13 JANUARY 1975-
307
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CONTENTS
Summary
North Vietnam Economic Difficulties . .
I. Le Thanh Ngh. Report to National Assembly . . . . . . . . . .
.
. 2
Agriculture . . . . . . . . . . . . . . . . . . . . . . . .
.
. 2
Industry . . . . . . . . . . . . . .
.
. 3
Planning . . . . . . . . . . . . . . . . . . . . . . . . . .
.
. 4
Population . . . . . . . . . . . . . . . . . . . . . . . . .
.
. 4
II. Appendix. . . . . . . . . . . . . .9 . . . . . . . . . . . .
.
. i
State Plan Targets and Achievements for 1974, Targets for 1975
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NORTH VIEW ECONORIC DIFFICULTIES
CCiIPARIS0,11 OF FEBRUARY AND DECETIBER GOVERr'nE1`1T REPORTS
SUMMARY
1. Hanoi has publicized a revealing year-end assessmen. of the
North Vietnamese economic situation in a comprehensive government
.-port delivered by Vice Premier Le Thanh Nghi to the fifth
session of the Fourth DRV National Assembly. Viewed a.f;ainst
economic objectives which Le Thanh Nghi outlined for t.;,e National
Assembly last February, the current account of successes and
failures in implementing the 1974 state plan points u.p a number
of shortfalls and problems in the North Vietnamese ecinomy.
+ W,:lle boasting that rice production was unusually high and had
exceeded the 1974 plan by eight percent, Le Thanh Ngii avoided
any specifics regarding overall production and admitted that
agriculture in general had failed to register "any broad
comprehensive change" during the year.
+ Nghi's claims of a four percent increase above plan in industrial
production and a 15 percent increase over 1973 t.ndicates a
midyear plan adjustment; at the beginning of 1974 a 21 percent
increase had been set for industry.
-I- The state of long-range planning in the DRV also appears to
be in some disarray, The vice premier's directions for the
preparation of the second five-year plan--scheduLed to begin in
1976--suggested little has been accomplished in formulating the
necessary guidelines and goals.
2. Selected extracts from Le Thanh Nghi's February and December
1974 National Assembly reports, which are reproduced at the end of
this paper, illustrate North Vietnam's current economic difficulties
and future goals.
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NORTH VIETW'I'l ECONO IC DIFFICULTIES:
COMPARISON OF FEBRUARY-40 DECEMBER GOVERMENT REPORTS
Vice Premier Le Thanh Nghi'= government report to the fifth session
of the Fourth DRV National Assembly, held from 23 to 28 December,
dealt with the North Vietnamese economy in three sections: 1974
economic development; guidelines anL' tasks of the 1975 state plan;
and measures needed to improve production, management, and
productivity.* The assembly session followed the pattern of the
lost previous assembly meeting in February 1974 when Nghi hd.d
acted as the keynote speaker for the first time, delivering the
major report on problems of postwar DRV reconstruction.** As in
the past, Hanoi media carried what appears to be text of the
latest government report, but only brief summaries have been
released of other reports to the Assembly.
The participation of other DRV leaders in the recent National
Assembly session conformed to past practice, with President Ton
Duc Thang and Vice President Nguyen Luong Bang heading the lineup
on the session's presidium that also included Politburo members
Le Duan, Truong Chinh, Pham Van Dong, Hoang Van Hoan, Vo Nguyen
Giap, Ng,-.yen Duy Trinh, and Le Thanh Nghi. Truong Chinh, as
chairmaL: of the National Assembly Standing Committee, delivered
his customary opening and closing remarks. Along with Foreign
Minister Nguyen Duy Trinh's report on diplomatic activity since
the signing of the Paris agreement and Defense Minister Giap's
report on t'.ie military situation, the session heard acting Finance
Minister D,,o Thien Thi speak on the 1974 state budget and the 1975
draft state budget, People's Supreme Court President Pham Van Bach
on court activities, and Chief Procurator Hoang Quoc Viet on law
enforcement activities.
Although a political speech by Premier Fham Van Dong at National
Assembly sessions in previous years has traditionally been given
major prominence by the media, at the current session the premier
apparently played the same minor role that he did in the February
1974 session. The brief communique issued at the conclusion of the
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proceedings merely i;.tdicated that he had spoken on behalf of the
Council of Ministers, and subsequent media coverage provided no
detailed account of his remarks.
LE THANH NGHI REPORT TO NATIONAL ASSEMBLY
Le Thanh Nghi spoke not only on behalf of the Council of Ministers
at the fifth session of the National Assembly but as State Planning
Commission chairman, a position to which he was appointed last
April.* Nghi attempted to put the best face on the DRV domestic
situatic'n by characterizing 1974 economic goals as having been
achieved "fairly satisfactorily in many respects" and by claiming
that "fair but slow progress" had been made in carrying out the
1974 plan. Although praising some sectors for exceeding their
planned goals--notably, in production of coal, electrical power,
chemicals and rice, Nghi repeatedly indicated shortcomings in other
areas of 1974 plan fulfillment. In addition, he admitted that the
DRV has "achieved little in the way of consolidating socialist
production relations" and has failed to keep pace with the need for
reorganization "in the direction of large-scale socialist production."
AGRICULTURE In the key agricultural sector, Nghi cite"' unusually
large rice yields but seemed to acknowledge some
major imbalance in the overall agricultural picture. He said that,
annual rice production for 1974 exceeded the plan by eight percent,
a 21.4 percent increase over 1973 when the 10th-month rice crop was
an admitted "failure." The successful rice production figures were
elaborated upon in a 26 December NHAN DAN editorial, which characterized
the production of fifth-month-spring rice for the year as "unprecedent-
edly high" and that of 10th-month rice as reaching "the highest level
in 15 years." On the other hand, Nghi expressed dissatisfaction with
the general }ituation, saying that agriculture had failed to register
"any broad comprehensive change" in 1974. And a deliberate vagueness
was suggested in his failure to indicate what portion, if any, of the
16 percent increase in the total value of agriculture production over
1973 that he had called for in his February National Assembly report
had been reached.
* Politburo member Nghi's appointment as State Planning Commission
chairman marked a reversion to the pre-war pattern when, from 1958
to 1965, the commission was headed by Politburo member Nguyen Duy
Trinh--who was succeeded during the war years by Secretariat member
Nauven Con-
41
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The considerable attention Le Thanh Nghi devoted to secondary
crops in his discussion of the 1975 plan may indicate a pot-r
showing in this sector in 1974 and account for the regime's
seeming reluctance to publicize plan fulfillment figures for
agriculture as a whole, even with an exceptional year for rice.
This focus on crops other than rice was in sharp contrast to
his February 1974 report which dealt with secondary crops only
in a general manner by urging expanded corn cultivation, but
without specifying the percentage increase expected for 1974.
In his December report, Nghi asked that "special attention" be
given to the "quick increase" of corn production and other
secondary crops; and decrying a tendency to slight these crops,
he emphasized their "special importance in solving the problems
of food grains and fodder." In an apparent attempt to rectify
deficiencies in secondary crop production and consumption in 1974,
the Vice Premier called for "dramatic changes" in 1975 and
asked for a huge 40 percent increase in their production over 1974.
INDUSTRY The 1974 record for overall industrial progress was
equally dubious. Although Nghi boasted of a four
percent increase in "total value of industry and handicraft
production above plan and a 15 percent increase over 1973,"
comparison with what he said in February reveals that the 1974
industrial target had apparently been lowered during the year.
Presenting the 1974 state plan at the February session, Le Thanh
Nghi had declared that "total industrial and handicraft output
value in 1974 is expected to be up 21 percent from 1973." In
what may have been a tacit admission of the plan reduction, Nghi
in his December report expressed dissatisfaction with this type of
action in another context when he asserted, "as of 1975, there
will be no question of readjusting plans in midyear, except for
unexpected developments." In lamenting the poor showing made by
industry in 1974 and the pernicious effect this has had on other
sectors of the economy, Le Thanh Nghi said:
This situation has made it difficult fcr industry to
support the [other] economic branches, especially
agriculture. Industries, small industries, and handi-
crafts have great potential but have not yet been
developed satisfactorily. Manpower, materials, and
equipment are still wasted. The use of raw materials
is not tightly controlled. Production costs remain
high and the quality of products is still unsatis-
factory. The industrial branches must endeavor to
overcome these shortcomings in the days to come.
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PLANNING Vice Premier Le Thanh Nghi's discussion of the second
five-year plan--from 1976 to 1980--dealt with the
spadework that must be accomplished prior to determining what the
guidelines and goals are to be and did not reveal the specific
objectives.* The insistence with which Nghi expressed the need
for these advance preparations seemed to reflect increased urgency
in expediting the formulation of the plan before the end of 1975,
and may have been prompted by disappointment with faltering progress
in planning, similar to that experienced in other areas of the
economy in 1974.
Nghi called for "intensive" and "positive" preparations for the
five-year plan and declared, "we must expedite basic and urgent
preparations for the ensuing years." He urged that the collection
of planning data be "expc?diti(lusly" completed, that investigation
of basic economic and social conditions be "stepped up," that the
bases for formulating plans be established to "insure effective
formulation of the 1976-1980 plan," and that negotiations with
foreign countries on projects connected with the five-year plan be
"expedited." There was no reference to a "draft" five-yoar plan
in Nghi's current report, although he had advocated the "study" of
such a draft plan last February.
POPULATION While he never comes to grips with the problem, the
harmful effects of excessive population growth on
the North's economic development pervaded Nghi's report. "In the
field of circulation and distribution of goods," he averred,
"greater efforts have been made . . . in spite of the many
difficulties caused by the war and the rapid increase in the
population"; and he blamed the inability of the regime to meet the
demand for consumer goods on the rapid increase and changing
distribution of the population. Despite recognition of the problem,
the Vice Premier offered little in the way of concrete measures to
achieve a solution. Following his call for a birth control campaign
in his February report, DRV propaganda devoted but scant attention
to the issue and nowhere near the widespread publicity that seemingly
would be required to be effective. In his latest report, Nghi blandly
noted that the movement has spread and asked that "special attention
must be given the birth control campaign to keep the growth of the
population at a rational pace."
* Hanoi's first five-year plan ended in 1965 and plans for a second
w're dropped in 1966 because of the war. The decision to launch a
five-year plan had been noted in Pham Van Dong's National Day
address in September 1973 and was subsequently discussed by Le Thanh
Nghi at the February National Assembly session.
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- i -
APPENDIX
STATE PLAN TARGETS AND ACHIEVEMENTS FOR 1974, TARGETS FOR 1975
Extracts of 1974 economic targets from Le Thanh Nghi's
report to the February 1974 DRV Nationa? Assembly, and
claims for fulfillment of the 1.974 plan and targets for
1975--in script--from his December Assembly report.
1974 Plan Fulfillment
1974 Targets ToAge doh 1975
"By successfully implementing
[the 1974] plan, the North's
economy will achieve important
progress compared with
1965 . . . . The gross social
product* will increase by 21
percent, national income will
increase by 14 percent . . . ."
"It may be said that 1974 has
been a year in which the plan
has been achieved fairly
satisfactorily in many respects."
"We have made fair but slow
progress in fulfilling the 1974
state plan while the requirements
of our national economy have
increased." ("We bhou.Cd .s,t ive
.intews.iveCy to .i,neitea e .the gum
-soc,Lae p'toduc t by 19.6 pe cent
oven. 1974, national income dn.am
piwduation by 19.5 pe'tcent . . .
Industry
"Total industrial and handi-
craft output value in 1974 is
expected to be up 21 percent
from 1973."
"The total value of industry and
handicraft production was 4 percent
above plan and up more than 15
percent over 1973." ("To.aC
.induztAiae output vague don. 1975
showed #ncAeaae by 22 pencen.t oven.
1974 . . . .")
"Output value of the machinery
industry in 1974 is expected
to increase 19 percent, as
compared with 1973, and two-
fold over the prewar years."
"The machinery industry still
develops slowly." ("Invez.tiiient in
the machinery .indu4ttny don. 1975
w.i.C.C neaAt y doub ee .that 06 19 74 .
The pe ce tage od .th.'1 #nve4.tmerzt
in .tennvs o6 .o.ae .induz,t'u:a.C
.investment wilt .incitea4e dn.om
15 pv cent in 1974 to 18 peneent
in 1975.")
* The gross social product is the measure of total output in a
communist economy.
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1974 Targets
"It is necessary for the coal
industry to make efforts to
overfulfill the 1974 plan to
the extent possible . . . ."
1974 Plan Fulfillment
Talt.gets {on 1975
"Although the coal industry has
not yet reached prewar levels,
it has overfulfilled its produc-
tion plan by 12 percent and its
stripping plan by 8 percent."
("FmbaJt1ing on 1975 . . . coat
ext)taetion wife equal that o4
1965." "The coat Lndustny
mu4t . . . 4tftive to .inuteaa e
coax production by about 1.5
miWon ton,6, on 39 peheent oven
1974." "By the ehd ob 1975 the
production capacity o6 . the
coat ,indwstru wLe.e have inenea4ed
by 17.5 percent over 1974.")
"The electric sector will
increase its production level
by 30 percent compared with
the previous year."
"The metallurgical branch must
concentrate on promptly
rehabilitating and completing
the building of the Gia Sang
rolling mill and the Thai
Nguyen iron and steel complex."
"The power output was 2 percent
above plan in 1974 and 66 percent
over the prewar peak of 1965."
("EmbaAh.i.ng on 1975, . compared
with 1965, power production capacity
w.iL .invteas e 80 percent . . .1'
"The etect' icae sector mu,6t .inc4ea4 e
powers output by 19 percent compared
with 1974 and doub.ee that o6 1965.
Power suppP,ied to .industry and
agn ieuA tune must -.nereaze by 32 and
20 percent re4pec ti.veey compared
with 1974." "By the end o6 1975
the production capacity ob the
etectt i.ci,ty . ecton wilt have
.incAea/sed by 32 percent over 1974.")
"The Thai Nguyen iron and steel
complex has been restored and put
into partial operation." ("The
me ta,Y,eung.ical branch must aecetenate
the re .toration and nebuitd.ing o6
the Thai Nguyen AA.-1 and .steee
complex; comp.eete the bui.eding o6
the G.ia Sang .oteee-,totting mLU;
expand the ehromite mine, the tin
mine . . . . 11)
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1974 Targets
1974 Plan Fulfillment
Tang e,t bon 1975
"The building material branch must
accelerate the production of
d ..1 l --- it
-
brie
an
"The lumber exploitation industry
must continue to boost
production . . ."
"The chemical industry must
actively complete the building of
the Ha Bac nitrogenous fertilizer
plant to put it into operation in
early 1975. It is necessary . . .
to increase production of super-
phosphate fertilizer, phosphate,
and apatite . . . ."
4
"The production plan for bricks
and tiles has been, overfulfilled.
The production plan for cement
is still below prewar nor.s."
("Cement production showed
.incnecu e 40 penco_vi t on mote
. . "
compared with 1974
"By the end oU 1975 cement
production capaai ty wLtt .iiicAcaze
17 pe cent over 1974." "B/tick
production must .ineneaee by mare
than 22 percent eompaned with
1974 . ." "By the end of
1')75 bn,i.cfz production capacity
o6 state-operated enteApr.vs ens
w tt .ineneaze by 36 peheent oven
1974.")
"No considerable progress has
been recorded in the lumber
industry." ("Lumber production
mu6..incAea6e by 22 percent
compared with 1974.")
"In the chemical industry, the
production plan for fertilizer,
synthetic rubber, and so forth
has been fulfilled or overful-
filled." "Almost all plants in
the chemical industry . . . have
been rehabilitated or even
expanded and their capacities
increased." ("The ehem.icat products
-indu.s.tny mush: eomp.ee.te the bwied-ing
o4 the Ha Bac n;.t'cogenou~s Uen t Uizen
p.eant and put it into operation."
"Production of phosphoi.owo 6eAtieizeA
mw5..inc'ceaze by 24 percent compared
with 1974.")
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1974 Targets
"Attention must be paid to
accelerating the production of
light industry and the food
industry . . . ."
1974 Plan Fulfillment
Tanget6 gars 1975
"The production plan for some
foodstuffs and consumer goods
has been fulfilled or over-
fulfilled." "The foodstuffs
industry has not yet developed
vigorously." "Small industries
and handicrafts . . . have been
restored and developed to a
higher level than in the prewar
period." ("The tight industAy
. ec ton and gna,Ln and good
pnoducto pnoce, Lng ,5ecton mwst
be v..gonou ty developed . . . .")
"In 1974, we must strive to
achieve a 16 percent increase
in total agricultural output
value and subsidiary occupa-
tions compared with 1973."
". . . no broad comprehensive
change has been made in agri-
culture yet." "For many years
now, the cultivation of
subsidiary crops and industrial
crops has not been given due
attention. This year, it still
cannot reach the planned norm."
("In 1975 we rnuzt .o'tlu.ve to
i.ncicea4e totaY agn,i.euttmat output
value by 8.6 pencent oven 1974,
with an Lncnea, e 06 6.5 penc o.nt
in 6anmJng and 16 percent .tk,
4toci bneeding . 11)
"We must . . . step up hog-
raising by the collectives and
families of cooperative meribers
to increase the number of hogs
to 6.2 or 6.3 million in
1974 . . . ."
"The herd of hogs has been main-
tained and has farther increased."
("In 1975 we must #nei, ia4e the
numbers og hog6 by 3 peAcent oven
1974 and incnea,6e meat pnodueon
by 14 peneent . . . )
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1974 Targets
"in 1974 we must increase the
volume of grain production from
16 to 18 percent compared with
1973, and 3 percent compared
with 1972." "We must expand
the area of industrial crops
and cultivate them intensively
in order to reach 220,000
hectares in 1974, an increase
of 16 percent compared with
1973."
"In the 1974 postwar plan, the
volume of goods transpor.;id must
increase 32 percent in tonnage
and 34 percent in ton-kilometers
over 1973."
1974 Plan Fulfillment
Tangc,'t6 on 1975
"The yearly paddy output surpassed
plan norms by 8 percent and
increased 21.4 percent compared
with the previous year." "The
5th-month-spring crop area has not
reached the planned norm. Rice
transplanting has been behind
schedule in 16 percent of the
cultivated areas. The rice yield
has varied from one locality to
another." " . . . cultivation of
secondary crops and industrial
crops has not been given due
attention. This year, it still
cannot reach the planned norm.
("In 1975 gn.aJn output mu4t Lnen.ea4e
by 5 to 6 peAcen eompwLed with 1974,
a yeah of bumper nice hanvebt."
"The votume oU Seconda;ty cn.op
pn.oduc ion . . . muot incAea6e by
monk than 40 pen.cen:t compared with
1974.")
"The total volume of transported
goods in 1974 has increased by 30
percent compared with 1973 and 60
percent compared with 1964." "The
transportation of goods to the
mountainous provinces and the former
fourth region and the communications
and tra+tsport activites in the rural
areas are still unsatisfactory."
("We .6houed z.tnu.ve intens.iveey to
.tncJtecv4 e . . the vo.eume o6 good~5
tkan ponied in the countky by 22
pe'tcewt . . . .")
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1974 Targets
1974 Plan Fulfillment
Tak c.tb bon 1975
"It is anticipated that the
postal. service output value will
increase by 3.2 percent compared
with 1973."
"In the years ahead, the annual
rate of construction must double
compared with 1973. Nevertheless,
in view of the present numerous
limitations, . . . in implement-
ing the 1974-75 capital
construction plans, we must
concentrate capital and construc-
tion capabilities primarily on
meeting the urgent needs."
in 1974, the capital
invested by the state in b-iilding
economic and cultural projects
will increase by 50 percent
compared with 1973. The capital
invested in construction install-
ations will increase by 32 per-
cent. Of the total amount of
capital invested in construction,
investment in construction of
production establishments
amounts to 84.7 percent, of
which 34.2 percent is invested
in industry and construction,
nearly 20 percent is invested in
agriculture and water conservancy,
and 17.2 percent in communications
and transportation. Investment
in the construction of projects
unrelated to production amounts
to 15 percent, and investment in
building housing facilities
amounts to 6 percent."
"The postal branch has endeavored
to meet the requirements for
economic rehabilitation and
development. However, the quality
of its work is still poor." ("It
Z anti.c,ipa.ted tltc t the 1975 vague
06 po,6.tce puductivity Witt
Lncnea6e 7.6 pe't.cent oven 1914.")
"Capital construction in general
is still slow and of poor quality."
("The capita.e con tnuct,i.on manpowe)t
and equ,tpment and 6und~s don the
econonuc and cu,etunae be.ctons .in
1975 will Lnc tea6e by 41.5 peneent
oven 1974, w.i tlt. con.S thucti.on 6und4
.tnc)te"ing by 26 pvteent. 06 .the
totae .inve.6.tment don eons,tAuct%on,
6und4 eon higher grade pro j ects
wL& account don 54 pencent anr'
bon euoen gn.ade onus, 46 peneent;
Lnve/,itnent don new eonvstAuc:ti.on
pro j ec U 81.5 peneent, and .i nve a t-
ment eon pro jee ts ct n.eady begt.n
26.4 pe'teent.")
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1.3 JANUARY 1975
1974 Targets
it
. . . in the 2 years of 1.974
and 1975 it has been planned that
approximately 1.4 million square
meters of housing, . . . will be
built. In 1974 alone, 610,000
square maters of housing will be
1)111.1.1. "
"The value of exported goods in
1974 must increase 31 percent
over that of 1973 . . . ,"
"According to the 1974 state
plan, the circulation of goods
sold in organized markets will
increase 10 percent over 1973."
1974 Ilan Fulfillment
langeth bon 1975
" millions of square
meters of new housing and tens
of thousands of classrooms
have been built in the past 2
years." "However, the buil.d-
Ing of houses, schools and
hospitals is still slow and far
from meeting the demand." ("(ale
w.Le.e bu.i.ed appnox.iarnateec/
650,000 squane metens o(j hoto,ing
we, th con4.t)lue-tiovi ,i.nve4 tmen.t
inuteaz.i.ng by 78.5 pe'i.cen.t oven
1974, .i.nc.euding 400,000 6quavie
-ne-tehb 64 hou.5.i.ng to be bu.U t in
the c-iti,e,5 and concentiL ed
-indutn iae ee-titetus. " )
"Efforts have been made in the
export of goods under postwar
conditions." ("(!fie shomed
,s t)c,ive .innte-vs.ive.ey to -i nc)c.ea s e
. . . the vague o j exponted
goods by 30 percent ove,'c 1974.")
"In 1974, the circulation of
retail goods sold on the state-
organized market has increased
2 percent over 1973 and doubled
that of 1965." ("It is p.eanneit
to inc)Leas e the ,to.tae amount o
good to be so-rd at ne.tat.e on
the organized mahhe.t by 18 pen-
cent. Goods -so.ed on the
uno,7gan,i.m: man.he,t w.ie.e. decnease
by 48.2 pencent.. It i.peannect
to i.ncAeaz e the amount O(j goods
ne,3enved {ion the o/cc-c .zed manhe.t
{nom 72 petcevvt in 074 to 86
pe aent ,in 1975.")
Approved For Release 2005/06/29 : CIA-RDP86T00608R000200150001-4
 Approved For Release 2005/06/29: CIA-RDP86T00608ROOOZ00'I' 6 1-4
1974 Plan Fulfillment
1974 Targets Targes {on. 1975
"In the 2 years of 1974 and 1975, "Labor productivity in the
the state-run production branches industrial, construction and
must reach and exceed the prewar transportation branches ful-
labor productivity level . . . ." filled the plan norms and
increased from 15 to 20 per-
cent over 1973." ("We shou,Pd
.s c,ive .tntewsiveej to
.Lncnease . 6oci.ae #abon
output by 14 petcen-t oven.
1975.")
Approved For Release 2005/06/29 : CIA-RDP86T00608R000200150001-4