SURVEY OF ECONOMIC DEVELOPMENTS IN THE EUROPEAN SATELLITES UNDER THE FIRST LONG-TERM PLANS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A009200010018-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 160
• Document Creation Date: December 23, 2016
• Document Release Date: October 29, 2013
• Sequence Number: 18
• Publication Date: December 20, 1956
• Content Type: REPORT

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SURVEY OP ECONOMIC DEVEIOPMENTS IN THE EUROPEAN
UNDER THE FIRST LONG-TIMPTARS
ORR. Project iO.004
20 December 1956
VARNING
This material contains information affecting
the National Defense of the United States
vithin the meaning of the espionage lave,
Title 18, USC, Secs. 793 4nd 794, the trans-
mission or revelation of vhich in any manner
to an unauthorized person is prohibited by law.
=URAL
tri
MENU AGENCY
Office of Research and Reports
STAT
STAT
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OBEWORD
This report consists of surve of major economic developments in
each of the European
llites except Al
term plans. East Germany and
a Six Year P
lug the first long-
d Five rear Plans and. Poland:
gary s Five
ending in 1955. Czecboa
Tear Plans ended, respectively,, in 1953 and 1954. Bulgaria's Five Year
Plan for the period 1949-53 was concluded one year ahead of schedule,
in 1952; the Second Five Tear PI= runs from 1953 through 1957. The
discussion and 0atlstial series .e. these surveys generally have
been extended through 1955 for Bulgaria, Czechoslovakia., and HUngary
even though their first long-term plans ended earlier.
The survey for each Satellite contains a review of (I) economic
policy and economic plans during the peri (2) the principal
achievements and shortcomings in the performance of the economp?
(3) the allocation of labor and investment expenditures by the tate
in-0*w to promote the growth of output, and (4) developments within
industry, agricultur
and other major sectors of the econaur. In
addition to the Surveys for the six countries, there is an introductory
section dealing with the economic growth of the area as a whole since
1950. In order limit the report to a reasonable length, it has of
course been necessary to omit discussIon of some relevant topics and to
treat others very briefly.
SEERF
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Summary ?
? ? ***** f '?
Ott
COMMITS
? S ?
, ?,
122m
I. tr uct n: Satellite Economic Grovth Since 1950 . . 5
A. ende in Gross
B. Changing Pattern of Output ?
* ?
9
it.
B.
? ? ? ? ? ? **** ? ? ? ? ? ? ***** 0 ?
ral Policy an chievements
es in Potar Jeonornte t ? ? 0 ?
12
1947548.
** ***
. ? ******
14
1949-53
? 4 ?
15
3.
1954-55.
? ? ? S*
16
Major Sectors of the Economy
1.
? ? ? ? ? *
?
? ? ?
17
a. Pr
?
? ? ? ? ? ?is a*
4,00
17
b. Allocation of Resources to 12S 6
? ? ?
8
? Agriculture ? ? *
? ? ? ?
19
a.
uction Trends
. *****
??
a
4
?
?
?
19
b.
Food Availabi 1 t ties
. ? . ? .
? .
.
4
6
6
4
20
CO
Socialization
3. Foreign Trade 4 4 ? 6 ? ? ? ?
4. Other Sectors
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24
I
.4
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? ?
Czethosioirakla
A. General Po
B. Use of Res
SECtttli
and
* ? ? ? I ? 1 ? ? ? * ? ?
te BO
? I * S 4 ? *
Dee1opiflent ? Al
? ?
?
? **** * ? ?
?
*
?
?
4
?
2.
Inves ?
?
? 0 **** ? * ? ? .4
?
?
?
?
?
?
30
C.
Os
vel
?
?
?
?
?
?
3)
1.
1914-7-1413
Intensive in
_ea on, i9 k9-53
.
.
.
ConsoUdatiort, 1954-55. . ? ? ******
'eyofjor Sectors of the ? ? ? ? ? ?
? ?
34
34
a. Principal. Developments .
3I
b. Analysis o Pij3jt..
35.
c? Aflonation of Resouroes to Zustl7
.
? .
35
? ? ? ?
36
a. Production nds ? ? , . ? ? *
?
***
36
b. .
37
38
d. Investaeu
.? ? ? .
38
Foreign Trade ? 4 ? .0 ? ? ? ? ? ? ***
39
Other Sectors . ?
? ? .
14-3
r
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-
IV. East Germany
?
A. General Poitcy and Achiev ts ? ? ? . ? ? ? 144
Intr.
uction
. .
2. Growth of the Economy ....... .. . . ? 4 4
3. Change
Distribution of Output ? ?
a of the Economy
1. Indus ? ? ?
a. Production Tre
b. npower: Investment, and Productivity . .
45
47
48
2.
Agricul ? 0 ? ?? .4
?
53
tion Trends
..
0
?
.
* 4
?
53
b. SocializatiOn
55
vestment and
?
?
4
?
?
?
?
? 0
?
57
Other ? ? ? .4
0
?
5
0
?
*
...
?
S 4
?
? ? ? * ? 0 I
A. it?jor Ze
B. Achievements under t
e and Prob *****
t Five Year Plan
(1950-5) . ... . . ? ? ? . ? . . . ...
1. /ntroduttion
. 'Para. of
Production
on
1 40 k ? ? r ? ? ? ? ?
Thilargernent of Industrial Capacity . . . .
or Proictiv1ty
SECRET
66
69
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Use of. Rosources to Promote Ea
. Manpower
. a .
*
a
? ? ? ? ?
Inveatment
. ? ?
?
?
*****
D. Survey of 14a-jor Sectors of
mere]. Ec
2. In
???,
* a ? ? ? ? ? a
nomy ? . . ? ? .
Growth ???? *****
? a ? * * * ? * S a ? ? a
tion Trends
b. Principal b
71
76
76
? 76
*** ? * ? ? ? ? ? ? ?
Agriculture .. ? . ? ?
*** ? * ? * ?
? "? ? ? ? ? ? ?
?
? ? ?
ecti
? ? ? ? ? ? ? ?
?
? ? ?
C. ion ? a
S ? 111 a .4 ? ? ?
?
? ? *
44
TranW:Xrtat UM a 4.? ? ?
? ? ? ? ?4???
?
??-?
5.
Rousing . *****
? * . 4 a
a
6.
? ? ?
? ****** ?
4
4 I *
7.
ign ? ?
VI. Poland. . ? ? . . ***** ? ? ?
A.
Policy a Achievements ? ? ? * ? * ? ? ? ?
of Resources to Promote EconomicDevelopment
4 ? 4 * ? ?? ?
? Inve n ? ? ? ? ? ? ? ?
Ong and Control
SECRET
76
81
82
85
85
86
86
90
94
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ea in
rage
lopment 96
a. 1947-49 .... ? * 6 41 AI ? 14 ? e
b. 1950-53
c. 1954-55 ? ? ? ? ? ? * 44 ??* ? ? * ? ? ?
97
B. Survey of Major Sectors of the &orlon
Industry . ? . ******* ?
a.Prim 1 Developments . . ?
?
.
.
.
? ? ? ? ?
? 4 41 41
100
100
100
b. AnaIrsis 0
***
101
c. Allocation of Re a
? ? ?
103
2. Agriculture . ?? le
?
?
4
4 * ? 4?
04
a. ?roiuct1on reths
104
b. Food. AvailabIlities .
105
e. Socialization ? ? . ?
05
d Znveafnent and power ? .
?
*****
106
Foreign Trade . ?
107
Other Sectors * ? ? ? ? * ?
?
?
?
6. ? 0 6 ?
Ina.
Rumania
115
A. Gene Policy Ach events
5
'
B. Economic Plane ? ? ? ? ? ? ? ? ? A
?
*
4
41 0 4 ? ?
1, One, Year Plans for l9i950 *
* ? ?
2. First Pive Ye Mans 1951-55 ?
?
117
4ttAI?ET
VA
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? SECRET
0. Survey of Ehjor Sect?rs of the Economy
1. Industry . A t
0 00 ? 66 ## ? ? r ? ? * ? ? ?
Agric
a.
tura . ?????????????
b. Nonvoter
uct
Collectivization
?????,?????????
??????????? 4 ?*???
kik!,
:page
120
122
k
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TABLES
A-1. EttimWted Gross National Products of the European.
Satellites, 1938 and 1948-55
A-2. Estimated Gross National Product Per Capita in the
European Satellites, 1938 and 1949-55
A-3. Estimated Changes in the Gross National Products of
the Satellites, the USSR, and Selected Countries of
Mest'ernEurope, 1938-55 and 1950-55
_
A-4. Estimated Gross National Product of the European
Satellites, by Sector of Origin, 1938,1950, and
1955
6
8
9
10
A-5. Indexes of Estimated Production by Economic Sector
in the European Satellites, 1938 and 1948-55 . . . 11
B-1. Indexes of Estimated Gross National Product and
Production by Economic Sector in Bulgaria, 1938
and 1948-55
14
B-2. Estimated Population and Labor Force in Bulgaria,
1948 and 1952-55 18
B-3. Gross Fixed Investment in Bulgaria, 1949-54 . . . 19
B-4. Socialization of Agriculture in Bulgaria, 1949-56. 21
B-5. Geographic Distribution of the Foreign Trade Turn-
over of Bulgaria, 1948, 1952, and 1954-55 22
B-6. Imports and Exports of Bulgaria by Product Group,
1948, 1952, and 1954-55
C-1. Indexes of Estimated Gross National Product and
Production by Economic Sector in Czechoslovakia,
1938 and 1948-55
24
27
C-2. Estimated Population and Labor Force it Czechoslo-
vakia, 1948 and 1953-55 30
C-3. Planned and Actual Output of Selected Products in
Czechoslarald140 1953 and 1955 36
C-4. Socialization of Agriculture in Czechoslovakia,
1950-55
C-5. Geographic Distribution of the Foreign Trade Turn-
over of Szechoslovakia, 1936-38, 1948, 1950, and
19534455
?
39
41
V 1"
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SRAFT.
D-1. Indexes of Estimated. Gross National Product and
Production by Economic &atm. in East Germany,
1938 and 1950-55
le6
D-2. Estimated Population and labor Force in last Germanys
1950-55 51.
D-3. Plarmed and Estimated Actual Gross Investment in
Fixed Capital in East fkrmany during the First Five
Year Plan, 1951-55
52
D-4. Socialization of Agriculture in East Germany, 1951-
55 56
D-5. Indexes of the Foreign Trade Turnover of East
Germany, 1950-55 59
D-6. Imports and Exports of East Germany by Product Group,
1950 and 1953-55 60
D-7. Geographic Distribution of the Foreign Trade Turn-
over of East Germany, 1950 and 1953-55 61
.2-1. Planned and Reported Actual Increa in National ,
Income and Gross Production in Ka anomie Sectors
during the First Five Year Planil
70
2-2. Estimat.ed Population and labor Farce in Hungary,
1949-55 73
E-3. State Capital Investment Under the First Five Year
Plan in ittingarYp by lfajor Sector, 1950-54 74
2-4. Indexes of Estimated Gross National Product and.
Production by Economic Sector in,c1938 and. 1940-55 77
?
2-5. Planned and Actual Output of Selected Products in
Hungary, 1954-55 79
2-6. Indexes of Per Capita Production of Selected Food-
stuffs in Edngary, 1950-55 82
E-7. Socialization of Agriculture in Hungary, 1949-56 . . 83
F-1. Indexes of Estimated Production in Selected Econcesic
Sectors and of End-Uses of Gross National Product
in Poland, 1948-55
91
7-2. Estimated Population and Labor Farce in Poland,
1948-55 93
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F-3. Distribution of Centralized Investment in Poland,
by Major Category, 1947 and 1949-55
F-3a. Planned. and Actual Output of Selected. Products in
Poland., 1955
F-4. EMployment in Principal Industries in Poland, 1949
and 1954
Page
95
102
io4
F-5. Socialization of Agriculture in Poland., 1949-55 . 106
F-6. Imports and Exports of Poland, by Product Group
1949 and 1953-55
F-7. InaPxoks of the Imports and Exports of Poland by
Selected.Product Group, 1949 and 1953-55
F-8. Foreign Trade in Selected Commodities of Poland,
1949 and 1955
109
110
F-9. Geographic Distribution of the Foreign Trade Turn-
over of Poland, 1954=1955 112
F-10. R.tail Trade Turnover in Poland, 1949-55
0-1. Indexes of Eetimated Gross National Product and
Production in Selected Economic Sectors in Rumania,
1938 and 1948405
u.4
116
0-2. Plaaned and Actual Distribution of Capital Investment
in Rumania during the First Five Year Plan, 1951-55. 119
0-3. Planned and Actual Output of Selected. Products in
Rumania, 1950 and, 1955
0-4. Estimated Population and Labor Force in Rumania,
1948 and 1950-55
Atpendix
1. Output of Selected Products in Albania and Bulgaria,
Selected Years
2. Output of
East ,
Selected Products in Czechoslovakia and
Germany)
3. Output of
Selected
4. Output of
European
?
Selected Products in Hungary and Poland,
Years
Selected Products in Rumania and in the
Satellites, Selected, Years
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120
121
124
127
130
133
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5. In s of Average Daily Per Capita Consumption of
balories in the European Satellites,yrevar
Average, 1948/49, and 1951/52 to 1955/56 . ? . . 136
6. Officially Announced Increases in Gross Industrial
Ttoduction in the European Satellites, 1949-55 . .
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SURVEY C ECONOMW Dimpopmmns Ts TEI EUROPEAN SATELLITES
UNDER TEE FIRST IDNG4ER24 PLANS
Sustztry
The econc deelcpment of the irope?
under their
first long-term plans, which covered from 4to 6 years in the different
countries during the 1919-55 per
Sovietization oiintttotious, increased in
comparatively hien but deUnin
products. These general trends
punct.uated by sce drastic
relazattcn of the agricultural
of seriousibe
-
of confusion az
administration.
ized by further
rates of growth in, their national
g the period were,
In productIon
s,
tion effort,
r ence
,41/
c% within the econnies, and a considerable degree
t fun
twee of erratic
C planning and
objectives of the SateUl.te reginea probably
were maintenance of high r.ate s of enonomie growtfothrough preferential
decelonent f heavy iiMiumore complete socialization of agriculture
and greater interdependence and. cooperation with other Bloc countries..
AI hough these
modifications in
as erally adhered to, there were certain
ecific Objectives during the pe
ificant
shor comings. in the tarrying out of the, plans. The gr.owth in the national
products during the period was rapid, but with the end of the recovery
from the effects of the war end the lessened opportunity to mobilize
underutilizedsources, the rates of increase declined in most Satellites.
the ex aXon of national into= were not reached
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The orig
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6icat
in most cases, j4ging by the production data available for a. sample of
products, and. evemofficiaj. re.p?s did. not ciats that the revised., higher
goals adopted in 1950-.51 for the termInal years of the plans were reached
or even approaehed except in east Ocr
Outside of ariculture,, the Satelliteeconomies were largely
socialized at the start of
exception East
since
eained.en exception at the end, of t
private firma still accounted for 15 percent of the gross industrial
output in 1955. The c
by substant
eduction in t
1953, and. a renewed caaign in 1935 and. 19% h.haer made up some
9335 and, in eer't,dnccrnntri a? raised. the share
of amble land under socIalized nership above jar levels. Well
land.over halt of the in the Satellites is still in private ds, however.
Bulgaria, vhich had socIalized.65 percent of its land by the end of 1955 4444-'
Itnearly 80 percent by April 19561; has come closest to the long-range
0. early years of
agriculture vas characterized
Le p
new c
a leveling off Or
zed in
of the
as,
goal of complete so ialization of
proport
land. in the ccialint seetor at the end of 1955 ranged from. 30 to 36.
percent in Ctec slovakia East Germany, and Hungary And approximated
one-fourth of e total area In
in the ease of economic irterdendence and regi.onal specialization
in the Banc, reflectedw in the. relative Importance of the foreign trade of
the Satellites with each. other
th other Bloc countries, there were
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notable increases in the early years Of
had not already cons2erably reduced the
vith Wes
as in each country which
of its trade carried on
of Satellite trade was
halted after the, adoption of the "new course" Policy callingfor renewed
trade with countries s Moeespecially with underdeveloped areas
couldwhich pr
Greatly increased attention has been given in the 1 s to
coordination of their prod tion and iavestment P ctaliza-
tion in proict1on,' organization of oint deeIoent projects, and
raw materiais.
sharing of technic
Economic Mutual Assla-
tance and its specialized committees hairs held numerous meetings since 19530 as
a result of which certain major goals for prod.nctionand foreign trade under
the Five rear Plans for 1956-60 have been coordinated.. Thsofar
effect of these efforts on the inter4endence of the Satelliteeconomies
can be measured quantitatively (in the geographic distribution of their,
it appears that they were partially of set in 1954'and 1955 by the
sizable increases which occurred in tradeI s. After
co se", such trade c e rapidly than trade within the
tleiAarly in the case f tie more dee1 Satellites. Intra-
Bice trade continued to m.m.re up a very astantinl share of each Sateliitees
tOtal foreign trade on the other hand, and at any such lewel of intra-
Bloc trade, the effortsof these countries to increase economic coopers-
tion, specialization,
coordination of plans can be expected eventually
to mako a significant contribution to, their economic development.
.01)
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A prominent part of each tong-term plan -- and the key to the
etteinmPnt of the large p1arned Increasesoutput -- was a program
of intensified industrialization. Xndustry had the highest priority
In the distribution of
r and. investment:
.production were realized.Over-all produe
were not reached inmost of the co
!al nowever,
Ins in
ts for industry
of
output among the varioUs industrial products was poorly balanced. The
tendency of
on of capital equiprnent to outrun the supply of
raw materIals and to Overwhelm the output of light industry not only
held growth rates below Whet would have been possible with a more
balanced expansion of industry but so severely limited improvements in
living standards.
In additi n to groviug pressure on the raw materials base, there
was a tight
Jag up of supp
ts. Transfer. of
wer for industry and other-non,
industry from agriculture
became more difficult, and. the more- favorable policy adopted for agri-
culture after the nev course/r required a halting or reversal of this
vement in certain countries. By the end of the plans,the agricultural
labor forces in Czechoeiova
ttvely small; only Polaz,
prospect of drawing sizable
future.
East ?
end Hungary were coare-
id Bulgaria appeared to I we amoh
rom Agriculture in the
The most distinctive feature In the distribution of the national
products of the Satellites durlpg thIs period. was the large allocation to
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ii
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Oti..(0111L
Lnveatnerrt. 1xcept
on production through
et
otantial drain
a ttaas and occupation costs,
gross investment evidently amounted about one-fourth of the national
"new
Viet
4/
produc
ratio apparently was red.ueet1 6:t at'
when the scheduled Inc -ases. in i
from eextain eornir ea were scaled down, but it
standards.
IMprovements in living
the! high level of
cut back
tact Germany), the cul a
and the poor showing in housing constructi
been ach1eved since 195
anti 4dreaa.
atelt1te.
high by Western
were held down by
Same modem
materially, -_
gains in
e disturbances_ in
it in amBarY ahoy that there is still an intene
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gcitions in the
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I. Introduction: Sate
A. Trends in Gross National Product.
c7v7T-71
Its Economic. Gro
De
-)1(-
ce 1,9 O.
of raw materials and labor, gen Under.
full illment of nveatnnent plans, and the
on and
flag from
the abrupt changes in their principal economic goals, the Europeen Satellites
succeeded in odhotantiallyincreasing their total Outptt of goods and
services during the period 1951-55. The gross national product- (GW) of
the Satellites (excluding Albania) is estimated t $60 billion in 1955, or
about two-fifthsmore than In 1950. This represents a relatively high
average annual rate of growth of over 7 ?
individual countries ranged fr
year period, ac
Of products Table A
,it. The gains in GNP for the
32 to 60 percent during the five
lculatione based On output data for a sample
the area as a whole
entries except East Ge 1955 'was also nneh
h of the
1938. lost Germany apparently has da more rapid sin in output
than the other Satellites since 1950, but the startIng point for this growth
was so low- that the prewar levelreacheduati .95 .
The output of the Satellites is concentrate largely in Poland,
"test Germani, aM Czechoslovakia, which together accOunt for over f ur-
fifths of the totals Bee.
of the considerablelay which occurred in
the economic recovery of East Germany, Poland. has assumed the former's
preur position as the most productive area among 'what are now the European
Satellites.
a's GNP,. Which ranks fourth in the group, is rather small,
considering the sire and population of the country. The outputs of the
&471pit&4, 4-Cdto-ki 64.1 1-441f4.4? awe a eth,
-ea/ eci a pao& Vo tite. fru-11-C ,t/ slat act,
wL Asitcoe s,dz-e4.174914.44.
aft
OrtThns-.7
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Table Al
Estimated Gross National Products of the BUropean Satellites !/
1938 and 1948-55
2-2.g la
Billion 1955 U.S. Dollars
la IM 1253. 122 1221 12211. I=
Bulgaria
1.03
1.11
1.12
1.19
1.27
1.33
1.42
1.56
1.68
Czechoslovakia
7.30
6.71
7.18
7.93
8.34
9.10
9.79
10.3
11.1
East Germany
16.1
7.81
8.90
10.8
12,5
13.9
15.0
16.3
17.3
Hungary
2.45
1.98
2.29
2067
2.94
3.15
3.40
3.42
3.62
Poland
14,5
11.9
14.6
16.7
17.1
17.9
19.2
20.7
22.1
Rumania
".0.7
2.60
2.71
)3.30
q.p
...3.1.,8
3.28
4.48
Total
44.4
32.1
36.8
-gaft
42.3
45.4
48.7
52.5
56.3
60.3
Indexes (1950 x 100)
Bulgaria
87
93
94
100 107
112
119
131
141
Czechoslovakia
92
85
91
100
105
115
123
130
140
East Germany
149
72
82
100
116
129
139
151
160
mingAry
92
74
86
100
II?
118
127
128
136
Poland
87
71
87
100
102
107
115
124
132
nucenia
103
87
91
100
111
111
123
134
150
European Satellites
105
76
87
100
107
115
124
133
143
a. Excluding Albania.
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other countries reflect their small populations and comparatively low
levels of productivity. The marked difference in productivity between
East Germany, Czechoslovakia, and Poland, on the one hand, and RungarY,
Rumania, and Bulgaria, on the other, is clearly shown in estimates of
GRP per capita in the various countries. In the first three countries,
ahat
output per capita ranged from4$800 to $1,000 in 19550 whereas in the latter
three countries it evidently fell within the limits of $200 to Ow (see
Table A.2).
The growth in Satellite GNP Generally paralleled the rapid
expansion of Soviet output during the 1951-55 period. In 1955 as in 1950,
therefore, the GNP of the Satellites probably amounted to about onew4hir4-
that of the USSR. The USSR has, however, greatly outdistanced the Satellites
In economic growth since 1930, when the total output of the present-day
Satellites is believed to have exceeded one-half that of the USSR. Although
a substantial portion of the estimated Satellite ow co $60 billion is
needed to provide even a ettieinva standard of living for the area's popula-
tion of over 94 million, the Satellites nevertheless constitute a signifi-
cant addition to the economic capability of the Bloc.
The Satellites, like the USSR, have achieved rates of economic
growth since 1950 which are generally higher than those of the major
countries of Western Europe, excluding West Germany. A comparison of out-
puts in 1930 and 1955 is less favorable to the Satellites, however, and is
decidedly =favorable in the case of East Germany (see Table A-3).
7
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AlWismitz Table 3er A- Z
Estimated Gross National Product Per Capita in the European Satellites
1938 and 1948-55
1955 US
liars
1-930,
1948
.4.29
1950.
125,
1953
1954
1955,
Bulgaria
150
160
16o
16o
18o
.1952
180
190
23.0
220
Czechoslovak.ia
500
550
590
640
670
720
760
800
850
East Germany
970
42o
480
590
680
770
840
920
990
Hungary
270
220
250
290
310
330
350
350
370
Poland
460
500
600
670
680
700
730
770
810
Rumania
200
160
170
180
200
200
220
230
260
European Satellites
470
370
420
480
53.0
5443
58o
610
65o
a, ExcludIng Albania, whose product per capita probably is eamewhat less than that of Bulgaria.
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Table A-3
Estimated Changes in the Gorss National Products of the European Satellites, 2/
the USSR, and Selected Countries of Western Europe
1938-55 and 1950-55
Percent Increase
European Satellites
Bulgaria
1950 to 1955
3.938 to 1955
43
41
36
4- 4:
Czechoslovakia
40
52
East Germany
60
7
Hungary
36
48
Poland
32
52
Rumania
50
46
USSR
38 1')
460- 7g
France
23
46
Italy
31
38
UK
13
38
West Germany
57
49
a. Excluding Albania.
b. Percentage c s for Western European countries are calculated from index
numbers in. source f (France and West Germany in 1938, recalculated to a 1952
base) and. source 2J (all others).
B. Changing Pattern of Output.
The industrialisation of the Satellite economies, which was well
tm4e4way by 1950, was continued and even intensified during the succeeding
five years. In each country, the resources at the disposal of the regime
were foeused on the development of industry. Large increases were correspon-
dingly required in construction activity and in transportation services,
although there was little provision for investment in transportation facili-
ties. Estimated output in industry, construction, and transportation and
communications grew substantially faster than output as a whole and by 1955
SECT
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?
e
? 04,21;!-.
greatly surpaese& the prewar accoMplishment Table A-5). After several
years of neglect, agriculturaL output rose nerately in 1955, but this
probably was the first time sincethe war that the prewar level of output
was cloae1r approhed. A rough inicatton of bow thees divergent growth
rates have affected the
of total Satel
major economic sectors-is presented in Table A-4.
Table A-4,
ut =bug the
iznate GreS Be anal Product of the gbropean Satellites,
by SectOr of Origin
1938, 1950, and 1955
nt of. Tots
1938
1950
195,5,
Industry
32
35
41
Agriculture amd e,t.tiet/
32
30
23
Construction
5
5
6
Transportation ami commUnications
6
6
Trade and services
214.
Total
100
100
100
a. Excluding Albania.
SECRET
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Table A-5
Indexes of EstimatedProictiou by Economic Sector in the
1938 and. 1948-55
4.2g
1948
Gross national product
105
76
Industry
95
73
Agriculture awol
112
78
Construction
101
54
Transportation and enml?atto.'
77
76
CoD
Trade and services
118
82
CA*
1.11:1
a. cluAi gAl a.
85
89
72
ea
91
tellites
/9,50
/00
C?,-
rri
VU0
:KW
rri
moot
1.2z
107
112
99
1.17
114
107
3_955
100
100
100
100
100
100
115
126
98
140
124
112
124
140
100
156
135
121
133
152
103
163
142
133
143
167
110
165
153
140
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?mearaKx
II. Bul01.
1. General Policy cl chievementl:
The Communist goversmen
designed to transform
?
gelt gricultural.er:
rnctezt as induatrial-rieultural Whereas gzi
produotion p 4cintted in. the national prod.uct in prewar
and ,_,.,gricu3.ture have contr,tbute4 &tbout .equal shares to the
OC
output
recent 3reP.re. BStth with 1955, the value of output in industry
probably emelt
in ieu3.tur?Despite the change in
structure. of the national outpu
force ims still engaged in agric
ulgaria m progrnm of iz
two Five Year-Flans the first
1953. The Fl
ure In
55.
civ labor
Ustriallsation has been prompt
ve Yecr Plan was
began in 1949 :ma the se
but of the major production goals, only that for industry
od.
the end of I A, mem 55 perces o
portion than '
Wee CO
r f
7
imed
a,
ulgaria's
other SatLU
Having begun its ?econd Five Yer Plen in 1953 Bulguri is-out of step
with the other Satellites, whose current Five Year Plans began
1956.
Bulgaria offers c typical example of the eeutation of Crnt
economic deology, with its empbasi. on the output of producer goods vs
the bGsls for economic growth. Jhile producer goods output increased
about 3i times during the l 9-, period,
P-1(-
/2 SE
OH
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SUM'
. by about one-half, a
PrOCIUCtlon dato )67
to intelligence estimates based on sample
ire-building became c new branch of Bulgarian
-tor
WCS consideraly expand
until 1954.
.11101 vt negligible until 191,
44 ides, we try,
on probably we not eeded
It is estimated that the gross nationa pro6ct of B1grft
increased by about
anJuad
averegeArate of ab
6
during the
t.
949-55, or ut an tomes*
s to a substantial rate of growth,
but it le somewhat lower that the rates rgistered by t
Satellites. :lthough indexes 'of eztii
an impression of the ?
wvenss of *1*- development that hes
European
within- the various
sectors of the 5C0y. Over the 1949-55 period, Industry increased by
about 116 percent, for example, while agri
percent. (owe Activity in this i
sectors of' construction Ln4 transportation and c
doUbled. Trude
reflecting the ii
associated advance* in bse
?J ?uii
.(1!
by only 11
US
leired to have en by about
baniaat
on
educe tiony and o
SET
a
ervi
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Liao Imo
* The indexes of Industrial production whidh.are pre$
'Mime Satellites in Tables t61, (1.10 D61, E4i, 1, ard
are aggregated for *II. six, countries in Table Am$) ateve)
of net production, =These indexes are based on production data fora
of products* their accureey varies with the representativeneu of the sample
and the accuracy of the production data and the weights used in aggregating.
the production data. The officially amounted percentage increases in
industrial production presented for purposes of information in Appendix
Table6, p.. 137 refer to.. gyoss production. These statistios are useful
in analyaing the degree of fulfillment of plan goals expressed in the samo
term, but they are not in general comparable to the independently calcu-
lated indexes of net industrial production. Offici*114rannounced increases
in gross production meg differ from the actual increases in net productien.
(which are enlylepproximeted in the calculated ) for several reasons,
including thenges in the degree, of double-couning in the gross. index,.
(2) changes in the statistical coverage, of the gross Indus, and (3) bias
introduced into the gross index through the use of inappropriatm WU,*
for newproduoto
the
tee
3 a,
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MUtf
Table B1
exea of Estimated Gross National Produ -t and
Produ.ction by Etoomic Sector in Sulggria
1938 cm4 1948-5,
100
Gross nati ut
93
114
12a
128
Industry
, 110
141
165
177
16
Agriculture ,rai
fOrestrY
102
100
94
96
ol
96
99106
m
0Onstr1.ction
84
100
122
196
22I
2Z8
246
266
Transportation and
communication.
56
117
131.
148
163
191
210
R32
Trade and servicos
92
3.00
103
3.06
109
319
137
147
Since the assumption of power by the Commun
there have been
es of economic development. The first
phase (1947-48) waa a period of reconstruction ation of the
beginning steps in induetriel development
Phs (199-53)
eepecially in the direction of increased emphasie on het.
third paee began n 1954 Uoving the
d cetic changes occurr,a in this period, but oljustmenta were made in the
rte of growth of various sectors- of the econogy-
allocati
194T
The goal of
ugh
Year Pleras to reitoie, and in moot
eector? ezteed. prewtr lev a of produ tion.
3z!1ticuIar1y the Iroduett
social
lization was Omitted
ctric power. riYate Ell Ve
ven incentives end
SECRET
14/
n . The
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plan iv? s completed successf
agricul
over 1939
y but was underfulfilled in
s claimed that 1Z4fltDia1 'p
production
subetantial
2
ebout 80 percent
1 Over the
etonomy during thle Period. Mining, banking wholesale trade most
de was by into the stets sector.
194-53.
AUlgarlais First rive Year
electrifies i
Follovi
to 1 ustrrover
Gross
agricultural p
57
au.Zatton azL collectivi
of ecOnomic development,
heavy industry ov
percent and consumer goods output 7
prioritieg7 ii4atry was
? c
t70
or84z!icuiture
ifl gave priority
ght industry.
9pertent over 194B, old
s output Was to rise220
t ve cbout
t o otal
investment while orieulture Vas to receive lessthan 18 portent. 1/
Over
h. of ind share of
the development of heavy industrY.
Yee Ian was sd after Only
beau fulfilled.
1939 prices) r &had 55 billion lova to 1952, whereas
an output ?f 50 bLUi?n
untie
19)3.
rial
of this laim
for
luc
since the etUetc1 vge of the two values may not be the
is- ;r
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SECRET
0.1&At
same, In ase,Aet- utput trz 1952 wsdifferent from that
`fitak
the plan. OffIciLl deta indicate, for example,/pe plan for
metal-ore :mining vas over
respect/
percent beiow the p
prouct1ou of the
ustricl
by 13
us t
goals for
vas 70
42 percent,
-ed rapidly, ;,gricultural
below the prewar level, Production of industrial cro,r0
5
1938, however, apid rog.*e in
the aocialisation of
tn this sector dui. ng the
re sod nubx of collective farms
.57
10'percent of Sulgaria's crbie land
edditional k percent by state farms.
other 1'd coI1ectiviwtic was 1r1
theniri any other OF.Litellite.
3.
thaike
changes in e?ria4
introduction of tbrn "new c
were c4m1tted weve am
CuldaZtn.
aqmilikir*t__4divr ficOttan: in
by
iv/
taile
nt
2,740 By 1952, about
d by Ui
952 to t
tL stands
y for the yes
953. Certain
, for
ivos E.
of 1955, on
the
...la in 1955.
a r.rntt of the
coings in the ecoucay
ift to tiO
althou beavy
SECRET
A
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r '1:41
till receive major ewie,
mteriale und power. This
r netted particul n e le
and el quint to oitituin. these
policy, 4u1gari, blished
live Y
C
the period 19:J3
0
-nas.
try'54output origina
In prewar years$ but csuraAt of the (ounit emphasis on industrial
wee to be
cy va
minixtg
4eveiaent, the, v u
output prOhably 401t exceeds thnt of
agriculture. It is estimated that induetrial produt1on in 195 ua About
116 percent vbtm* that of 1948. The greattst
osnufecture of producers' equipment. The metal
the nei branch or cie
textiles in importance. 2/
PrOduction of bas
crude oil
utder C
until 1951 o
tog) now ranks efter food processing end
1
such es chemicals, brown coal
$ and uranium ores e. incree4sabetantiaIly
u , besic c calla, which
criuties for the production of calcium
csrbide. we extended, to include sulfuric
ynthetic ammonia,
/ 7
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nitro
rtilizers soda &an,
tie
ion of
the Satelli y 1957.
ts
n
orts. Bulgaria began
,I954, and row- become? the third-largest ?rodwer
ion tin the produc ion and
solid fuels
troleum 46 ieU. Although
refining of crutie o1 Is rea1ie, the countryie-self-
(excluding.ital1ngioai. cote) will be extended
production of electric power was four time as large in 195 as in 1948
It cont .u04 toles. behind
b.
0.
of fl ourcee to Znd
X4ustz7 has become one of the majorsectors in the
Bulgarian economy as the result of the riotit hich it lute enjoyed in the
allocation of resources under the Communist regime. Mbile the agricultural
labor force increased only slightly over the1943-55 Period, the labor force
of the expansion in he non mita
Table Vi-2
one-half (
Oto
ble B-2), Most
Estimated Pop ion and Labor Force in Bulfpria
1948 and 1952-55
industry.
as
Po'ulatton
Civilian labor force
Agricultural
-
Nonagricultural
1911-3
7:loo 7,230
3,630 3,770
2,850 2,870
700
Go
11-23
7,370
0340
2,070
*51k 1222
7,470 7,570
3,990 4,160
2,920 3,020
1,070 1,140
Avera,ee of eatimates for the beginning d end of the
Th attern of gross fixed inveatneat e
did not change much in the years 1949-54. During the First
Declassified in Part
7' /-/
? z 4, :4 0-bi
rear
- ';;?w.!.4. 47, /7/!
4e_ 43?C?
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6gRE'lr
Plan (1949-52), industry *coo ed for 33
of this vent to heavy
Year P the
t of totsi investment; most
In the first 2 years of the Se*Cate Five
of the irst Five
eive e.Ut1y lii
end
).
Industry
Hee industry
LtIt indUatry
Agriculture
Rousing
Schools and other culturia
establishments
oath end social
establishments
Other
Total
257 137
465
467
1 2 1954,
1,54 1,833 2,249 2,3o3
1,616 1,603 1,943 20014
233 306 294
322 707 667 773 93;
503 333 431 495 760
103 133 151
62 49 54 54
1 1,23q 1,829
91 3,521 4,339 5,022
a.
Incii4lngunplanned inves
a. Prouction 1reM
the on*1product despite the industrl on effort,
below the 1943 level until 1954.
of
the socialized .
and breeding atoek. Agricultural production incres*ed no
UCRET
Part of
d et or
sector. Even
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-
d 1935 in reaxions. to the change*
still. balm
and goe
production of food crops. is esti*
level in 1955.
o triel crops
in 19t3.
b. !0o4 A lab e
poor ves.tber eot&ttons geeaUy
e te
1933
leve:
5-
1.938
Five Year Flan (see
Meant gains viers made duringthe ,o
955/56 food consumption
bilPer than the
supplies ?f a
1 standpo
an4 oils b*ve been s te.
Socialization.
Socialize ion of
rapidly in Oulgarla
ibuting to the
regime to assist poo
it was not
Ce
ve aovcaent in,
t.me bean earlier end moved more
teUite.
Collect 1,
40
ipal
of
LtI
9.191#0 but
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lasted until about mid-1951. At the end of the year, same 57 percent of the
country's arable land was in the collectivized sector of agriculture. Col-
lectivization proceeded very slowly thereafter until early 1956, When there
was another spurt of activity. Collective farms held three-tourths of the
arable land in April 1956 (foe TeX* 11.4). State farms *Amount for a relatively
small part of Bulgaria's land.
Table 11-4
Socialization or Agrieulture in Bulgaria
1949-56
/ear
las of December)
Collective Farms
State Yarns
Total
Socialized
Sector
Number
Percent or
Arabi* LIM
Number
Percent of
Arable Land
Percent of
fixable Lied
1949
1,608
12.9
91
1.9
14.8
1950
2,608
48.8
)1
2.1
50.9
1951
2,740
57.2
N.A.
2.3
59.5
1952
2,477427
57.2
108
3.7
60.9
1953
2
58.6
loo
4.0
62.6
1955
2,730
61.0
ma
4.0 ti
65.0
1956 .1./
3,074
75.0
N.A.
4.0 12/
79.0
a. April 1956.
b. Assumed to be the same peroentage as reported previously.
3. Foreign Trade.
Significant changes have taken place sine, the war in the
direction and composition of Bulgaria's foreign trade. Before World War II,
Bulgaria's foreign trade was conducted principally with countries now outside
the Soviet Bloc, and Germany was its most important trading partner. By 1946
the situation had changed greatly. Tired, with other countries of the Bloc
accounted for about 90 percent of the total, and trade with the usat alone made
SECRET
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up 75 percent of BUlgaria's turnover. The USSR has continued an Bulgaria's
chief supplier and customer, but its relative importance has declined as
Bulgarian trade with other Bloc countries has expanded. In 1955, other
Satellites accounted for about 33 percent of Bulgaria's total foreign
trade turnover (see Table B..5).
5Ablo B-5
Geographic Distribution of the Foreign Trade Turnover of Bulgaria
1943,
1952, and 1954-55
Percent
of
Total
121..e.
1952
1224
1222
Sino-Soviet Bloc
77.
3).7
37.0
37.5
USSR
55.3
57.1
14.3
46.3
EUropean
22.4
30.5
39.3
33.2
Albania
0.1
0.5
0.5
0.7
Czechoslovakia
11.3
12.6
11.9
11.6
East Germany
3.3
6.3
13.4
13.0
EullOrY
1.3
3.6
4,1
4.3
Poland
5.4
5.3
5.0
4.0
Rumania
1.0
1.6
3.6
4.6
China
N.A.
0.7
1...1
2.1
Other Bloc Countries
Negligible
0.4
la
0.9
Other Countries
22.3
11.3
13.0
12.5
Of which: Austria
4.7;
4.3
3.3
2.5
United Kingdom
1.2
1.9
2.5
1.6
West Germany
N.A.
2,2
111
2.;
Total
100.0
100.0
100.0
100.0
Bulgaria's trade outside the Bloc is principally with the
industrialized countries of Western EUrope. Since 1954, Bulgaria has made
a special effort to increase trade with the West. Trade agreements were
concluded in 1955 with many of Bulgaria's prewar trading partners and (in
accordance with the recent trade policy of the Bloc) with a number of
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tiPLUII
underdeveloped cutr
Tha eozi
tion of Bulgaria 63
changed, coneU.rsbly in the postwaryears . o p
development? .1:Polgula nnebIylnoreased Its
In 1949
8004, 1ntim4e4 for the In4ustriallza14on and elec
and for
orT
Cl
and
By 1951 proportion had incraased to 45 percent. These
by
in the
P
petroleum products, chemicals, and rubber
materiel,a. flie USSR wee Me prizaxy
industrial, raw materials enema.
the tr, but e arts of re.thinery? equi
gained a tore p
r t1nby
riod.
c14nery and equipment.
1 ;tattoo proz& the variety or 80042
over
of total expo
.r
ion in the exportsr of recent years (see Table B-6).
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OEhlit I
Imports
Table B-6
portsof Bulgaria by product
1948, 1952, Ana 1954-55
Percent of Total
1952.
1954
Food, dri4y and a
9.5
1.6
1.5
Raw materials and fuels
20.8
22.3
17.6
Senimanufactured and chemical products
33-0
26.7
30.3
itachinery and transport equipme.nt
25.6
39.6
39.3
Other manufactures
13.1
.8
11.3
Total.
100.0
300.0
100.0
tO
Bay materiels and fuels
Sealmanufactured and chemical
Machinery and transport equipment
Other manufactures
Total
on et
lometers of freigh
tion
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as
ased about 113.5 per
1955. Railroad freight traffic increased
traffic about 150
(but:
beim the
grew br about 150 percent.
generally attained
Le
2.2a
4.4
17.2
27.4
40.6
o
100.0
19I8 to
130 percent and highway
Ocean hipping increased about 225 percent
freight traffic
ion
1) and
nye Tear nen were
for industrial facilities. 1-
As to
SECRET
onstpzetion
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onstpzetion
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activity in this sector. During the-
construction. in
oiia pian.
the
?ve. Year Plan, the volume of
1.re econor Is to be twice as large 8 uther the
e first three yeare of current Plan, 1953-551
re underfulfilled, mainlybeeaue of bad planning
izaton at the -construction sites.
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III. Czechoslovakia.
A. General Policy and Aehtevements.
The general atm of Comimmtat economic policy has been to reorganize
the structure of the Ozechoslovak econozy,in respect both td, its output
and its institutions. The p
output were more extensive for
as in the,level and. ctcposition Of
than for agrlcuiture. The industrial
conversion entailed, in addition to atiorc&1 ization, a very rapid expansion
avy industry, parti
dation of the growth of 1
the machine-buildingindustry, and rater-
4 been significant in the
prewar period. Chief among these were the textile, leather, and. glass
industries, once important In. Czech
the West. Economic policy vas slightly mo
extensive:.
t with
the end of the Five
Year ken period In 1953. As a result, the output of cower goods grew
more raptdly than producer goods rig the following two years,. although
producer goods continued to predominate. in total industrial output. Greater
.attention vas likewise- paid. to agriculture, but there has been no significant
Increase in output since. 1953. The, eihaeIn on livestock and. fodder crop
production, which was introduced in 1949, has been continued.
on
Industry is mainly responsible for the estimated
growth in gross national product of 65 percent from 1948 to 1955 (see
Table C-1). Thduetrtal output
or
sed about 77 percent, whereas agricul-
tural outPut grew only 28 percent over this period. The rate of growth of
industry averaged 8.5 percent during the period and reached a peek of
er
12 percent in 1952. Increases in electric power generation and. production
,1),z.11ET
5
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Table C-1
Indexes of Estimated Gross National Product and Production by Economic Sector in Czechoslovakia
1938 and 1948-55
1948 = j(
193812Lia
1949
2.22
1951
1952
222.
22a
1955
Gross national product
109
100
107
118
124
136
146
153
165
industry
100
100
106
118
124
139
154
162
177
Agriculture and forestry
147
100
110
120
u8
327
325
in
128
Construction
105
100
112
148
170
198
228
242
250
Transportation and. communications
73
loo
114
126
142
151
162
3.71
179
coo
Trade and services
109
1.00
104
110
116
121
128
143
153
rrip
=CP
PPIII
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SECRET
the engineering industries were especially large. The interim 'new
course " plans of 1954-55 provided, for continued expansion of industry
though
a
rate than trev
)$
in the growth of producer goods and. consumer goods
seive disproportion
bee'.
The output pattern of the machine-building industry was broadened to
Include durable con
.1955.
ds and capital equipment for such consumer
s planned.
s manifest in Czechoslovakia's trade negotiations daring
tries as food processing and. textile- annufactur "
wan haluieled into
3949-53 periodt a large
e natiOnal income.
or expansion of the industrial
sector. At the start of the plan, about one'fifth of the national income
was allocated to invegtmentt rising to about. one-fourth after 1950.41nvest-
ment Is estimated
as it is admitted
2-2
officially that eoneuution ziereased by only 25 percent.,1 As planned,
the major portion of the increase,in consumption represented growing
government expenditures for social welfare. 8oflgains appear to havebeen
oade in personal consumption since 195I, although
workers probably did not exceed prover :els until 1956. When the poor-
living donations of other groups of the population along with the ackauw
ledged general detinieneios in hous rg and the of consumer goods
are cone4ered,. it is doubtful that prewar standards
by the Czechoslovak population in 1955.
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SECRET
B. Use of Resources to Promote Economic tieveloprPn .
1. Manpower.
osiovakia's amb
oue goals for indu
ered he ttainaent of Czech-
agriculture. Even prior to.
the war, the, country bad no significant reserves of manpower. The labor
million Germans.
force was seriously reduced. by the expulsio
just r the war, causing a severe strain on the economy after the /first
Viva Year Plan was . In the cosptition for workers, industry
always received the highestpriority. Consequently, there was a continuous
of la
agriculture to industry during the plan taut
effects on agricultural
By--the end of 3.953i, the agricultural *bor force co zed
olu.?-M4'fic(
of the total labor force, c5pared. to ?forrestrrt in 1948. This.
6.1te
haw- reflected a decline of/1 percent. In the nuMber of agricultural.
year period. Meanwhile, the no
force grew by about one., .(see Tab
jbor force was augmen
al labor
industrial
icultural vorkers, youths,
women, and the aged, shortages of labor were nevertheless encountered in
Since
.c on of labor. New
such key mining and netail,
19541 there has been a better balance in
workers have
in industry. In order to improvethe tight labor stply,he governaent
planned demobilization of 3I,000 men in 1955 and an additional 10,000 in 1956.1/
ted to agriculture,, as well as to critical sectors
SEE
(.;
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14-
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61.61qa2ed
Population and Labor Force in ezechoslova}da.
1948 and 195 3.'.5
C-2
1 1 3
Thousands ai
Population
12,1200
12,950
13,090
Civilian labor force
5,890
6,330
6,500
60600
Agricultural
1,940
1,580
1,530
1,600
Nonagricultural
3,950
4,750
4,970
5,000
a. Averages of estimateso the be
2.
During the Five Tear Plan, Czechoslo
* high level of
of national income in some yea
and since the plan is shown in
ted acre
rend in inves
following tab
ent as
t of
income
year.
maintained
one-fourth
ment during
Inda of
Investment
?(1948 100)
1948
lec
100
1949
20
115
1950
26
162
1951
26
120
1952
24
195
1553
3
195
21F.
1954
22
195
Under the original version
capital investments were to be concent
and public works, Agriculture and tra
the First ? ve Tear Plan
n industry, transportation,
on the other band, were to
rective the smallest allocations, as indicated in the fo
of planned investment expenditures; il
M,IFFT
owing break
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SECRET Planned Pereentage
Mare of
Capital Investment,
1949.53
Industry
39.2
Transportation
15.T
Public works (reads, bridges, dams, etc.)
14.o
Housing
11.7
Social and eultuntl i'aciU ties
8.5
Agriculture
8.o
Trade and building trades
2.9
Total
951, investment goals were increased. 'by one-
VOS
ccouuted f
one*
.4
ed
-7'
Five Tear Plan.,4 Total i/ivestment fell an estirnated. 15
r
lased goal hzareveryi Ole neglected
received. greater shares of in
plans of 1954-55. Becense cveraU
100
and a greater pro--
in
tordiney, the indus
eBbnt ins the
of agriculture trade, and housing
the new ourse
s held at the 1953 levels
in each of these years, industry and transportation undoubtedly received co s-
tinclingly man
.shares than previously, but contixnied to accountf.
the major pert of total
C. Phases
?
in Czechoslovakia fell into three
distinct periods: ) the reconstrue iod (1944+,-103), (2) intensive
periods, the
9-53) and (3) eonsolidation (1954-55).
attentim has
the
cern of ecumenic
to other sectors aine 195.
atiti
.?)
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?
sEcn?.i
1. Reconstruction, 1947-48.
The Czechoslovak plan of reconstruction covered only the
two years 1947-48 because the Country had emerged from the war with a strong
industry which vas only partly damaged and disorganized. Industrial production
was claimed to have increased 10 perce4contrary to the indexes of estimated
output given in Table C-1), but
a national product was probably smaller
than in 1938 because of the low level of agricultural production. Substantial
gains were registeredin coa
and electricity, though the planned
rehabilitation of industries 81xtTering from capital depletion, particularly
coal, and steel, was not achieved, Neither were investment goals in housing
construction attained. A serious decline occurred in agriculture due to the
1947 drought, 'which, together with a reduetion in livestock, adversely affected
the food supply. With some 65 percent of industry nationalized and subject to
central planning, the reconstruction period
as a proving ground for
planning methods applied more comprehensively in rase-vent plans.
2. Intensive Industrialization, 1949-53.
Soon after the Communists seized control of the governmcnt in 1948,
they drafted a Five Year P (1949-53) which stressed development of heavy
Industry over light industry and provided for the industrialization of Slovakia,
where a significant segment of the country's armament industry 14 now situated..
Besides supplying some 65 percent of the total Satellite output of
armaments, the country has developed many new lines of capital
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goods necessary necessary for the industrialization programs of uther
Satellites. Further sizable increases were also achieved in the
outpt of electric power, coal, and steel. The goals for coal and
A
iron ore were not entirely fulfilled)however, and production
constantly lagged behind the demands of industrial consumers. It
was these disproportionate rates of growth of various branches of
industry Which the interim plans of 1954 and 1955 sought to remedy.
3. Consolidation, 1954755.
Along with other members of the Soviet Bloc, Czechoslovakia
adopted a "new course" in late 1953 which was referred to as a
policy of "proportionate growth." Under this policy, the rate of
industrial expansion was moderated in order to allow time for the
correction of iMbalances that had developed under the forced
industrialization of the Five Year Plan. These imbalances arose
from an over-emphasis on industrial development at the expense of
consumer goods production and a lag in the output of coal, power,
and basic metals within heavy industry. An effort was also made
to improve the distribution system for consumer goods. In
agriculture, increased investment funds were allocated to both the
private and collectivized sectors, and collectivization, though
still a long-run goa1A4 was put on a more voluntary basis. By
means of these moves, the government hoped to put the economy on
a firm:basis for the launching of the Second Five Year Plan
in 1956.
SECO
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Survey- of Major Sectors of the Economy.
1. rye
a. Principal Developmen
Czeehoelovakia made impressive strides in industial
production during the Five Year. Plan, but the rates of growth were
extremely uneven
example, product
percent
increase in the output of the engineering industries.' These industries
baste ma
1948 to 1953 e
a branches of industry. For
al creased an estimated 42
d to an estimated 70 percent
manufacture, a, vide range of products
trmsporlation equiloent,
construgtion and agricultural machinery, heavy elee rical equipinent,
and equiirent for the chemical, oil, textile, and sugar refining
industries. Armaments production increase& greatly during the plan.
Shorte
the fulfillaent of the goals for
coal, iron, and steel were largely responsible for the comparatively
slay rate of growth of output in the basic materials Oategcry during
the Yirat Five ear Plan. Production goals for coal, iron, and
steel wrre not attained because inarieWate inveaent and chronic
Shortages of experienced labor. i)eficieneies in the outpix.f basic
materials adversely affected the engineering industry. Moreover,
since the mines and f
by the, engineering indust
ed on captial equipment produced
engineering production
contributed to the inadeqjate output of basic matertals. Output of
basic materials has tended to correspond better to industrial requirements
since 1954.
SEeti
hi
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OtbriE I
in 1953
goals still ba not bee
vas still
the goals set for 1953.
b. Analysis
Most of
sea
goals for bets
fulfilled (see Table 34 and in
outputi
stances tnse
by 1955. Ilardoa1 production in 1955
e 45 Dereut, anderude tee1 4 percent belay
notes howeer, that- the 1955
theirgoa1, iMicattng the adoption of more realistic plans for basic
these products represented
nt o overfuIfl.
aach1nery and e
portion
54
5
dur.
Ytt'St 11eYear PlanreaiLe& a ceeo
1 labor force. During
in the
and footwear
a,. -
glassware
In recent
gr
.0
in
t Oring industry
its plana, as .d
Lea axuivaL rates of
?of the
In the
104- the pro-,
king
28 percent to 21 peree
of the mast the
ing? Beta of the
/4
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SECRET
limited pro ets for
relied more On
lel
force,
in labor pxvduetivlty than on added manpower to
A cording to official. reporte, 75-80 percent of
ug e 1951-55 pertod r eulted frOm inereasee in
Table C-3
and. Acia1 Output of Selected Produets
in -Czechoslovakia
1953 and 1955
Or .1.211
Hard coal
20.8
25.0
BrOVII coal
32.2
35.8
Coke
Core
8.o
8.0
IrOn 014e
1.4
3.8
Pig iron
2.7
3,0
Crude steel.
3.5
4.7
Crude oil . 0.24 0.31
Electric power 11.2 12.3
(billion kWh)
20.3 224
34.3.
7.7
8.6W
96
96
1.8
2.1
47
2.5
3.0
83
4.4
4.5
94
0.12
0.33
39
12,5
15.0
102
was the main ree.tptent of
investment funds during the Piret Five Year P
received
of the ea
iculture.
uction Trends.
Agrieul
Satellites fell far behind the p
in Czechos
baa
In the other
goals of t ive Year D1cn, Cross
aka*
if
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agri
SECRET
tural production increased only 14 percent over the? plan period
compared to a planned goal of 53. percent. A drought in 1954 helaprodu,-
tion at the 1953 level. In .1955, however, it was claimed that gross
output in=tessed to about the prewar level.
Output of foods...iff a and fodder crops baa nt. .. ea much
more rapidly than. industrial crops; the greatest gains were in moat,
animal fatsmilk, barley, and oats. ProductIon of potatoes, a basic
prewar levels in 1955, however.
The expansion which ken place in agricxtlturai production reflects
mainly rnmental efforts to promote livestock production.
Avail bi es.
ood for the po ulat
was s
The per capita calorie
has
of food in Czechoslovakia
ed fairly stable at about the pre'
level of feta&
lavaand. therefore has been ganmeally ad4eate.
been possible, however, without the
population losses and a Alight shift to the lower uaUty foods during ti
postwar ears. The stagoation in agricultural output therefore was no
fully reflected in the per capita caborie intake of food. Temporary
hortaggs (for example) of potatoes, meat, and grain in the 1954/55 food
Co
bl
constsgption.
ability
e.d s
1955/56 was
downward effect, however. Pood. a
t higher again and is ,estimated to have
erage. This Immovement was
harvest of 1955 and the continued. large imoxts ofTAk
t.anabuttew, from t.
except/071101y
10
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C.
larger in Czee
SECRET
Socialization.
The socialized sector of agriculture has been re
ovakta than. in .mos
11
Satellites, although it has
raced more than k5 percent of total agricature.1 land. The
socialized sector, baanix -
gains of fcr cad
reduced as a resat of the
to one-f ?
nt of
the to
sector as a Whole isould have been eveneater
Lth comprise the greater
harply in 'Czecbosiova
lag 1951 and 1952 ie
banded
t of the
$ for the rapid
considerably'
licy adopted after e death
953 June 1955,
ral lend held by them from a
Tab C4).A roe decline lara
handed collectives, bad no
bodies SUCh AB 11321.18trieep Bet1003-81 rectories
by state ramsba inc
.enrnited to about
renthe regiia has
zed
and. other public
the army. The area held
gra4.-is sincemLd.l953 andla early 1956
percentof the covntres
to aake s
collectives have' been formed
In .actor
h ?
attempt to give the agricultural s
9
titer
n a
Since June 1955
4
new
investeent
investment outlays for mOst sectors of the economy were
held. at avproxtsatekir
culture reportedly do
1953 le
4 This
el in 1.954-
1955,
-simian% pattern
nt
agri-
1955.
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Table C-
Socialization of Agriculture _V in Czechoslovakia
1950-55
tea
ed Sector
(percent of lend)
Dec 1950
3,743
15.1
Deceaber 1951
4,480
17. 4
December 1952
7,819
.34.8
8.2
43.0
June 1953
-8,248
364
8.2
-44.9
December 1953
7,350
N.A.
9.0 ?
June 1955
6,663
26.7
948
36.5
a. All percentages In the table refer to agricul
arable land plus perssu2ent meadows and pastures.
lana,. which consiSts of
A separate three year plan for agriculture,. ichieh called for.
new
? 'worters by 1956, waS.2adopted in 1954. 3:1
These recruits were to be prr yzth. i?
the collectives and machine
Although there Is
the shortage of
in the country.
ign
xn
would 'work for
t an additional 1OO,0. rkera had
at 14..000 studentS barlenrolled in
-eerning the.
tare., 1955
sees:
st ? ?
n treat
ho
te
schools.
of these
success for
lees,
OrOe
ins a persistent economic problem
- regime have resulted in SubsteniSi. changes in the composition and direction
of Czechoslov
e. Prior to World War tit Czec lo 's
Sat/
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SECRET
trade N1186 conducted pr1ncipall3r v.Ith countrtes now outside the Bloc.
Germany (including Bast Germany and
now under Polish
administration) was the country' a mostimportant trading. partner, but the
USSRhez asstm, that role in post
reoriented fra WesternEurope.
trial ray s and foodatuffs.
*aorta
they did in the
ye
ac
trade increasingly
a- Soviet B
In e co s chief
expts, bit producer goods (eapeciaU producer 's equipment
positionthe
Is c
$jno-Soviet Bloc
78 percent in 1953 but det
troduel ion of the new course." The USSR's share
-rcent of total trade
continued at
high level as in X9
vort ca
trade witi
th the
Czechoslovak
1953,
Soviet trade has accounted for about one-bait Csedhoslavattft a trade
?
with the.
Let
er one-third of total um.de t
though reduced to only 22
countries was nevertheless of
n a
reel
I/
unerdeveloped cow:Aria
East.
1,
e of nOn
t of Czechoslovakia's
lans/i trade with non..Bio
the econo
Europe.
es parti,c
has been one of the most active Sate
SECRET
1953,
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with East Germany and Poland, in the Soviet Bloc's econcc penetration
of these areas. Ito expendi
been the largest of a
Bloc openalrg f
trade atrs in these areas have
e country, accounting d of total
of land.
eerneu
to.
t $18 mi with Syria $7 -Oa;
increased..
-r such ?PurPoses in 1955 As a leading ?
moments to non-Blot nat.'
in 1955 with Egt valued.
end w.th. Afghanistan,
omplete industrial uxi
and.
XiLtin. America?
Cze hoslovakia
dit
concluded.;
extended e
Tablecc
C-5
iped c
sb.oe XU$ sugar,
of the idiehtle East, Asia,
Geographic Ns Um of the Foreign Trade iliurnovrfr of Czechoslovakia
19$6-38, 1948, 1950, and I953465
Average
1936138 1948_ 1950
?-
ion
Of whichsUSSR
120
33.
455
237
775
416
Other
572
1,050
6
Total
692
1,505.
1,417
Sin-So.tet Sloe
'7
30
55
Of which:. VSSE. ?
2
-16
29
Other
662
.0
78
35
22.
100 100
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,
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3.,667
807 900
568 745
2,235 2,570
75 71
36 35
100
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SEFT
?
the Soviet B1
goodsporte
engineering produc
in Czechoslava a
leather, and
?
and equipment, primarily to members of
e more than compensated for the decline in consumer
be
of the First Pive Tear Plan. Machine
plant equipment, motor vehiclesother
semifiniehed metal products
tile foo -
about 10 percent of total
of the country a harcurrency
ts for
S
earnin Czeohoslovakia also e
and coal-tar derivattves.
Czechoslovakia .s ra ateria1 requirements are largely sett d.
throt2gh imports. In 1955 the U ied 80 percent of the iron ore,
LC
capital good
ge
70 percent of the
cent of the .phopbate 2iicbCseebo
are imported from bzsa
of Czechoslovakia s in
d Austria, and
i.e rubber, and
Petroleum products
from Po-
the.
and.
try has
become a net importer teed of a net exporter of coal. paw cottOn, wool,
hides, and crude rubber are
uranium ore*, Czechoslovakia exports
make at
In substantial quantities.
stood pulp, and
It does, however,.
mate
shed steel to other countries
Loc.. In 1955, exports of\ finiahed steel ,products to western countries
re increased due to a reduction of Soviet reqniremente for these
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Other Hectors.
Goals for the expansion of the transportation and co'mie
tions systems during the first Five Plan were generally attainol
and paralleled the expansion which took place in 1ndustz. This Ilea
achieved in the case of the raIlroads, whiob earxieti 87 percent of the
tal freight in 19550 by intensive uti
expanding the railroad network in the
of rolling stock ar4 by
ope eastern part of
to the
the country. A second track of the Friendship Line
USSR border- at ,Cierna, for example, was completed in November 19550 ftretbe
increasing the ortnee of this Ill* In trade-with
have been hampered ty coal. Shortages from tifle to tioe in the past.
Because they are the greatest single .nsumer of coal, the government
plans to extend. electrification of the:railroads, thereby curtailing their
Iciency. Highway trsnsprt
955 accounted only for abont 3 percent of the freight hauled.
Construction activity is claimed to ha
rig the First Five leer Plan and 10 percert beyond that during the
Xkc
130 percent
following two. year 71 Despite t
tore of the e
even in 1954 and 19550 when spec
ction goals were not
lug were not attained
to such construction
.??21
in the paans.,4 The consistoutLy poor showing of the building industry was
to shortages of qualified workers, worker absenteeism, failure to intro-
duce modern construction meth and t
.one time.
SECRET
of too many projects at
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? A Cat bin
IV. East Germany.
A. General Policy and Achievements.
1. Introduction.
East Germany's two principal economic aims during the period
of its First Five Year Plan (1951-55) sere to xtend greatly the social-
ize& sector in both agriculture and industry and to raise industrial
production to a level well
of 1950. After a rapid start in
1952 and the first ha of 1953, agricultural collectivization efforts were
relaxed somewhat with the advent of the riew course". The proportion of
total agricultural land in the socialist sector continued at about 30 per-
cent during the last two pare of the plan, although some additional
collectives were formed from abandoned farm 1
nisterecl by local
governmental units. The share of the socialist sector in gross industrial
production increased only from 76 percent in 1950 to 85 percent in 1955, 1/
leaving a much larger private sector in izdus try than Is found in the
other Satellites,
.The five year goal for gross industrial production was officially
claimed to have been fulfilled with an increase of about 90 percent from:
1950 to 1955. Independent estimates based on .0 ction data for a
sample of products suggest that the growth in net industrial production
(which excludes the double-counting
of gross production) w
somewhat smaller than that. The announced Increase of 44 percent in gross
agricultural production during the period gi is contradicted by a large
amount of detailed information, which suggests an increase of perhaps
iJil
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Ntlattil
9 percent
st
y no more than 20 percent. The combined,
effect of the grosrth of output in industry, agritulture, and other parts
of the economy was claimed to be a 62 percent increase in rntioa1 in-
come. 3/
East Ge.rmany's eeonxtic
more stabler thee those of most of the
sion of
in several of the other countries and invert merely took into account
the difference- between anticipated aad actual output of certain. products
t German plan, in 19511 waw.
y were?
.e firt reVi-
tali:Pared with the changes
in 1950) the base year of tbe plan.
"new " program Was marked
? by changes of varying degree in several. aSPea
953 and 1954, but there
Objectives for 1955.
the eff
ofeastLres
ttle or no e
was
the. socialize; on of nricu1ture and
ational lams
up.
vided for improvements in living standards, and changed the allocation
of resources to some ,
raw materiale for industry, and consumer
a
cultural
1
ures
were regarded merely as correctives for growing inbalrintes among the
different parte of the. economy. Other
those aimed at improving
vation and never were
2. Gr
changes, particularly
were partly po1itcal in ma
out to the fil extent sed:,
e oneMY.
Even though a significant portion. of East German indus
es,
culture, end. trade remained in private hands during the plan, the adopt
Sall'
4/.6-
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of Soviet tee iques of econ
extensive rower to
planning and administratLon gave the regime
area's economic development, This power wee
used to prceote high rates of ec0iOnLc growth bile bolding down personal
consumption and (during the first years of the plan) rmting the required repar
ations deliveries to
. The eeonow yes still operating at a compare-
tively depressed level in 1950, and
was
able scope for
more complete and efficient utilization of productive facUlties and the
labor supply. =Vett.e advantage was taken of these opportin1tiea to raise
jcvi..ccivei;
the total output of goods and services,oronal'OUtrW4,--c
Paced by the expansion of industry, the gross national product
increased by an estimated 60 percent from the low level of 1950 (see
Table D-1). The Increase, averaging about 10 percent per year, made
ee
ne of the most ropid3 growing in the Soviet Bloc and
in Europe generally. The
of growth fell during most years of
the period,. however, as easy apportu ties for exploiting unused or
/ndexes of Estimated. Gross attona1 Product and Productlgn
by Economic Sector in East Germany
1938 and 1950-55
1950
"z 100
1,23?.
19
3.952
3,4211
1951:1,,
1955,
Gross national. product
149
100
116
129
139
151
160
industry
137
100
120
137
152
169
184
Agriculture a'
130
100
107
106
108
107
109
Construction
204
100
122
152
163
186
3.98
Transportation and
communications
123
100
110
112
125
132
1.38
Trade and services
170
100
112
124
134
1144
150
as, ,r,t, ? -a-tette te,aitz t(er /t1A.-e 14;
s &Jzett-(... /date?/ ,/,.o-19 /e2',5 )
`itva Aft, 8 (ice/ is4-6 e-7; 'to
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Lb
utilized. resources gradually disappeared.
the gross rational
product was only slightly higher than lu 1938, leaving East Germany
behind
respect.
tea and most vestern Earopean counties in this
. thaws iu:ilu and ,DistributioofOut.
Significant changes took place both in the origin and in the
enof the gross national product dur tug theFive Year Plan. The prefer-
entlal development accorded industry resulted in its originating almost.
me-balf of total:output in 3.955 aiarger share than ever before. The
is estimated to
share of agriculture In
output, on
have declined frari 3.6 percent in 1950 to only 11 percent in 1955,600
The principal principal factor affecting the distribution of the national
product probably was
Ge
drains on its output for the
of
one obligations
other
et takings of all
kinds took perhaps .one-sizth of total output. in 1950. IV The scaling down
of reparations leviesn the early years of the plan and the tetnat on
Of such obligations at the end. of 1953 together with a reduction in
payments for the support
let occupation forces after 1953, are.
estimated to have reduced his ratio by about ore-half by 1955. Increases
in - i. consumption during the first three years of the p
bly
were quite'sU, considering the continuing, high level of Soviet takings
and the substantial increases in investment expenditures. In 1954 and
19551 however, East German consumers benefited from e substantial gains
SEIRET
ilh
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, Er
in consumption OS inestmeut leveled off and the econczttc burden of the
Soviet occupation was reduced.
Consumption of food during- the First Five rear Plan was eon
sistently below prewar consumption, varying from
of the average calorie intake during the period
Table 5). ithougb the of food. imports I
large, imports have not been
t 75 to 90 percent
:935-38 (see APPe
vel
offset the low level of domestic
production. Before the war' this area ranked
among the present-day. tell. tee, but its per capitaone intake is.
now one of the lowest in
has been main
t or above- the prewar 1
reduction in the quality Gavel]. as the quanti
grains of all kinds
food e
ing a
by
population.the Meat, fats, and auger were rationed throughout the period
but the balance between starchyfoods and animal products, has 1mpraved
somewhat in recent years.
D. Survexsof14191*.Dettors or theiSconoMY.
. Industry.
a. Production rends.
Industry grew much more t: most other sectors of the
'economy dUring the First Five Year Plan (see Table D-1). The increase in
net industrial product onA eptimat at 84 percent, compared with a planned.
increase in gross industrial production of 90 percent (later revised to
92 percent) and the offlciaUy announ
an increase
? SaltElr
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the goal with
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lat.Gia
an increase of 90 percent According to the regime, this accavlishment
raised i
estimates
about one
production to more than twice the 1936 level, .?if but
am sample commodity data Indicate an Increase Of only
d over 1938,
now c.bairas to be/franking
r 1301 y 60
1936. East Germany
nd.ust al producer among the European
Satellites and the fifth lazgest in Europe, f
Kingdom, Prance, and West GentArly.
v
the United
In spite of the mediocre resource base large gains were
made in the tput of most ivortant raw meter als. ow coal production
increased by 45 percent (to 200 millIon
ea) grew- to a similar
generation (based primarily on
extent. Producti
.1950 level, but not without increasing
ch
the nonferrous metals, copper and slur mi production increased materially,
but production in 1955 was only slightly higher than: in 1950. In
teed was rai
hal
f requi
more than *
Is
the
iti 1955 Mang
the case of chemieale -- an East German specialty -which provides about
one'sirth of exports1.3/-- output rose by
'Suction of bricks and cement alco increased substanti
Official East German statistics / indicate that the goal for industrial
production for the entire five years of the plan period was fulfilled by
104.4 percent. Itte more usual *arisen, between output in the year pre-
ceding the plan and output in the final year of the plan, indicates an
increase of e9 .6 percent and, consetpaently slight underfulfillment of both
the original goal and the revised. goal for 1955.
f/J,1
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4EPVT
machinery
Generalizations concerning the trend in the output of
suth Items
and the lack of. iutorrnatiori about many of them. Production of passenger
-
equipment are difficult because of the
aa.c..tolco44:64
seal!, mainline freight
tWice the 1,950 level in 1955, and truck
t ion increased
Tractor output, on the other hand, grew much more Slowl
throughout the peri
in the output of some. -consumerher than fdetuffs
achieved.
re
Unlike most of the Satelll log-tent plans,
Lid
re.
uction
ge gains
*
divergent goals for heavy industry
and light industry. The increases planned and officially' repo
have been achievedse
about 10 percent
relationship is perhaps ezplained b.
teg:es fr
eering industries
plan andthe .
a
hi
1950 to 1955 Were vithin
Tact that
veloped at
One
of the
indicatedgrowth for light
industry probably has an upward bias because of
. easing statistical
coverage, of food processing exabandicraft output in the course of the p
creaeee in gross rial
en it net industra1 te-
Of
production and calcations
ial reports of
of arne
tion from available eaaizodity statistics suggest that the growth of
industrial: production in East Germany was more regular than that of most
61iff
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y;,It
of the other Satellites. In particular, East Germany apparently avoided
the conspicuous slaclrening in the rate of industrial growth which occurred
in Czechoslovakia and Hungary in 1954.
b. Planperwer? Investment, and ProductiviV.
A vital factor in East Germany's industrial performance
during the plan was the enlargement of the industrial labor force by some
600,000 workers, or over one-fourth. This was accomplished in the face of
a decline in population of nearly one-half million persons and a nonagricul-
tural labor force which inereased very little (see Table D-2). Through a
combination of incentives and pressures, employment of women was increased
by about 650,000 during the period. 2/ Numerous persons were induced to
leave agriculture for industrial employment, but not without unfortunate
effects on the availability of foodstuffs. Transfers of labor to industry
from agriculture and the less essential nonagricultural employments became
progressively more difficult, however. The problem was aggravated greatly
by the movement of East Germans to the Vest, which reached a peak of over
300,000 in 1953. 29/ Net migration from East Germany apparently approximated
one million persons during the five year period. In 1955, the industrial
labor force grew by only 5,000 workers.
Table D-2
Estimated Population and Labor Force in East Germany
1950-55
Millions a/
Population
1222
18.40
125*
122
18.-33
1953
154
1222,
3.7.94
18.35
'&18
18.06
Civilian labor force
8.50
4,30
8.10
7.90
8.10
8.24
Agricultural
1.98
1.86
1.74
1.63
1.62
1.67
Non agricultural
6.52
6.44
6.36
6.27
6.48
6.57
Of which: Industrial 1.1/
2.15
2.40
2.57
2.64
2.76
2.77
a. Averages of estimates for the beginning and end of the year except for
Industrial labor force data, which are annual averages.
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industry 4ui1tg the jlazi
generelly a 'whole.
increasei evi&ent3.y were realized in 1 toUoved. b7 a. alp in
54 and a return to the 1953 volt..... in 1955. / Since the plans for
by
both total investment and industrial Investment
little re thaniras,
co
1954 still a iinted to less than one-fourth of invest
1
laxrned and Estimated Actual Cross,Investment in Pied
Bast Germany during the First Five Year Plan
1951-55?
BilUon Detsehi
1950 Prices
Taneportatinn en
ccomunications
Housing
Educational, health,
cultural facilities
Other
Total
a. E"---17?. ?cueing ec
1.4
Estiamted
1.951 Actual during
Bevis ion Period
10.7
1.8
260 2.7
1.6
2.7
26.9
2.4
2.0
28.6
1.9
1.8W
3-5
0.9
1.6
20.14.
Despite the l Ling oft in
19530 it prObahly .expanded more than the total ou.
rN:flIFT
of
ande during
e s
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the,plar. The general level
in relation to total optput
eparations
Lea and other
STRET
tment however, apparently Vas lower
the other Satellites because
inga by the USSR. 25./ Moreever,
since Eazt Germany --
WS already a developed industr
country, it was
necessary in se instances only to repair, _nlarge? or modernize eziat.
ins facilities- to obtain prompt a. eubstanttal 1nrents in output.
Although labor pro hictiv.tty did not rise as rapidly
as planned, causing East
into Industry, a sizable gain in average output per worker was
the flow of labor
less achieved. Roughly two.
production is ascribable to
to the additions
trial
one h
?
In addition to rebab
faeilitieg, the regime endeavored to raise average
r through the use.
PAY systems,. training
programs, bonus plans, and sc ial security benefits, together with frequent
productivity campaigns and unceasing eXhortat
nut in labor product vity during the plan ently was.
improve-
Fluctuations in the annual ratef growth. of industrial output consequently
were due in large part to the varying nunfbern of workers added to the
labor forte each year.
2. Agric
a. roducti
Ariimlture was the ict:irnserious neglect by the
East German regime during the First Five Year Plan. lxi contrast to the
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large increase in industrial output during the period 1951-551. agricultural
output rose only an estimated 9 percent. Most of that gain moreover,
registered in the first year of the period; increases in output during the
next four years were negligible. Despite better than average weather, the
output of most major agricultural cx!x'dit1e5 in 1955 amounted to only 50
to 75 percent of the plan goals. Total agricultural production in 1955
probably was at least 10 percent below the 1935-39 average.
Crop Ie1da per hectare generally remained below the pr
war level, but the output of some minor crops such as oilseeds
hemp was raised above the prewar level, by expanding their cultivated area.
Amoral
change in the pattern of agricultural output vas the
greater emphasis on livestock. Whereas the average output of grains,
potatoes, and sugar beets during theperiod. 1951-55 was substantia
over than before the war, average inventories of cattle nd hogs were
appreciably higher. The output of meat, milk and animalfate did not
correspondingly high level, 'but. the output at such products has
increased
adnal ly and
nearly approximates the prewar .achieve-
aent than is the case with grain or root croos.
The stagnation of Bast
suit of the re imes stress
vise the land rapi
Y.
iculture is the direct re-
al expansion and its efforts. to collecti-
led to shortages of agricultur.
machinery and ertilizer; serious loss of manpower to industry and, to the
Vest; and reduced incentives for farmers because of inadequate supplies of
consumer goods in
as, onerous
farming- operations, pressure for collectivizati
regulations concerning
state procurement
S+1
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f a large part of their output at controUed low prices. The effect of
these policies OU agricultural output has been such
Germany
requires a sizable net import balance in foodstuffs to maintain the present
depress
umption, iihereas the higher cnsumpt1on level of the
prewar period was a,cc hed with balanced trade in foodstuffs.
b.
ia:Lizst
The drive to socialize -
East Germany than in the other. Satellites. Concerted efforts- to form
agricul.tural c011ectives vere first made b
mid-1953 about 5,
persons had been
? later in.
gime in 1952, and by
ves with a amnbershp of nearly 1500000
of these vere
during the second, 1953 (after the announcement of the aurae"),
reducing the proportion of otal agricultural is
about 12i percent to 11 percent. Abandoned, land
units of government apparently accounted for aba
agricultural area at this time, or
ed for an
? of about 30 iereeut
Over 500 eta
fei
(see abie D-104
area t
en the
by coIlettiv.ts from
tered. by local
cent of the total
by collectives.
IntikIng a total
sector
cialist sector increased very little
duringthe remaining two years of the plAn. Approximately 1,000 collec-
tiveswere
? however, and
or the land he)d. by the 1.
ion of
advanced
(which most nearly resemble Soviet ti es) was I
third to tbreef
f the t
B of Type III
anoirt one-
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Table D-1!,
Socialization of Agriculture 2/ in Ea-A Germany ly
1951-55
A1
Collective* /744,,,14,,
Local Agricultural
Total Socialized
Membership Area
Enterprises 12/
State Farms
Sector
Nudber
(Thousands)
lEercent of Land
(Percent of Land)
(Percent of Land)
(Percent of Land)
31 December 1951
Negligible
Negligible
Negligible
Negligible
0 14 2./
4
31 December 1952
10815
31.2
2.5_
MAL.
4 2/
MAC
30 June 1953
5,074
146.9
12.5
N.A.
4 2/
N.A.
31 December 1953
4,691
133.8
11.2
14
4
29
31 December 1954
5,120 .
158.4
14.6
N.A.
4 2/
LA.
15 November 1'
. 6,047
196.9
20.0
6 2/
4 2/
30
C/)
rsi-a
:X0
a. All percentages in the table refer to agricultural landphiCh consists of arable land plus permanent meadows end pastures. rri
mos.!
b. Abandoned farms and other community lands administered by local units of government.
c. Land held by educational and other institutions (amounting to About one percent of total agricultural land) is excluded to make the
percentage comparable with those for 1953 and 1955.
d. Assumed to be the same percentage as reported previously.
e. 15 December 1955.
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C.
The preference which industrial development received under
the First Five Year Plan cexasiderarLy restricted the amount of investment
tunas. eM labor allocated agriculture. The share of total
fixed capital planned for ture during the five. year pe.
6 percent, or much less thnn the estimated. Share of .aiculttx
ut
in the gross atiarml product.. Actual agricultural invesimit was. especially
trodction of the t1ne
tment during the last
agri
e"
953. The
-o. the ?plan wee
of -
acximately .double that of the first two, and the sn1 goal of the plan
evidently was fulfilled. 1?/
which apparently will be continued d
investment policy for agriculture,
rear Plan, has
not yet bad an. appreciable effect on agricultw..output, however.
Mechanization of Eastthough fairly
advanced by Satellite s? t increased enough to co ensate for
a.bcn d13rina the rieriod of the ulan. in
he heavy lossea of
addition: to the transfer of la
fostered by all of the Sete-
labor force was materially redi
During the cc
estimated 500
:eluded a larger than average proportion of in the
5
by
ure to: industry, vtlich was.
ast Germany's agricultural
population to Weat Germany.
e plan, the ? agricultural labor force decltned by en
one, or nearly ? fourth. More
lye age
groups and disproportionately large nuMbere of apecielista and the more
highly skilled types of labccrers. By 1955, only 20 percent of !Oast Germany's
labor force r
. culture, compared with a .ratio of 25 percent in
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SECRET
be rtext zist industrialized Satellite.
3. Other... ec
Transportation,
entirelylargely o nattpna1ie4 before the s
enterprise we stiU
culture at the end of the p
menta are still in businese
tions, finance, and foreign trade lwere
private 19
5.
The vOlume ?
e plan, but private
her than industry and agri
Many srwa t private
third of retail trade turnover
41,
at (nc1i4irjg. bldicrafts)
tion outP have approxi-
telydoUbled from. 1950. to 1955. Twilding of iM..trielplants and community.
on/ which apparently
e built
fa
es
ceived
y by about one
ft
during the plan, including the Stein MtaUurgica1 Combine nearFurstenture
Cder he Metallurgical if=
banner whieb produces
Opera
t Cal
t at lauch
grade 'coke free brown coal. The
cos at Laud:21=er were entirely sucessful at first, but the
been. Improved sufficien
ably tiafactory substitute for cake made fr. bard c
Adaltion to these examples of new construction, numerous other pl?5 were
enlarged curiflg tbe pert
volume
Freight and passenger traffic substantially in
C in
1955 exceeded the 1938 level by about 10 percent, and highway freight traffic
was several tines as great as before the var. Freight traffic on inland
1950 to 1955. iron-kil
of r
SECRET
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terways, on the other hand, was much gi,3ler than in 1938 because of
h^ reduced volume of trade between-
h now make up Bast
Germany and West Gerstany-. As in the other Satellites, facilities have
been used more and more intensively in recent years, but the deteriora-
tion of both track and equipment under the strain of heavy trstfic
probably is most as ious in East Germany.
In retail trade, too, conideeb1e progress during the plan
ic ally. The reported bling of retail trade
=parable prices) 22/ undoubtedly gives an eXaggerated impressio
of the Improvement in
this increase is due to the
increasedthe
of cons
living standitrd.s hvever. Part of
urbanization of the pou1ation, which
at goods Marketed throughgam' retail
chnnnPls. Furthermore, the offIcial figures do not adequately reflect
the detrlorstion in the quality of consumersgoads during the plan.
The foreign trade turnover of East Germany was still far below
the prewar level in 3950. The plan stressed the need for inoreased trade
and provided for nearly a tripling of the 1950 volume. This goal was
no quite reached, but ade
Increased subs
IT (See
Table D-5). The share of ba&ic raw materiaie49.n total imports fell during
Table D-5
Indexes of the Foreign Trade Turnover of East
1950-55
1 0
1222, 1951 1223 1222 .1954 1955
280,
,
255?
350
Total turnover
100
151
173
223
271
Itports
Igo
138
178
225
243
Exports
100
2o7
216
275
360
SECRET
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the period, and that of agricultural products and pr000mmememods rose.
in East
cent of
at
fifth of: 431456ttirnirt955,""
Industries became particularly important
in the course of the pJLan,. increasing from 32 per
exports in 1950 to about 60 percent in 1955 (see b r6.6)4
Table D-8
Imports and &porta of Bast Germany by Product Group gel
1950 and 1953-55
Percent
1955
Basic meter
44.6
3649
37.8
38.6
Of vhich: 1Uurgica1 products
1649
33.6
13.7
14.5
Fabricated metal-products
8.2
542
4.8
Products of 1Ight and food fm1stries
34.0
36.3
36.9
34.8
Of vhich: .Te tiles
8.4
12.6
3.3.6
14.0
Food and. stimulants
22.3
20.8
18.8
15.9
Aricu1tura1 and forest. products
1 .2.
21.6
5
21.9
Total
- 100
100
100
100
Basic nm.terials
42.6
26.2
2547
28.6
Of vtlich: Chemicals.
21.9
14.5
15.7
17.0
Fabricated metal products
31.9
62.7
62.2
60.4
Products of light And food industries
21.7
10.1
11.2
10.1
Agricultural and forest products
3
0.9
0.9
TOtai.
100 100 100
The share of other Bloc cow tries in East Germany
about 72 percent in 1950 to. over 77 percent in 1953, but a ratio approxi-
mating 'that of 1950
hUshed in 1955 (see Table D-7). This
change was a consequence of the general Bloc eappaign to expend trade with
aft underdeveloped
. 17
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atINET
Table D-7
- Geographic Distribution of the Foreign Trade Turnover of st GermanY
1950 and 1953-55
Percent of Total
Sino-Soviet Bloc
USSR
European Satelliteo
1920
1953
;954
1:95,
72.3
39.7
32.6
77.5
45.7
25.6
76.1
44.o
24.7
72.0
38.3
25.8
Albania
Negligible
0.2
0.1
0.3
Bulgaria
0.9
1.9
2.0
2.1
Czechoslovakia
8.3
5.9
6.3
6.7
Rungary
3.8
3?9
4.0
4.4
Poland
18.9
11.3
10.3
9.7
Rumania
0.7
2.4
2.0
2.6
Communist China Korea and
Vietnam Negligible
6.2
7.4
7.9
Other countries 2/
27.7
22.5
23.9
28.0
Of *which: European countries aJ 27.2
20.6
21.5
24.0
Of vhicht. West
Germany
16.0
6
8.8
11.0
Total100
100 100 100
a.Includiog Yugoslavia, which in the s
Soviet Bloc countries. to f4& the ndemocra.tic vorid market".
is lumped with the Sino-
"IRET
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? --"wouL /
V. Hungary.
A. Major Economic Policies and Problems.
In accordance with Communist theory, the long-term economic policy of
Hungary stresses rapid industrialization of the country and socialization of
the means of production. For the First Five Year Plan (1950-1951),,the primary
emphasis was placed on the development of heavy industry, that is, on the machine-
building industry and the supporting industries supplying basic materials and
electric power. This wee in line with the Communist principle that investment
ohould first be concentrated on industries producing capital goods, which
ostensibly would then be used to produce more consumer goods.
Hungary's difficulties consist chiefly in attempting to build an economy
with a broad line of heavy industrial products on a weak foundation of natural
resources. It has attempted to finance substantial capital investment in
t,
heavy industryeomestie resources, and in so doing has limited consumption
evg. 1.Attez_
severely. At the same time, there mole, large drain on its resources through
(2)
payments to the USSR for4reparations,4relinquishment of the Soviet share in the
?(.3)
so-called "former German assets" organized as joint companies, andAthe support
of Soviet occupation troops. PAW materials for Hungarian industries must
largely be purchased abroad, and although the best Hungarian products have been
exported in an effort to Obtain essential imports, frequent shortages of raw
materials have occurred. One of Hungary's best resources, fertile land, has
been used under conditions villa produced far less output than would have been
possible with good management, better income incentives for farmers., and adequate
A)
suppliegkof agricultural implements and fertilizer. In spite of its endowment
47CPFT
6-2
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Of arable land and a re
SECK'T
ively large agricultural labor force, Hungary has been
unable to produee sufficientfood for domestie eonsumption.
BUngary atarted its first long-term plan in 1950 and 41M04t Umdtate1y
raised the productIon pelf& for the fin& year of the plan. Tn 1952, however,
there were many 1 ns of industr.ai difficulty, end the severe drought of that
year caused acute bortages of food product* in 1553. These agricuitu.1 and
industrial prdb.ems were zespons ible for the modification of economic policy in
June 1953 known as the s " ?AU of the Bloc countries were suffering
in a greater or lesser degree froni over spid i strialimation and neglect of
agriculture, but these problems
laus-in Hungary. Hungary V
bably the most radical of the.. Satellites. in it .tement of the new policy,
and the measurements taken in implementing it were more persistent and cOmplete
than those of the other eourt se measures were later mcd4fied,
however,
more extreme statementsof the political leaders of the earlY
"new course" period were repudiated.
The weaknesses in Hungary' econemi structure were by no means comple ly6)
remedied in the
followed, end I
o ameliorate
off
o.tict a
years during which the new eour
remains to be. aeon whe
were
ant changes have beea made
ry'S
economic Won substantially. Party and government
have frequently disavowed a tablishing the previous emphasis
on development of heavy industry.
share allocation to heavy Induatry under the "new course" policy-was considered
a corrective for the admittedly over- ambitious ves ent program. Nevertheless,
an increase in the percentage &location of investment, to that sector was
uction in both total Investment and the.
SECRET
/
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perceptible in the 1956 plan and even more so in the 4110 Oeconcl Five Year Plan.
It is- doubtful, therefore,
the pla. era have profited from past mistakes.
he period of the couree
by yr
agricultural output,
consumer goods
price.
empted to ratite the
ving them a
drive Wward ecUectivizatton of
accordingly waa relaxed for a
Collectivization
basic to the etflciet growth of farm pr
been abandLonad. as a-
toe
der distr bu-
ants
is ccaidered
0 long-rum,. however, and
stion was
renewed in 1955, end at least 50 percent or the arabialand is pi
d,11647/tAed
socialized by 1960. -GeiepereAtams of typE 8 I
do not give up their ownership of anima's and.
to promo
ive farming ai peasants with ab
rB in 1955 were principally peasan
sold moat of their lIvestock befor
nment is still seeking a Polley that will
441241;VeZ
join the -ockepwatt-zpagt. and to do so with
working capital. Never
Who owned lit
joining.
leen MO
In which the
been encou
be
substanta1 independent peasan
Intact.
With the change
in early 1955,. Hungary moved tow
of heavy u
however, and production. in the food processing
increase.
SECRET
"new a
se" objectives
sole on- the development
were
es was scheduled to
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,
RIAU.
The princia1 objective of Hungarian econcetc planningpresent
time is the equalization of its zequtrements for imported raw materials end its
ability to produce a surplus of salable goods for export The planners are
attacking this problem
replacement of iMPO
1 angles. One important goal is a widespread
resources
a with dOmesti
- output. Where possible., d
will be- developed to replace imports Of timber, pit props, cotton, nosierrous .
metals and terroaUoys foundry coke, and rubber, among other materials. Another
atm is to change the principal line of exports frca consumer goods such as
textiles to machinery and equipment. Improvement Of product design and
technology and a eduotion of manufacturing costs to a C
ale? major bectiyee in the efort to be.lanc
ve level are
there is a desire to. a '
u e eta In (le'
countries of the world,
where Hungarian products may be traded for raw materials under favorable
crctunstances.
Hungary's general emphae10 on heavy industry has, now beenmod._. ea in
the direction of greater concentration of effort on production lines in 4dch
it has bad Jong experience
which it has seeial resourcea. These industr es
include alumina and al- num, railroad equipment, electrical and electronic
-equipment, farm machinery, food proces$ng, and nacouticaln. Specialisa-
tion of Hungarian output along these lines hae been stressed at conferences
held by the Council for Economic Mutual
a
Ell
ricrtnr?
J4-'0At
)?
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_
.
Aehievsment
UNA"
the Iiret Five Year Plan .11222111./..
At the start of the P rst Five rear Plan in 1950, trungary bad
just completed a Three Year Plan of reconstructIon in two years and five
/1
months' thus permittingChange from fiscal /ear o calendar year accounting.
DUring this period, the remaining war damage to the industrial plant
was repaired, the cur re
wee reorganized r state ma
enterprises employing ten or
and batkjng system
n 0 and first large industries and then
control. Production in most of the basic
by 1947, end by 1949 in
ersone were bright under state
d exeseded. prewar output
omplete recovery in its productive
power. }6nxrwer employed in Industry in 1949 far exceeded.
1938:
and labor productivity had risen *bait 15 percent in both heavy light
induStrY and about 3.5 percent in the Thod. industry. Agricultural output
rose110--
sUbst tially in 1949 but still eznoi.inted,qnly an estimated 80 percent
of the prewar le 'vel, in short, the co: bed made excellent progrose in
et-on
onstruction and. h*d. almost overcome the i
fthe early postwar
atio.
tendencies
rat Five Year Plan was prepared in an atmosphere of
optimism by a government completely under the Control of ga Communist
Party. The
ed pace of economic growth was much more rapid than in the
previous plan, but the planners assessment at that tImne of the poseIbilItIee
of growth was generally realistic,ince the major industrial production and
investment goals set forth in.the original version of the plan were met or
? \ ?
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exceeded.. Oonsidering the economy as 4 whole, the
gerro
Wee the asunption that the overfulfillment ofAgoals in the tirgt year- of
the plan indite ed that the long-term goals for 1954 were not sufficiently
ambitoue to utilize aU the caabilitiea of the economy. reu in the fire
year, then about threefau.rthe of the major CQxet!14Ctiofl projeote were started,
requirements for raw materiala ezeeded the supply, and the outputs of the
electric power plants, the
Lye industries, and the metallurgical
industry ton not be pushed feat enough to keep the dvan d p ?ceasing and
fabricating.duatries fuflj supplied.
On the strength of he fl ye ?compliehmezita, however,
there was an extreme upward veviaion of the 1954 goals for production and
investment. e planned increnee in gross industrial o1uction wee
upward from 86 porcent to am percent p1enned cp1ta1 inveatmen
state vas raised from 50.9 billion forint to 85 billion foririte. The
revised
central object
re
revised plan ae stated to be the Conve Ion of
Hungary a predominantly agricultural econonr to a couxitrr of steel, pig
iron, and machines,
talon of the plan probably retarded the count:
economic growth, ainee it texnanded a
heavv indust
sly diaproportio
et
vestment prIorities for induatry which happy
Shortages of fooda and other con
of
icultural
# eccompenied by large
.1enatea. the worere and set up resistance to
the pressures for increased outputooksikee, Moreover,
the adoption of unbalanced and unrealistic objectives for 1954 led to much
4K17.gii
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veste, COflfUsiol2, end inefficiency.
2.
The national income of Hungary .rose about 50 peroent during.
the4 st Five rear Plan, eceord4ng to the official index calCulatsi from
values expre d in eenstent plan prices. This is 4
size) but it is so Whet
n the revised
the plan.
a
0
ease of respectable
for 1954 and eons &trebly
owing tabulation above that .
much of the increase as achieved, in the first tvo years of the period and,
more. r 0 that 4 in
1954:*
curred in both 1952 and
Ofteial Xnttex
ti
1949
100.0
1950
120.6
1951
141.2
1952
138.5
1953
156.7
1954
150.3
7-7A713;5;777 estimated groom rtinna1 prodeet in Table 2;-.4, below) shovs.
about the same inereaee during the plan pertod as that announeed officially for
national income (which In Ocemunist terninolo&jr excludes depreCiation And
ervicee not connected directly with the production of goods). The index in
Table X...4 and the official index of nationel income do not, however, show the
same pattern of grovth within the period. Since the Hungarian regime would
hardly publish figures indiceting in the national income in some years
of the plan if they had not actually te pleee, this disparity between the two
indexes suggests: that the product *ample end/or the production figures, weights,
and other data used at present in estimating the trend, in gross national product
have serious shortcomings. The indexes in Table E4 should therefore be
considered as provisional.
c/
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SECRIA
Hungary probably is the only European Satellite Which has experienced such
setbacks in economic growth during the past five years.
Comparatively large increases were also claimed in the gross
output of industry and its major components. Although nearly all of the
announced gains for total industry and the various industry grouping? fell
short of the extremely ambitious objectives formulated in 1951 for the end
of the period, they substantially exceeded the original targets in every case
except electric power (see Table Ep-1). The outstanding failure of the plan
was in agriculture, where an increase of 42 percent in gross production was
originally scheduled but only a 12-percent gain was 413med to have been
realized.
3. Personal Income and Consumption.
The average per capita income of workers and employees was
reported to have increased by 20 percent from 1949 to 1954, and according
to official claims, the real income of peasants increased somewhat more.
The total consumption of the population increased by 30 percent, compared
with the planned rise of 50 percent. Most of the indicated increase
occurred during the last year and a half of the plan, after the announcement
of the "new course" policy.
4. Enlargement of Industrial Capacity.
The industrial capacity of the country was enlarged during the
plan by the completion of 65 new factories, mostly for the production of
machinery and chemicals. Nineteen new electric power plants were put into
operation, two new foundries were completed and another almost finished,
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SECRti
Table B-1
Planned end. eported. Actual InereaSes in 1atjora1 ,
Income and Groaa Production in Major Economic Sectors 44v
during the First Five Xear Plan 4*)
M4- fif.
411
o d
Percent increase
Planned.
Reported.
Actual
lan2
1951
National income
63
130
50
Industry
86
210
155
Heavy Industry
104
230
168
Mining
55
142
96
Metallurgy
95
162
132
Machinery
25
390
264
Electric power
94
175
92
Building materials
115
306
162
Chemicals
138,
273
195
Lip and food industries
73
149
127
Textiles
52
92
67
Clothing
250
750
355
Woodworking
78
220
162
Paper and printing
56
116
Food processing
70
157
170
Construction
131
330
170
Agriculture
42
54
12
and a new p48 facto fie rolling mill e Completed. In addition, the
capacity of a number of older p
e enlarged. New eupmezit was
metalled. in the Ganz freight car andfactory, the Bed. Star tractor
plant, the (ieorgbi.Dej shipyard, the Ceepel automobile factory, and others.
The new or enlarged plant capacity
various new products, including mining
agricult
the roduction of
types of ch1ne tools,
ines, construction 1Chiflee and locomotives; antlfriction
bearings; and aynthetic material In a straw cellulose fantory. Chemicals
,
-;46071Jti
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,
%ALI
production wa advanced by building factories for pharmoceuti
dreetuffe, asphalt, fertilizer, and
largest venture of
the plan, the Stalinvaroe tron and steel eombine &tucontinued for the
period of the "new course to
to wore urgent use . A large
was oleo discontinue&
the reallocation of
abor
.. the Budapest savoy -
The capacity of light in4ustry was expanded little, except for en
Increase in the number of spindles in the spinning riUc and the comet tion
ofbnelinenmiUnndaneheinpmiil. Zntbetoodindutry, some cold
etorare plants and bakeries were
in decen
ralized loco ono.
Labor productivity a reportedo have increased 46.6 percent
in the i*nufaet
building trAdes. These increasesare wefl below the planned
om 1949 to
954 and 47.4 percent in the
percent for
of in . ApproxImately 63 percent. of the
industrialoutput was due to increased manpower and 37 percent
productivity.
'r
,se of 92
er
Use of Reaouces to2romote EcnnoIc1:ailment.
L. inover.
The population of Hungary in 1955 averaged 9.8 million persons)
of which about 4.5
civilian labor for
1949 to 1955, the civilian labor force rose by.over 12 percent. This accretion
r 46 per
of the population, were in the
ulation
nc
tied only 6 percent from
to the labor force was accomplished.
snite
abnormally large proportion of
,7
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? ,
women in
anomie
SEPP;:-
Iiit
population and a decreasing proportion of persons in the
ou
(15-64 yearn) -- both the renult of war losses.
The u gricultural labor forte increased 35 pereent between 1949
and 1955 through absorption of the unemployed. early years) transfer@
from agriculture, and an lac
the participation of women in the labor
force. The proportion of the cviUan .labcrr force in industry grew from lees
than one-fifth of the total in 19119 to about one-fourth in 1955. Construction,
transportation,el and the civil service
expansion of the nonagriculturalbor force during this period (see Table Z-2).
shared. in the general
labor force
ed by ab cut 2D01000 persons
from 1949 to 1953 but this trend ebseaently was halted and even reversed.
recentin years, the labor force in agriculture baa amounted to an estimated
44 percent of the total. This is still an excessive proportion by western
limited
or C
ation keep the productivity of farm labor low. Agricultural
machinery has so far
It
ettlIft4,
available only to the state farms, the
and to those private farmers.
d to pay a high fee for the services
of the machine-tractor stations. Wet cultivation is still done with farm
animals,
Otate investment has constituted the major portton of total
investment since 1949. Some investment is made by4Wsiccooperatives; this
is important in amount only in a
inves
The amount of private capital
n agricultureis not known but is probably small. Medium and-
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Table E-2
Estims,ted Population and Labor force in Hungary
1949-55
1949, 1950 1251 1952 .1953. 1954 1953
Thousands 2/
Population 9,240 9,330 9,420 9.500 9,590 9,690 9.000
Civilian labor force 3.990 4.150 4.270 4.320 4.370 4.430 4,490
Agricultural 2,120 2,090 2,070 1,990 1,920 1,930 1,970
Nonagricultural 1,870 2,060 2,200 2,330 2,450 2,500 2,520
Agricultural
Nonagricultural
Industry
Construction
Transportation
Trade
Other
4.014 Z
41??????????????????????????????
Percent of Civilian Labor Force
53.1 50.4 48.5 46.1 43.9 43.6
46.9 49.6 51.5 53.9 56.1 56.4
19.3 19.3 20.0 21.2 22.7 24.6
2.5 3.9 5.2 6.3 6.4 5.4
4.1 4.2 4.5 4.0 5.1 5.2
5.3 5.5 5.5 5.4 5.4 5.7
iculturalW 15.7 16.7 16.3 16.2 16.5 15.5
a. Averages of estimates for thelbeginning and end of the year.
b. Including the civil service, which increased from 4.8 percent Of the civilian labor
force in 1949 to 6.3 percent in 1955.
long tarn loans have been made by the state to agricultural collectives
or other cooperative enterprises but not to private persons except for
housing. 4e state investment taatevigh---the.--Rettesea-btlAgebb has been as
follows since 1949:
Cross Capital Divestment by the State
(m(llion Porints)
Investment through
Total Actual the Budget
Investment (Current Prices)
(Plan Prices) Bcheduled Actual
1949 ILA. 3,320 N.A.
1950 9,700 7,250 N.A.
1951 13,100 11,700 11. A .
1952 16,000 15,300 N.A.
1
1
3.953 16.000 19,019 15.337
1954 Up 300 12,656 9.300
1955 11,200 9,000 9,800
SECRET
43.9
56.1
24.9
4.7
5.4
6.1
15.0
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iveetnent probablyd or even exceeded the
in the budget plans until 19532 vhen itnreetment was ruch smaller than
scheduled. Ennaary wan forced to reduce ite Lnventment goal. for 1954
in the middle of the year, and the target for 1955
The share
try in state capital invee
onservative.
mainta.ne4 at a high level (averaging about 40 of the total) throughout the
P st Five Lear Plan4
reduced in 19551 permitting a eubstantlal
increase In the shares allocated to the light nd food. industry and agriculture,
which had alao been zaiee&in 1954. Planned and actual allocations of state
Capital investment are shown in Table E.3 for the period 19504-54.
Table E-5
State Capital Thveatinent under the First Five leer Plan
In gUngary, by Major Sector
1950-54
41
0 lro into a/
Percent of Total
Plan
Revised
Plan Actual
Original
Mem
Rivis?
Plan
Actual
Industry
e0.45
41.00
29.75
40.2
48.2
44.1
Bee.vy industry
17.45
37.50
27.45
34.3
44.1
40.7
Light and food industry3.00
3.50
2.30
5.9
4.1
3.4
Construction industry
0.85
3.00
1.75
1.7
3.5
2.6
Agriculture
8.00
11.00
9.30
15.7
12.9
13.8
Transportation and
-communications
7.50
lox()
8.60
14.7
11.8
12.8
Trade
0.90
1.00
1.70
1.8
1.2
2.5
Rousing and public works
7.40
14.00
10.00
14.5
16.5
14,0
Other
5.
54)0
6.3D
11.4
Total
50.90
85.00
67.4
100.0
100.0
100.0
. At plsn p c a.
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' ?
induatrial investrnerite feU short of the augmented goals of the
ive Year
ri every major category, but the amounts originally
planned were exceeded except in the machi building industryn4 light and
food industry. Inveetment in maehine4-buil4ing facial
Softer mid-1953 in order to free resotrce
cut s erely
sic
materiale and power In --les. Even the existing plants in the machine-
buIlding Industry could not be fully utilized. at this time because of the
Shortages or poor quality of forging., castings, and other n and steel
State investment in agricultine has consisted largely Of
xpenditures for the development of state :arms and
rector stations)
including the purchase of livestock for the state farms and of machinery for
both type. of organizations. ReforetetIon and irrigation projects axe also
luded in agricultural investment. State sari
vestment not
including medium and lOng-term loans -to the agricultural SosposattUsal
averaged about 17 pereent of total state investment during the Three lear
n 14 pare pt otAtotal during the First Five Year
lan (1947-49)
Plan. The share of agriculture in state capital investment since 1947 is
shown in the foUowIn tabulation:
SUM'
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uutt:-..41'
State Investment in Agriculture
Value
(Billion Forints
at 1 July, 1949 Prices
Percent of
Motel State
Investment
1947-49 average
1.7
17.1
1549
1.2
13.0
100
0.9
9.0
1951
1.4
11.0
1952
2.1
13.0
1953
2.2
13.0
1954
2.7
23.0
1950.54 average
9.3
13.';
1955
2.5
26.0
D. Survey of Naaor Sectors of the Economy.
. General Economic Growth.
The gross national product ((NP) of Hungary is estimated to have
increased by about one-half from 1949 to 1954.. After a further increase of
moderate size in 1955, the GNP probably was nearly 50 percent higher than
in 1938. Output in the industry and transportation sectors has experienced
the most rapid growth, nearly doubling in each caseZ44a4w1949 (see Table E-4).
There was also a substantial growth in the volume of construction, which
apparently reached a peak in 1953 and declined somewhat with the abandonment
of certain projects under the "new course."
Agricultural production moved erratically because of varying
weather conditions and shifts in agricultural policies. Estimated output in
several years of the plan period was .about one-sixth above that of 1949. A
postwar ugh was reached in 1955, but output apparently was still significantly
smaller than before the var.
2. Industry.
a. Production Trends.
erpnrr
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Table E-4
Indexes of Estimated Gross National Product and Production by Economic Sector in
1938 and 1948.55
1949
100
1938
19148
2.2.,q
1950
1951
1952
1953
3.954
1955
Gross National product
107
86
100
3.3.7
328
138
148
149
158
Industry
82
86
100
121
141
164
177
184
197
Agriculture and forestry
149
98
100
115
116
106
117
110
122
Construction
65
43
100
130
156
186
3.91
169
160
Transportation and communications
79
85
100
In
140
170
189
189
199
Trade and. services
112
91
100
105
109
13.0
120
132
137
e.77-1-es revs calculated prior to the wblication of the Ihn3garfeui atatiatica.l. handbook in 1956 and. should therefore be
regarded as provisional. See footnote on p.
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, '1111:1-
Table E-5 preaente a comparison of the outputs of a nuMber
of important industrial prodticts in 1954 and 1955 with the goals set in the
Five Year Plan for 1954. Although the growth attained in the pro diction of
coal e
on and
and
st
on materials was substantial
it was insufficient to keep the economy rurnig at the deaire6pace.
in l9 L9
mined
Total coal production increased from 11.8 million metric tons
22.)6 million metric tone in 1955. The heat value of the coal
declined, however, so that
or
needed
to produce the same amount or energy.- The quality of Hungarian coal is for
the most part poor and,: except f
making be metallurgical-gr
1
.d deposits near Pecs, is unfit for
d for production of fron and steel.
Uungary is Jag to free itself from dependency on imports of coke and bas
been constrtjctiflg a modem biprod ct coking plant at Sztallnvaroa Which is
intended to use *cal from Fees nd Komlo. Becentreportais se, however)
that the new plant will depend. for itesupply on a mixture of various kinds
of oa1, chiefly imported. The best indigenous bituminous coals go to the
gas and coke plants and. to heavy industry, leaving only the brovn coal for
the use of power plants and. rilro?da.
sed production of electric power has been the object
of great effort. Dwing the period 1949-1955 Hungary was reported to have built
19 power stations, increasing output from 2.52 billion kwh in 1949 to 5.4$
billion kwh in 1955. Els
rgy Is required in large quantities for
industrial use, particularly for refining. aluminum. The aluminum industry reportedly
uses 17 percent of the total
electric power, even though most of
SECal
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Table E-5
Planned and Actual Output of Selected Products in Hungary
1954-55
Electric power
Coal (all types)
P4g iron
Crude steel
Bricks
Cement
Trucks
Cobbines
Radios
Cotton cloth
Wool cloth
Knitwear
Leather shoes
Sugar
Billion kvh
Million metric tons
Thousand metric tone
Thousand metric tons
Millions
Thousand metric tons
Units
Units
Thousands
Million sq. meters
Million sq. meters
Metric tons
Million pairs
Thousand metric tons
1954
Original
Man
// 21/
.24
11.8
960
1,600
N.A.
1,050
9,000
N.A.
146
258
23.9
N.A.
N.A.
279
Revised
Plan
6.05
27.5
1,280
2,200
1,420
2,100
9,000
1,500
264
27.0
4,750
12.3
1955
Actual Actual
4.83 5,43
21.5 22.3
820 855
1,491 1,629
1,138 1,190
947 1,175
4,217 3,664
925 1,535
258 377
224 234
21 26
4,124 5,057
10.7 12.4
274 Z1/
Perceat
Increase
1949 to 1955
115
89
115
89
208
113
268
454
41
13
295
22
18
a. Output in 1949 vas negligible or zero.
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the bauxite and alumina produced In Hungary is shipped to zeOhoalov&1ia
and the TJ&R for refining.
Although pig iron eM crude steel produCtion increased
by 106 percent and 73 percent,respectively, bet en 1949 end 1954, output
of both products fell far:short of the plan. Moreover, the qual
iron and steel produdI it HUn
the quality of ma hine products made from
of rejects, ubla odction hes been m
In the dustrY, iu
attain a larger degree of lf-suf icienty.
'iv Year Plan was confined chiefly to the me
for domestic use, but produc t of
r or
very pot end has held
t.
of the
proport1on
er than that reported.
ry has been struggling to
oduction
st
e of basic Chemicals
uti els was also
The. Country has not been able to meets own requiremen sdpfOr ca lel
carbide, .u.atic soda 1 chemicals, and no soda ash is produced.
b.
blame.
The most acute problem of industry is the shortage of raw -
materials, ithich necessitates the eqort of produtebadly needed at home
in, order to obtain supplies of the most essential materials. A second and
related prob1eis the baCkward technoloa of Hungarian industry, which
keeps production costs high and makes it difficult to sell Thuigerian products
AP,
in the highly competitive narke or estprn,airope4
;
Although it heel been admitted officially that shortage of
raw materials are the chief industrial
elamd that new
rade agreements will assure the import of necessary base materials and power
in the future. These raw materials itaade not only coal and iron ore but also
-
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. nickel, zinc, pyrites) flax, and other nod?t1ea. The mach e-tui ding
industriesre e
to furnish the bulk at future Hungarian exports to
countries outside. the
A second and related. problem is the bac .rd technology
of Hungarian indUtr
keeps pzoduotiou coots high and rakes it
difficult to sell Thmgarian products in the Iy competitive rarkets of
lieste
MUMeroUs off Id
Zr
a have emphasized the. obsolescent
character of the existing indust equipment) even. in
specialities as -e electrical eqUipment industry.
3. 400.
Aaring e First Five
rose by a meager 12 percent
with the 54 percent Increase ec
Acreage
during
4e tiled*
agricultural production
to officialreports, in corps son
The plan e
ops, oil seeds, vegetables, and ricen ally
auto
in grain crops and livestock fodder crops
utput in 1955 was veU above the average
annual outputduring the First Five "Year Flan, and crap production probably
TWB e highest since1951, XvZpreaeive gains were also rnade in livestock
and poultry numbers and in the output of animal produets. Outputs of
breadgraihel potatoes, and antral products during e past several years have
generally remained well below pre
capita prouction of a molter or
evels)
ow
Indexes of the pe
ant foodstuffs during the period
IZZif
Of
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1950-55 are presented in Table D-6.
bla S6
Indexes of Per C*pita Production of Selected F odstuffs
in Eungary
1950-55-
7 a 1
Potatoes
I-50 1221
89 107
56 90
1952
1221
73
76
43
72
1254 1222
64 76
62 89
Sugar
216
219
174
235
223
251
Neat
79
59
76
78
62
67
Animal fate
46
38
44
46
42
48
Milk
66
62
72
65
73
78
Vegetable oils
362
677
315
508
400
477
b. Colle?tivization1
Ag'r1culturl collectivization ?fforts were renewed. in
1955 after the dismi 1 of Premier lore Nagyand the repudiation of the
?
"new course" policy. Atter the Nagy gove
dissatisfied members to les.ve.the eollectivea,
permission to
,ere withdrew .11a
co.26e,trid_
hundreds of collectives were dlssolved. The number a .000pits**tves dropped
clu)(41;9 )(la_ zef'Zyz_.
by about one-eixth onthig folloving the
. se" annovnement and. the
number of households vas reduce by nearly e.-half. This setback to the
to11eetivization effort was so severe that the losses had not yet been made
up by the end of 1955 (eee Table E07).
e e
itions to the membership
of collectives have Coneiated. primarily of 'amilies with amali land holdings.
1956, collective farms
ed 21 percent and state farms. about 13
percent of the total arable land, making a total of 34 percent of the arable
land in the socialised sector.
CP I
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Table N-7
Socialization of Agriculture in HUngary
1949.56
December 1949
September 1950
November 1951
December 1952
April 1953
Decober 1953
December 1954
December 1955
March 1956
Collective Farms
State Farms
Total
Socialized Sector
CO5
Fri
cr-2
=2
rvl
.---ti.
Number
of Farms
Number of Households
.........L_e_lcbilrhous_
40
89
236
318
340
238
185
245
280
ANI.01.1??????????
Area
Hectares of
Arable Land
(Thousands)
Percent
of Total
Arable Lath
Percent
or Total
Arabic Land
Hectares of
Arable Land
(Thousands)
Percent
of Total
Arable Land
1,760
2,229
14,653
5,300
5,315
4,677
4,381
4,996
5,186
173
403
898
1,416
1,445
1,117
940
1,107
1,174
3.0
7.0
15.6
24.6
26.0
20.1
16.9
19.9
21.1
230
345
518
731
734
693
689
706
706
4.0
6.0
9.0
12.7
13.2
12.5
12.4
12.7
12.7
7.0
13.0
24.6
37.3
39.2
32.6
29.3
32.6
33.8
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c. Mechanization.
Mechani7e:U=0f agriculture progressed at a faster rate
in 1955 than in previous years, but its level is still low by Western
SUropean standards. Although the production of farm machinery has increased
considerably since 1949, the country's export requirements have absorbed
a major part of such manufactures. Consevently, the planned deliveries
of machinery to the agricultural sector during the 'first 71ve Year Plan
were not fully carried out, as is shown by the following figures:
Deliveries of Agricultural Machines
to State Parma and STS's4_17?0-54*
Planned
'
Actual
Actual Deliveries
as Percent of Plan
Tractors
26,100
12,403
48
Tractor plows
17,320
11,488
66
Harrows
11,300
8,053
71
Grain binders
9,060
3,448
38
Cultivators
6,800
4,277
? 63
Grain drills
5,300
4,729
89
Combines
2,600
2,052
79
* A small nuMber of these machines, amounting to less than 5 percent
of the total, were delivered to collective fares or private farmers.
-
In 19550 there were 312 machine-tractor stations (6' 8) with about
13,000 tractors, or an average of 42 tractors per station. Indications
are that the machinery of the MTS's has not been fully used because of a
leek of trained personnel, poor maintenance, shortage of parts, and. poor -
planning. Secause of high and discriminatory fees, it is doubtful whether
the private farms obtain much benefit fraa the machinery of the S' a. Most
of the work on private fares is done with horse-drawn machinery. Small
machines and implements have usually been scarce, but the situation has
improved since 1953.
RI:e4cg'
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U.
dWar 112 the major east-'west railroad lines of Thm
idges d troyed in the war have b
atlons faciUties have been natal d
de and stations have, been improved.
n of 1occncttves and rolling stock,
have been strengthened and. rail
rebuilt. Improved signal and c
on the major lines, .and key ra
In spite of e-
the inventory is inadequate to handle
nt volume of -
Us-11)(st n of tarnaratud time for freight core by 17 percent between 1950
and 1955 reflects the growingit of freight car utilization. There
were izable thereases in the volume of reight traffic from 1949 to 1955,
as ehovn in the to wing tabulationt
acci,lroad
t fic,01 ns)
Ya.Y
1949
4,510
209
1954
6,087
867
702
1955
8,499
935
744
1bet of the va
199, but mst housing
urban and rural dwellin
damage to
took was repaired. by
the country is still we old. Construiti.on of
1949 to 1954 aaounted to 138,000 and 100,000
units,respectively. in though state expenditures
have Increased
1952, relatively
construction
s tar dwelling
. units have not been fuiJifled. Construction has not kept up with the,
average. annual increase in. population, for which about 22,500 new unite
are retuired ennuaUy. Even the repair aM r
took. of houses irnv'e not been
4L6dET
_!3s of the existing
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,
6. Retail
emaining unchanged or actually decreasing in
years of the plan, t
lume oi et&ii sales in Mingary rose almost 20
percent in 1954 432$ 28 percent in 1955.
of the increased volume of cons
iviplementation of the
ineased by 31 ree
of total retail trade
stimul4so. also increased but
nonfood produc
food year 1954/55 reac
average. (seeAPPenetlx
inadequate iAmilk
e" o1
1953
2,362 c
able 5).
9
rapid r-
the re?u1t -
e4 Ofl the market ur1ng the
- of n
of food. in
ite
t3 percent
the
es, r 90 PerCent of the prewar
a
and barely adequa
spite of improvements since 1949 consumer goods
igh-pricede
7. ?Pgnrrae.
ment i.n 1953 vas an Inc
associated aim
e
the attempt of Sungary to.
despite its resource der
almost doubled. during the
stressed. in air
is
c rce and
course" annul:lace-
th non-Blot camtries. An
rnipply its own coal
encies.
next two.
kr,
d other ray
Lading
yith 0=U-1es outsl4e the Bloc
sp. rising from 23 per
1953 to percent
in 1954 and 35 percent in 1955.
SECRET
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OtbKt!
,
The value of foreign trade with other countries of the Moto also increased.
in 1954 but ecUnea. in 1955.
in both years.
?e SR repartedly declined
The increase in Uungsr a trade 'wi-tb the Western c
xteut de possible by -credits granted by
Hungary had
ebta to the West to
vas striving for a fav
The total
but the
able.
have also
the war
of cotton
a
e with countries ou
BY 1955,
t 229 rniiin and
h to pay i off.
d to be favorable,
in the coMModity t n Of
Hungary was a net imworter, of textiles before
rter. About 50 pereent of total production
in 1955. Since Hungary
Lu selling such eon.suner goods as bieyelest. toys,
Western Europe, the. planners have concluded:e of certain types
sets in
ty
of consumer goods abroad does
they are therefore attempting
of heavy industrial products instead. Among the
new commodities which Hungary is expo
steel pipe, and rolled s
the Vest are residual oil,
of Bugary a elaborate plans to
e of paynents position is precarious. A recent agree-
s foreign
ment with Yugoaleviit calls for reparations payments totalling $85 million
over the next 5 years, and another agree
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UK provides for
nri
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payment of $12.6 mi .n in full settinent of prevar andwart1me claim
against Hungary. In .ad?.tt Ion, a sizableforeign ,deb:t must be serviced,
an payments mis . be made to the USSR for oeuatirn costs and the rano-
fer to Thrngary of the Soviet
a. o1ut eompaies formed from former
?German assets. As a cOnseajence, allrigary vill iflke rnzbstantialexports
vi -U: any returnIn the for of needed raw materials.
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tlait I
VI. Poland.
A. Ge___r.al Policy and Achievements,.
Polish economic policies during the postwar period followed a
pat to ell Soviet Bloc countries. After a short period of
reconstruction (1947-49), during
ich the Communist party consolidated
and broadened its control over the economy, Poland entered into a Six rear
Plan (1950-55) of economic development. This plan was designed primarily
to hasten the industrialization of the country by all possible means.
Although other branches of the economy were alsoplanned to expand rapidly,
it was clearly intended that heavy industry and economic activities directly
conneeted with receive
priorities in allocations of the
factors of production.
The b*year targets were in general not achieved. The agricultural
goals proved to be copl?3y unrealistic, and official claims of over-
fulfillment of goals for industry are open to question. Nevertheless,
Polish industrial growth was extrenely rapid during the 195045 period
(about 11 percent a year, judging by production data available for a
sample of products). With the aid of newly-acquired productive capacity
in the western territories detached from Germany, Poland t only eandd
production of
rial materials such as steel, coal, electric power,
and basic chemicals but also undertook large-scale production of a wide.
range of technically complex items in the machine-building and chemical
industries. Expansion of heavy industry was the primary factor causing
an estimated growth of
50 percent in POland's gross national product
during the Six Tear Plan period. Agriculture and related light industries
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on the other hand, fared badly. Agricultural production in 1955 WOW
about 13 percent
942 but only L. percent above the good crop year
of 195a. The stagnation of agricultural product
orAy to low priorities for skilled labor and
attributable not
1 goods in this area
but also to the deleterious efects on farmer ?s incentives of the system
of forced deliveries of farm produ
prices and the continuing
threat of collectivisation.. The process of collectivisation was very
slows however,
the end of 19% sta Dative farms
controlled only 24percent of the agricultural land, the lowest percentage
in the Abropean SatsUites.
The great
ty etwean the growth of heavy industry and that
of light industry and agriculture
these products T
faster than the co
reflected
tive increases
consumtinn of goods) the principal en
'rives
eased about 3 times
f goods from 1919 to 1955. A small rise
in per capita consumption appears to have taken place, but beesuse of
severe shortages of certain coumodities, the poor system of distribution,
and a decline in housing space per capitain urban areas people
miy not feel at they are better off now than in 1949. Even
officiAl statistics show that money waGes inA.lany occupations- increased
xre lowly than the cost of living. Si e 1953, there has been widespread
criticip of the so.caUed. imbalance in the growth of The economy, and steps
have been taken to correct it to some degree by devoting a larger part of
the gains in production to raising consumptien.
1. tIes of Resources to. Praio.te onontic Devel.
&ECRU
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Table F-i.
die of.."-oc-tc
Indexes of Estimated Production in Selected/Sectors and of Ead-Utes of Gross National Product in Poland
"r 1948-55
1211?
.Gross national product
96
Industry
86
Heavy industry
89
Light industry
82
Agriculture
78
rs-
4.avestment
=11
Inn
le==1 Consumption of goods .a/
Consumption or goods per capita
el
N. A.
N. A.
1 49 *
100
cosz
rim
1919
1950
1251
122
125
126
122
108
157
121
116
52
1953*54
1955
100
100
100
100
100
00
100
110
115
114
117
113
142
3.14
123
135
143
124
108
185
119
112
152
164
134
109
211
122
113
/a
168
185
141
114
215
130
457
185
2(Y7
151
3.1.8
215
139
124
=
- rin
!moot
a. Per capita consumption of selected consumer goods (
The index excludes services and consumer durables, and
derived from an official index of real muses.
official reports) was vetghted by estimated ave
adjustment was made for Changes in the quality of8.
prices . in. state stores in 1955
The index number for 1955 as
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a. Han Ir.
The PoliSh population emerged irom World War 11
severely reduced in:sise as a result of heavy war losses, territorial
changes, and forced emigration.. The population in 1949 was about 24
million compared to 31 million before' the war within the same boundaries.
Althouoh the lands acquired
re highly industrialized
large portion of their German inhabitants had been forced to leave the
country. Consequently, only percent of the labor force in 1943 VAS
employed outside agriculture. Through about 1950labor was recruited or
Al
industry and c9itruction from, low-productivity occupations such as
agriculture, private trade, and dome ic service. There was also a
heavy demand for labor on the part of the rilitary, the internal
security forces, and the civil service.
1950,After nationalization of nonagricultural
WApa414/1.4,
ocouwaratems was almost complete,
nt a
continued. The *new 'course" efforts to stulate a
jcult
e
production
have led to a reversal of this trend since 1953, however. Recent
government measures designed to ease the very tight labor situation
include the demobilization of 47,000 men and
e cranti
of amnestiee
to some 70,000 political prisoners. Throughout the postwar peziod, the
state has also sought with apparent success to increase the participaticn
of women in the urban labor force. Low real wages for most men have
been an important stimulus in forcing wives to work. Table F-2 show
the growth of the Polish population and labor force since 1943.
b. Invstment.
The bulk of capital=stment during the postwar
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rrl
nemal
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&::
?"C
Table F-2
Population and labor Force in Poland
194r=rt055
Thousands a/
1948
1949
1950
1951
1952
1953
1954
1955
.Population
23,850
24,300
24,770
25,270
25,750
26,250
26,760
27,280
Civilian labor force
120430
12,600
12,760
12,860
13,010
13,360
13,640
13,770
Agricultural
8,100
7,850
71570
7,300
7,240
7,310
7,380
7,240
Nonagricultural
4,330
4,750
5,190
5,560
5,770
6,050
6,2601
6,530
Of which: Industrial.A/
1,456
1,636
1,972
2,195
2,327
2,466
2,576
2,693
a, Averages of estimates for the beginning and end of the year except for industrial labor force data, which are annual averacts.
b. Excluding private industry and handicrafts.
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period has been allocated to industry in order to support the planned
growth in imust output (see Table F-3). Agricultureeceived an
extremely small share (abautaWperee ), considering its importance
in the gross nat
t. Housing aleo s
the allocation
of investment funds, resulting in a decline houaing apace per capita.
The concentration of investment in industry on the other hand, 11416
greater than planned. This policy undoubtedly was a strong stimulus 4-6
economic growth in the short run but it was also largely responsible
for the lag in consumer goods production and has left a legacy of problems
which will affect investment allocations in the new Five Year Plan.
Xeonomie Planning and Control,.
The operation of economic planning and control has
tended increasingly to conform to
So
pattern. On
ole it
has been inefficient and wasteful. re in general unrealsticafly
high, and when quantity plans were .r.et, quality or assortment of
goods often suffered. Accounting and financial control over the ex-
penditures of enterprises was severely damaged 'by a great inflation of
wage rates d?ring a period when prices of produe
da were nearly
constant. This resulted in large and increasing subsidy parf.ents from
the state budget to nearly Ail heavy industries.- There has been some
recent improvement in both planning and control methods, however.
Planned increases in output for
10 n
5 years appear to be much more
realistic than in the past. Keasures intended to reduce waste include
the r.;ajor price-cost reform of January 1356, which is designed .to make
most industrial enterprises profitable and therefore more amenable to
Stai
^..
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Table 7-3
Distribution of Centralized Investment in Poland, by Major Category Li/
19474and 1949-55
Percent of Total
Total during
Period 1950-55
1.1
12122
1222224
222
1223.
1954
Planned Actual
Industry
35.4
43.1
42.1
46.6(
56.8
52.4
50.8
45.4
50.7
Agriculture and forestry
15.9
11.0
10.1
10.3
8.2
8.3
10.7
11.9
8.5
d
Transportation and communications
27.5
18.4
15.7
15.Z
12.6
11.6
10.8
14.9
12.6
Internal trade
2.2
5.1
5.1
5.3
3.4
3.6
3.1
4.2
3.7
e
Housing and coomunal buildings
9.6
12.7
12.0
3.34
13.6
13.5
15.1
11.5
13.6
Cultural and social
6.4
7.6
8.3
7.7
4.3
4.7
5.8
8.8
10.9
i
Miscellaneous
3.0
2.1
6.7
0.9
1.1
5.9
3.7
3.3
/
Total
100.0
100.0
100.0
100.,4
100.0
lom
100.0
100.0
100.0
a. The planned and actual distributions of investment during the period 1950-55 are based on 1950 prices and 1956 prices, respectively, and
data for 1953 and 1954 are based on 1953 prices. Changes in relative prices; however, probably do not greatly affect the percentage distribu-
tion of investment by sector, as the percentages given in the Six Year Plan fulfillment report are close to a weighted average of the percent-
ages available for individual years through 1954. Data are fraa the following sources: 1947 and 1949-52, 11; 1953-54, 2/1 1950-55 total,
planned 3/ and actual 14/.
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accounting control.
es in Pea
c De
phases in Polish econon
d War II, there have been 3 cleari delineated
period; 1950-53 period of hadlongdustrialisation; and 19I5,
a period of eadjnstent. The effect of those changes in policy on
the growth and allocation of output can be seen Tables I w1 to F..31
ai..,ove, and in the followingtabulation, wIch shows the varing share
to development: l947
reco
of accuNulation
nation) income:
1949
2342
1950
27.2
1951
28.1
1952
26.9
1953
Z541
1954 (plan)
21.2
1955 (plan)
19.6
a.1947749.
The period of the Three Year Plan of reconstruction
WAS one of extreely rapid recovery of ell parts of The economy from the low
levels of output of the first postwar years-. Industrial recovery was
greatl, aided by the reconstruction of plants in the Silesian territories
during 1947449 and, to some extent during the first few years of the Six
Year Plan.
* Accumulation consists essentially of capital investment plus increases
in working capital and etockpiles. National income; in the Marxist
definition, excludes most direct services and depreciation allowances
but includes indirect taxes. The percentages are based on data in
currant prices.
94
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the urban
In 1946.447, agricutural production was ao low that ?
on could not be fed without extensive imports. By
1949, agricultural production had recovered sufficientl
domestic requirements and in addition
exports ef some foods. gl
The improvement in food supplies was achieved without extensive use of
compulsory deliver
Durthg the
Te
proeucts and without co1lectivizaton.
which alrea43r owned
rapidly ex
most large-scale induatry, wholesale trade, and
tended its control over retail trade By the end of 1949, only a part
of handicrafts and 44
roent of retail trade nod in-private
(By 191, the share of p4vate trade had declined to only
5 percent.
d simultaneously in invstmett
and corsumption, whose shares in th national income did not vary sig..
nificantly during the. period.
vestment was suplemented
consickrably fram foreign sources, particularly during the period of
UKRRA aid. Is terms of dollars or 1937 zlotys, imports greatly exceeded
exports in 1947-48. In
of current domestic priceel the trade
probably was even greater. By 1949, however, foreign trade was
about balanced in terms of dollars.
b.. 1950-5.3.
The first I. years of the Si.x Tear Plan saw a trsendous
concentration of resources on the construction of new .industrial projects
plus the added strain, after the s
of the Korean war, of a substantial
program for the production of modern military equipment such as jet,
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aircraft and
about 14 Pere
SECT
Production of heavy industry increased at a rate of
t per year. After a good
industry grew only an es ima
and agricultura.1 prodttc
employment continued
forted deliveries
n 1950, production of light
d 5 percent a year during the 195143 period,
on fell. A rapid expansion of nonagricultural
'icu1tura1 labor force but
agricutural products insured the e food supplie
Investment more than doubled
of goods rose little if at A31
income (at
In spite of the fact
the period, rhile the consumption
e of accumulation in the national
es) rose from 23 pereent in 1949 to 28 percent in 1951
t prices of consumer goods were increasing faster than
these, of capital goods. The ahem of industry in centralised investment
57 -
rose from 43 percent in 1949 to 4'percent in 1952, mfle the share of
griculture fell fran II percent to 8
heavy industry ae over
t. The investment plan for
9 percent over the 19506.53 period, but
the investment plans for most other sectors were underftlfilled, e.g., in
light industry by 23 percent, in agriculture by 25 percent, and in social-
cultural construction b
45 percent. fy The low priority consumption and
consumer welfare in this period is also
by the dLine in both absolute
and relative ternts of dgetary expenditures for social and cult
At the same time, military
Although
as
rapidly
trade statistics- for the 195043 period
incomplete, it is probable that Poland
no 'net foreign aid. Polish exports
1949 to. 1953, While imports increased by
purposes.
It development with little or
eased by 850 million rubles from
570 million rubles.
4RET
r)be
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aqi I
?
?
The cost of headlong industrialization vas increazed by waste and
inefficiency,cieney, about reach there have been severe and numerous complaints in
the Polish literature. large new projects were
could have
Waste resul ing
cost by modernizing
too great a prea
en although output
ting facilities.
t was protected
and even fostered by the irrational price-cost structure discussed above.
c. 19547-55'
Economic developrnen
those of the preceding period with
95455 were in Sharp contrast to
growth of production and
especially to the allocation of resources, although the "new c
gee
were not as great as in car 1. other satellites. The average rate of growth
of heavy industry declined to
industry and agriculture incr
12 percent a year, while that of light
o 6 percentand 4 percentrespectively.
Capital vestment rewained at about the 19
prices, dec
in terms of constant
out 25 percent of the national income in 1953 to below
20 percent in 1955. This drop Is all
prices were fa3li_
e notable in that consumer goods
le prices of capital goods were, stable or shoved a
slight rise. A decided rise in consumption took place in 1954-55, as is shown
by the c
tion index in Table F-1 . Although
Va$ higher in 1955
extents o
the
roughly by the inde,4 the level of consumption probably
postwar year. The share of vestment
n industry fell from 57 percent to 51 percent from 195271to 1954, while.
the share of agriculture and forestry rose from 8 percent to nearly 11 percent.
,,R
6 ET
-
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In addition, pri-ate farnrs received larger credits than before, and
the flow of workers from the farms to the cities was reversed. Military
aependituree rose.much nore slowly thannperiod. The
e prec
share of social-cultural expenditures in the bndget increased, while
the share of investment declined.
By the end of 1955, it was apparenthat consumer goode
production would continue to receive higher priorities than in the
2950.53 period. 'Nett course', policies have in general been continued,
A,
On the other hand recent demobilizatioieof military personnel, political
amnesties, and reductions of admitistrative personnel and costs
represent an atteppt to einimize the depressive e
course" on the country's industri
ct of the new
The relaxation of the
international situation also led to a cut in the military budget for
1956.
B. Survey of Sectors of the Etopemye
1. Tnduetry.
a. principal Developmente,
Polish industry grew at a rapid rate during the
Six /ear Plan. Production of ineustrial materials (fuels, metals
chemicals, and ail aterials) increased by an estimated 72 percent,
while the output of the achine-building ?and defense ineustries aleost
tripled. A significant share of inuustrial production now represents.
items not produced or produced only in negligible quantities prior
aeeee
to 1949. lnc1ud in this ca e !co ,4most pharmaceuticals and synthetic
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materials, boilers and turbines, automobiles and
ion
4/
bearings, various types of egriculturn, mathinery? azleide range of
consumer urebies. The smallest pereentege increases in output during
the plan were newly cotton fabrics, and food processing.
The coal ndustry pc cents a spectal web.em sinee it not
only provides the dxstie econar with out 90 percent
? energy but also supplies coal to other Satelutes and the USSR and is
the most Important means of earning western currenctes. Coal produeti
41
increased by only 27 percent during tie period,. to a level onlyidlightly
internal
id
in excess of 1943 production thin the same b
demand for coal bas
development of metal
transport. ..Although
coke heLcals, electric
ions to los-priority 4
(espeeiauy household consumers) were cut,
necessary.
b. Analytis P
The Six Year P
not fulfiUe
era
lab (see Table P-3a). Ot2tput of he
three key products of electric power',
example,
various other -? mater
percentages. The degree
be clearly ascertained tr
of t
1955 te
Laic were
oa
the Itmited- data availablef
If
Le steel, for
o 8 percent. Goals for
d by substantially larger
nt in machinery output cannot
produets. Nevtheless, official claims of oerfu1fiiTment of the pa ars
for industrial output in the socialist sector and. forthe output of heavy d,si.e64-4-6744/
are diff coital')
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OLLII1L I
?
Table F-3a
Planned and Actual Output of Selected Products in Poland
1955
/
Actual Percent
Output Increase
Estimated as Percent in Output,
Unit Planned Actual of Plan 1249 to 1955
Electric power
Billion kwh
19.3
17.7
92
113
Hard coal
Million nit
100
94.5
94
28
Brown coal
Million nit
8.4
6.0
71
30
Crude oil
Thousand nit
394
100
46
ao
Pig iron
Million nit
3.50
3.10
09
138
Crude steel
Million nit
4.60
4.43
96
93
Zinc
Thousand nit
193
156
79
44
Sulfuric acid
Thousand nit
540
450
83
63
Caustic soda
Thousand nit
162
97.6
60
.65
Nitrogen and phos-
phorous fertilizer
Thousand nit
431
233
59
91
Cement
Million nit
5.0
3.0
76
63
Bricks
Billions
3.8
3.1
32
158
Freight cars
Thousands 2/
10.8
16.0
85
-5
Tractors
Thousands
11.0
3.0
73
220
Trucks
Thousands
25.0
12.5
50
5,100
Cotton fabrics
Million linear
meters
603
565
93
39
Wool fabrics
Million linear
meters
74.9
75.7
lol
51
Silk fabrics
Million linear
meters
104
04.5
81
77
Leather footwear
Million pairs
22.2
24.6
111
186
Sugar
Million nit
1.10
0.98
69
16
,
a. Standard-gauge freight ears in 2-axle equivalent units.
s?,
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'
to be1ive. Official indexes of the vol of industrial producti
to have a substantial upward bias.
0. Allocation of Resources to Industry.
Tab IPA shows the distribution of the ini2u&trial labor
force it 19 and 1954 and the growth of employment in. vidnal induetries
during the period. The i*etaUurgical, coflstruction materials, and: metal-
abricating industries had the largest
whereas textiles, leather,
growth of p ction with the
A comparison of the
of employment suggests
tput
per worker increased slowly in industries producing primarill baste materials
but Increased rapidly in ehemicals and the bricatingindustries,
where goods of increasing complexity were being produced. The highest
wages and wage increases were permitted in the key producer goods industries
as a mans of attracting labor or raising labor producttvlty. Workers
in t s
oh as textiles,
nctiv
1910 level and thus considerably
Investaente and.
es.
bly ed a decline
in coal mines in 1955 was at about the
lave s, in spite
centives In the form ab
Apart from the fact that heavy industry received the
bulkof industrial investments, there is no infonsa
of Inves
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Six Year
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Table F.4
Employment in Principal Industries 2/ in Poland
1949 and 1954
Percentage
Thousands Increase
1949 2/ 1954 1949 to 1954
Coal mining 215 279 30
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a. Incliwiing private industry and handicrafts (including self-employed)'.
b. Data are from the US Bureau of the Census and source Y.
c. Industrial employment in March 1949 plus handicrafts employment in June 1948.
d. Annual averages.
2. Agriculture.
a. Production Trends.
Polish agricultural production increased by 18 percent
from 1949 to 1955, 'while the Six Year Plan bad called for an increase of
50 percent. Production in 1955 was only 4 percent above the exceptionally
good crop year of 1950. After a period of stagnation (1951-53), favorable
weather during 1954 and 1955, combined with more liberal government policies
toward private farmers, raised production to approximately the prewar level.
SERI
p year of 1950. After a period of stagnation (1951-53), favorable
weather during 1954 and 1955, combined with more liberal government policies
toward private farmers, raised production to approximately the prewar level.
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aunt
'Crop production rose by leas than 10 percent from 1949
to 1955; the output of grains grew more slowly than this and that of
industrial crops faster. Wivestooknumbers increased significantly. In
the case of hogs, which are the pr
numbers rose 78 percent or more
however, led
e in
a
-ource of meat
Poland,
planned. An inadequatefodder base,.
ivity per animal and a growth in the
output of an:Una products of only 32 percent. The inability of grain pro-
duction to meet rising brea& and. fodder requirements has led to a tet
Import position on grain, lug the 1949-51 net export position.
b. Food Availabilities.
Per capita C.
in
Poland during the
19511./55 food consumption year was about 10 percent abOve the Prewar level
(partly as a res tion ) and also exc
level by a
his e
improvement in the qual
tr 0
d the 1948/49
di.x Table ). There wa SOW
during the plan period. Since
hot
increases in meat production were rouiy
the urban labor o
e to t
tion of persons aready living in urban
areas by 1949 probably did not increase. Workers moving to urban areas
S at has
the Polish urban diet than in the.
? probably obta
historically
rural
reasea supplies of neat,
much more inpor
C. Bola].
The aocialization of
Poland has e sed
very slowly in spite of continuous offic1a pressure. Collective farms,
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7
which iere insignificant in 1949, held.ytercen agrJ.cu1twa1 land in
1953 andif4'percent in 1955. State farms are more ortant, representing
9 Percent of agricultural land in 1949 and. 13 percent in 1955 (see Table
F.5). Very few of the state and eoUeotive farms are in the old Polish
lands
; Polish peasants have etrongly resisted. collecti tion.
ble 1-5
on of Agriculture
1949-55
Lt of
I u
nd
Tear
as of December)
Sta
1949
0.2
9.0
9.2
1950
2.1
10.9
13.0
1951
3.2
u.8
15.0
1952
4.8
12.0
16.8
1953
7.2
12.8
20.0
1954
8.6
12.5
21.1
1955
10.6
13.0
23.6
a. Agricultural Um" consists of arabia land plus
pastures.
d. investment said MenRower.
1949-53 per
hovever, and it we partly c
Inve ate
agricul
s. 10
investments in
ing the
d only 75 percent fulfillsent of the plan
cted. by a fall in private
e 1953,. an increase of
resent isoff'
The water of tractors available to
end of 1955 vas a.matrneed to be 56,
centralised
ba
the
69 percent of the
SERE'
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SrAt,;
Six Year Ian goal -- and deliveries of other types of agricultural machinery
Appear to have lagged evenuore. The following tabulation shows the growth
of the tractor park during the 1949-55period:
Tractor Park 1
Uni4
1949
18,019
1950
22,800
1951
31,800
1952
39,200
1953
45,691
1954
51,303
1955
56,000
The reeea.
s on agriculture has led to a reversal of
the dowirwazd trend 1n the agricultural labor force. Agricultural labor
continues to be scarce, however, es cially in the western. territories,
which are incompletely settled.
3. reign Trade.
Rapid
lization created subs
in the
pattern of Polish foreign trade. In general, It led to a rapid growth of
imports of machinery and of heavy industrial materials,h which Poland
Is poorly endowed, for examile, pe
fertilizer. At the same ti
considerable reduction in
such goods as coal
products. In the case of c
rn 'et and phosphorous
essure of dome
tio of exports
led to a
domestic pr 'On for
caustic soda, soda. ash,and rolled steel
absolute decline in exports.
Poland's moat important and most salable exports increased. slowly or not
at all, while,the portion of her imports which were tied to the industrialization
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program were growing rapidly. Consequently, other imports, representing ,
mostly fibers and foods, bad to be reduced. Exports of mcbiner3r and.
equipment In
eased very rapidly but have only recently be
source of foreign currency.
the trade s
The, effect of. "new co '" polietea to, cl
*portant
leeted in
55. pi of teztfle fabrics declined,
while imports or light industrial i1teria:s recovered to the 1949 level
and imports, of foods trp1ed.. in this :
consumer g0ods re intre ed. These changes, however, did not fundamentally
alter the trade pattern eatabiihed as a ?
merit program. Thble en,
of impnts and. exports by major product group in 1
Poland still depended on coal and coke for nearly
domestic avai biities of
the industrtal p-
n of the value
9 55. In 1955,
its
earnings. Machinery and equipment represented 3 percent of ports, coo-
pared. to 2.4 percent in 19119. The share of machinery d raw materials for
heay 5.nthistry in total imports rose from. 42 percent in 1949 to 51 percent
In 1955, while the s of raw materials for light induatry fell from
36 percent to 24 percent.
The growth of imports and exports in certain eategories during
the Six Year Plan is indicated
lation of these off ic
le P-7. Although the basis of caleu-
s is not known,
and consistent with the data on imports and
in relative
ble
P-
tud.en are reasonable
of individual commodi-
with the USSR has declined recently
ei but the USSR is still Poland's leading tradieg.
partner by a wide margin. The neighboring Satellites of East Germany and
fq,CRET
4/6.?
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atudi
Tabl. /1-6
Imports and Riporta of ?Oland by Product Groups 4ge
1949 and 1953450
Percent of Total
1949 1212 1954 1955
Imports
blectrical and power :-..ehinsto and
installations
5.0
6.2
4.7
Transport .quipment
645
6.3
5.0
blectrical and power :-..ehinsto and
installations 5.0 6.2 4.7
Transport .quipment 645 6.3 5.0
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3.4 3.5 4.2 4.7
Raw materials for heavy industry 17.5 19.8 19.8 20.4
as. materials for light industry 35.8 22.3 23.0 23.7
Supplies for agriculture 4.7 4.3 3.6 2.9
Agricultural consumer goods 11.4 6.7 13.5 13.1
Industrial consumer goods 2.8 2.7 _2t1 1412
Total 100 100 100 100
Mports
Machines, installations, and transport eqoipment 2.4 12.3 1141 1341
Of which: Land transport equipment 0.7 7.3 6.3 5,4
Marine transport equipment 0.4 3.1 2.9 4.0
Rax materials 68.7 57.8 61.6 64.4
Of which: Coal and coke 47.8 38.0 44.6 46.6
Iron and sine 9.7 9.9 7.8 8.0
Chemicals 3.6 240 2.6 3.1
Wood and paper 3.5 3.9 3.8 3.7
ask
Agricultuas consumer goods 19.8 20.3 la.o 15.3
Industrial consumer goods 9.1 9.6 2,2 7.2
Total 100 100 100 100
SALT
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Czechoslovakia rank next in inportartce. Trade with
a. larger part of Polandt a turnover- in 1955 than trade with several of the
other Sate11tes or any country of western. Zurope other than the UK (see
Table F--9)..
Indexes of
s and Exports of Poland by Selected *duet Oroup
1949 and 1953-55
.47,953
Machinery and equipment 100 2014
Materials for heavy industry 100 138
Materials for Ii lit industry 100 77
Agricultural products (including
foodstuffs) 100 98
Machinery and equipment 100 706
Materials for heavy industry 100 110
Agricultural products (including
foodstuffs)
Like ost rapidly
ienced a chronic Shortage of
Ui. sifts greatly aided the
triliz
eiu e c
Year P
100
1955
.122.1!
190
3.86
162
165
92
100
658
816
126
135
136 128
tries, Poland has exper-
g the postwar period.
reconstruction. After the
ceseatifl of UNKFtA, aid the recovery of agricultural rndction contInued
to
S
export ave
a and redue import rejj:freflta until about
1950. The 1951-53 per lcd was one of maximum. baI.,Leeof-payrnants pressure
because of the rapi4ly growing dds of domestic industry and the atagna
tion of
tare. Imports of low priority such as cousumsr-?riented goods
fell sharply. The. foreign exchange shortage was relieved someWhat by the
SECRET
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Table F-8
Foreign Trade in Selected Commodities
1949 and 1955
olande_i
Imports
Crude petroleum
Petroleum products
Iron ore'
Volume of Trade
Trade as
Percent of
Production
Unit
1949
1955
1949
1955
Thousand metric tons
Thousand metric tons
Million metric tons
91.5
255
1.6
545
886
4.4
61
111
380 12/
303
94
344 y
Nitrogen fertilizer
Thousand metric tons
35.8
56.4
48
37
Phosphorous fertilizer
Thousand metric toms
387
522
526
402
Wheat and rye
Thousand metric tons
165
1,154
2
14
Cotton
Thousand metric tons
98.3
95.2
s/
.5./
Woo0P
Thousand metric tons
15.4
16.3
733
170
Exports
Bard coal
Million metric tons
26.3
24.3
35
26
Coke
Million metric tons
1.85
2.24
31
21
Caustic soda and soda ash
Thousand metric tons
54.7
51.8
19
16
Cement
Thousand metric tons
506
674
22
18
Rolled steel products
Thousand metric toms
162
247
11
8
Lumber
Thousand cubic meters
697
915
5
6
Cotton fabrics
Million linear meters
50.5
57.5
12
10
Wool fabrics
Million linear meters
5.9
5.8
12
8
Sugar
Thousand metric tons
184
372
22
38
Meat and meat products
Thousand metric tons
26
71
5
9
. Trade data are from source 1
b. On a comparable iron-content basis. The iron-contents of domestic ores and imported
ores are estimated roughly as 30 percent and 50 percent, respectively.
c. Poland's production of cotton is negligible or zero.
iZe
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Table F-9
Geographic ribution of the Foreign Trade
Turnover st Poland
19544055
Percent of Total
1954
1955
Sino-Soviet Bloc a/
70.0
63.3
USSR
37.6
32.1
EUropean Satellites
28.6
27.4
Bulgaria
1.3
0.9
Cs achoslovakta
8.9
8.4
East Germany
14.1
130
Hungary
3.0
3.1
Rumania
1.3
1.3
Communist Chins
3.8
3.8
Other European Countries
21.2
26.2
Of which: Austria
2.2
2.5
Finland
2.3
2.6
France
2.1
2.6
United Kingdom
5.2
6.5
West Germany
1.9
2.9
Asia excepting Communist China
2.2
3.2
Other areas
6.6
7.3
?7;t1
Aif-dAttek
a. Exc1uding4Communist Korea and Vietnam.
cCRET
112
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high prices paid for Polish coal in the West during t of the
period and by Soviet credits for the purchaseof equipment. These advan-
tages were partly offset, however, by the
exports to the USSR. In terms of
es paid for Polish coal
exports increased faster t
imports during this period. During the nnew ten,expoita a
have Increased
ly to pay for
adeliti
consumer
1
goods. Prom 1953 to 1935, the value of imports grey by 630 miUlon rubles
and the value of exports by only 255 7011 ion rub
conclusions cannot be drawn without substantially more knowledge of the
methods of valuing Polish foreign trade7 it seems prob
used up its foreign currency re erves Or credits to ft
programs.
58
B.
ble that Poland has.
'new course"
h ralirosds attained. a large increase in traffIc (about
e of
facilities. Vexy litte. ele ritication ai4 dieselization has
1949 to 1955,
taken place up to now, however,
has caused.
tion of r_
sea transport grew much ? mare rapidly than raIlroad.
for only about a q
On-kilometer
of ?
creased. traffic
and
rt, they account
carriedin 1955.
Clnieaticrna services also increased. rapidly. The, eom.cattons. network
is believed to adequate for present needs.
Construction actIvityrepre a large, pear the value of
ixweent and may therefore be
d to have increased about
tions vibitia-fmaztove.)? Although
CRET
ropar-?
construction
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SPI:TEr
increased rapidly, it did not keep pp vith the growth of the urban labor
force and was generally of very poor, quality.
The rapid growth of retail trade (see Table F-10) reflects in
large part the process of urbanization. EMployment in education, health,
and other state services has grown rapidly, as have the number of students
in schools and the nuAber of hospital beds. Private services have slowly
declined in volume since 1950 and are now of small importance.
Table P-10
Retail Trade Turnover in Poland. gj
1949-55
Value of Retail Sales 2/
(Billion 1953 Zlotys)
Index of 'Dotal
Retail Salts
(1949 7. 100)
Private
Socialist
Total
1949
36.5
46.5
83.0
100
1950
16.0
79.0
95.0
114.4
1951
7.0
93.0
100.0
120.5
1952
5.0
96.0
101.0
121.7
1953
4.2
102.3
106.5
128.3
1954
5.0
120.7
125.7
151.4
1955
5.6
134.0
139.6
168.2
a. Includes sales of public catering establishments.
VET
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VII. Rumania.
A. General Policy and Achievements.
Rumania was still a comparatively underdeveloped country at the end
of the war, when the Communists gained control. About
474.J
of the
population was dependent on agriculture, befere=thm7lic4, and the living
standard was one of the lowest in Europe. The Communist regime has attempted
to develop the economy throvgh industrial development and agricultural reform.
As a result, most of the large estates were broken up, but the largest ones
were converted into state farms ithich were to serve as models of agricultural
production. Industrial development was promoted within e framework of the
Soviet-Rumanian joint stock cappanies (Sovroms), which were established in
the spring of 1945. The Sovroms included a wide variety of nonagricultural
enterprises. Consequently, there was a large degree of state ownership in
the economy long before nationalization was undertaken officially in June 1948.
Nationalization of productive facilities was followed by the intro-
duction of national economic plans, consisting first of annual plans for
1949 and 1950 and more recently of five Year plans for 1951-55 and 1956-60.
Although these plans have had the usual aim of general development of a heavy
industrial base, particular attention has been given to the exploitation of
the country's principal mineral resource -- petroleum. Production of crude
oil increased considerably during the First Five Year Plan and is somewhat
larger than before the var. Output before the war was concentrated very
largely in Ploesti, but this area has declined in importance as other areas
have been developed.
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at.blit I
First ?lye Year Plan, BUmania's gross national product
increased an estimated 50 percent and substantial progress was made in the
effort to industrialize the economy. Heavy investment in industry contributed
to an increase in industrial production of about three4ourths during the plan
period. !Producer goods output increased even more, according to intelligence
estimates, While conawner goods output probably ros?y about 50 percent
Table G.1). Agric
prewar
tionhas generally lagged behind the
omplishment. A substantial improvement was registered in 1955,
ho waver, as a result of arable weatherand expansion of the cultivated
area.
Table 0-1
Irldexes of Estimated Grose National Product and Produc
in Selected Economic SecI2re in Rumania
1938 and. 1948A05
1? 0 100
Oross national product
Industry
Producer goods
Consumer goods
Agriculture
1938 ?2ie .1949, 1250 2211 2222 .195,3 2254 1955
1)3
79
74
84
87 91 loo 111 In 123 134 150
79. 86 100 116 132 146 156 178
63 82 100 123 145 167 173 201
80 91 100 108 116 122 136 151
106 100 100 112 97 106 121 148
B. Economic Plans.
1. pne Plans for 1P4?75Q.
2he rst Rumanian economic plans were relatively simple and
unambitious one year plans for 199 end 1950. The major goal of a rapid
recovery of industry apparently s
ev
According to offcisi claims,
Industrial production in 1949 and 1950 increased by about 4o percent and:
37 percent, respectively, over the preceding years. 1/ On the other hand, agri-
cultural production remained well below the prewar level, primarily because of
the low level of investment. , SERFT
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37
In 1949, heavy industry received, IV percent of total t-
=cut; light and food industries, 10 percent; 'transport and te1econ.catione,
21 percent; social cultuxml activities, U percent; id aviculture
in
the 1950 plan e similarly allocated, except that agriculture received
and forestry only 9 percen
.e The 'funds available
larger share L5
foreign trade vas dast,icai
expedite col 1ct
d 1950 plans.
Trade turnover vith the countries whicii n ? ae up the. Soviet Bloc increased
from 23 percent
ization,, .
1938 to 83 percent 1950.
55.
The main goals of
vera Ere
coUectivizstOn and me tion of aviculture and
expansion of the state and cooperative
one year plane, about one-half of lanned total
most of it to, bew;7
The goals for gross
were
planners increased the gOals
? .1 Oittot ?
As in
t was
a
. Investment in agricititure
ler share of total outlays than pre lonely
al prodnetion in 1951 and. 1952
are and
CC,
-ttaining
plan, s beginning to outstrip its
for
meet its goals for 1952 and 1953, and this def ciency a4vesely affected
limited base of raw materials.
ci
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the growth of steel and eleetiic power production. Secondly, the govern-
mut' s In
effect on labor productivity. These problems vere aggravated by the
cOneximer
had beom to have an unfavorable
subnormal harvests of food crops in 1952 and 1953. AS a e.
1953 plan for ndustrial output sould not have
target had: not been lovere aubstantiaUr. Th
grew o lit per ?-
..Y./
previous year.,, This deCline. rebably iias one of the principal. considera
3 comPared
se of 23 p
sequence, the
ed if ?
tndstry
.444
t4 the
ns undelying the "new courae sxdif cation 14 economic policy in the
ter part of 1953.
The 'new couree also called for an increase in
national income tUstrib
.e
Ion fund,. which ?d.44' 4-Ledo-ow
sconegoerrimeutal outlays for defense as well as private cone
be in
rom 62
national income. Capital 1nves12entsagri
to i.ncrase sharply. The original 1953 plan
total capital 1nveset to agriculture, but this stt e
Ca
72 percent of the.
16.4percent in 1955% Capital invesbnents in
large-scale pro,
e to be reduced.
he DanubeBlak
7.2 percent of
the Btstrita-Bicaz bydroelectric complex, and the Roman
to redress
s either halted
The plan r "new
sive disport ions
ler
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Ac
a cis
Lad. arisen
stew?
such
sUbway,
steel
igned
the first
Mania
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OLUisim
part of the Five Year Plan. These revisions were partly disregarded
however,. and the ac
ation of limes
followed much the same pattern as in
ing the new course"
er years. The share
industry in total inveetinent eiceeded the very high
schedule- for 19514 le the Share the cunsurn
fell below the orinimal plan (see,Table
Table
the original
goods in
tr tea
ion of Capital Investment in Rumania
e First Five Year Plan
1951-55
Pienneci
f.1
Industry
Producer goods
Coruntmer goo da
Vey*
gina14/ Re
51.4
9.3
48.2
34,1
14.1
58.0
50.6.
7.4
Agriculture and forestry
10.0
13.1
1044
Transportation and communieations
16.2
16.2
Construction industry
2.0
2.2
4.6
Social and cultural projects
13.4
15.2
N.A.)
Of which: Workers' dwellings
3.2
5.2
3.8
15.8
,0ther
7.0
54
N.A.)
Total
100
100
With the .
ion of cru.de oil
materiala in 1955 failed to meet the
ow Plan. Only in a few
basic materials,
S.
of major industrial
Is set dem in the origirtFive
ts in the
al building materials, and food indu ies tul&Ued
.Coal, pig iron, steel, .and
Is .-e
as were the five
more than 70 percent. The 1955 outputs
-nt for example, were yell be
A general overfulf .
? the or
goals was
basis of the reduced goals adopted during
SECRET
BQ
e regime, however, the
? course-55..
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uu
labia 0.,3
Planned and ActualOutut of Selected Products in Thaia
1950 and 1955
1
Output
tea s igina in 1955
tual Output Planned Outputs, as Percent
1959 1221
Coal (all types
3.9
Crude oil
5.1
Pig iron
0.32
Crude steel
0.56
Finished stee
0446
Cement
1.0
Electric power
(billion kvb
6..2
/O4
-1:1-nr
0.58
0.76
0.57
2.0
4.3
195.5 of Plan
8.5 ';
10.0
73
106
0.8
72
1*25
61
0.83
69
2.9
69
91
?
rE; , the Ikon
tr
location by the beginning. of the Five Tear
. production INavis estimated to have been a
/114i, ?saiL
...e..-1938 and
damage and &is
1951* Andauv614-4.
-fourth above Aitasb.-
industry was expanded great4r
_meet reparation requirements until 1953,
and increments to output since then have served as a means of earning
foreign exchange, particularly hard currinc es. take total ndustrial
oil, pig iron, cement, in
1555 were roughly twice as high as in 1950. As in the ether Satellites,
these gains were aceoUehed by a sizable i se in the industrial labor
force and by iimitatXon of iweatnent in ether sectors of the economy*
prothieton outputs of electric powers
gains nemavicultural emplopuent did not, how
labor force in agrIculture, which still has a surp
ale
?
bly affect the
ter (see Tale 4)*
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Declassified in Part - Sanitized Copy Approved for Release 2013/10/29: CIA-RDP79R01012A009200010018-2
w.ovr.12.11
a.
Table G-4
Z. lasted Population and Labor Force in Rumania..
1948 and 1950.55
san
1950 1221.
? Population 15,980 16,370 16,570
?
Civilian labor force
.
9,320
9,870
Agricultural
7,120
2,700
Nonagricultural
2,200
7?/70
101020
7,070 7,010 7,000 7,000 7,040
2,9,0 3,270 3,3140
/952
1953
19514
155
16,800
17,020
17,230
17,430
10,130
10,200
10,270
10,380
Averages of eut1tes for the beginning and end of the year.
2. Agriculture.
a. Trends in Production and Availabiliti 4.
Agricultural policy during the First live 1ear Plan
Vall conditioned by the in ty of heavy inetuatry.iind by
the Communist do
As a res
lalization of agriculture.
s policy, agriculture did .not achieve very high
leve- of" output until the end of t.
The sUbstantial gain
in agricultural production in 1954 served Only
restzre
war level, but an s4dittonal large increasein 1955 pushed output
veil above the prewar acconp1iahnt. Output in 1955 nevertheless
vas considerably smaller than echeduled in the plan.
Cori
percent of the prewar average In
per capita droppiw to about
1952/53 consumption year, but
bee risen steadily since? then (see Appendix ab1e-5), The estimated
present caloric level of 2,500 calories per -day is still slightly under
ause of the smaller proportion
the prewar average of 2,600
of quality foods in ?
diet.
L2/
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Declassified in Part- Sanitized Copy Approved forRelease2013/10/29 : CIA-RDP79R01012A009200010018-2
btaiti
b. Manpower.
The labor force in agriculture changed little during
the Five Year Plan, and a shortage of farm labor does not appear to
be a serious problem as in same Satellites. About 7 million p4Ple
were employed in agriculture in 1955, representing about 70 percent
of the civilian labor force and 40 percent of the population.
c. Collectivization.
Socialization of Rumanian agriculture has been less
rapid than in most other Satellites. The holdings in the socialist
td, e i!t(
sector advanced from about Xhercent of the total arable land io#11950
:14
to over 26 percent at the end of 1955.nie "new course" policies
initiated in mid-1953 relaxed somewhat the earlier preseure on
farmers to join collectives. By the beginning of 1955: however,
the old doctrines were in operation again. Although the increase in
1955 in the amount of arable land under collectivization was relatively
modest because of the small size of the new collectives, the program
made notable gains on the organizational level. The number of
collective farms and agricultural associations increased from 4,968
in January, 1955 to 6,600 by the end of the year.'4 There was also
a mil of about 21 percent during the year in the number of farm
fannies& A4.4
3. Foreign Trade.
Ruaania's trade during the First Five Year Plan is
characterized by a steady growth in volume and by a general shift in
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Declassified in Part - Sanitized Copy Approved for Release 2013/10/29: CIA-RDP79R01012A009200010018-2
..V:cRET
A
it direction toward other Bloc countries. The value 0 ? Rumen
foreign 'trade rose from less t million in 1950 to
$870 million in 195511:About 80 percent of this trade
Bloc countries, compared with a ratio of about 23 percent in 1938.
Aithwjh Bloc countries offer a ready market for Rumanian exports,
es- eially oil and timber products, they have been unable to supply
all her needed imports.
in -1950 %Mali eXPOrted 70 percent of its production
of petroleum products, of which 97 percent vent to t Sino- Soviet
Bloc and 3 percent to the West. By 19551
73 percent
of the output of troleum products was exported, of vbieh. only 70'
percent went to. Batt countries. Petroleum exports accounted for at
least -AO percent of Burnarziats exports to non-Bloc countries in 1955
and were a
uable- source of badly needed foreign exchange.
SECRET
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Declassified in Part - Sanitized Copy Approved for Release 2013/10/29: CIA-RDP79R01012A009200010018-2
Appendix Table /
Dutput of 31iot.d Products in labanis and Bulcaria
Selected Tears
pi4icts
rift power
te end brown.t.
soal.
(ell types)
rude oii
Petroleum products
'Natural gas
and minisrele
rx ran
steel
)lamomos* ore
cot Bauxite
orcsil" Primary aluminum
it*Zined copper
Lead
LiNS
V
Chemicals
arid rubber
Safaris acid
Mei* said
7t** tic ameonis
Caustic sod*
Chlorine
3eda ash
Celsius earbide
Refinoa beasol
Nitrogen and piles;1crotie t
Synthetdo rubber
Nutiar tiros
*. 19,6,
o stt hours,
e tons
c tone
e tons -
c tons
e tens
C tons
Tboueand st,tc tons
1honsandrAs4044.4emo
C,.02 0.13
044 oi o
0
0
001, (421
0.43 0.13
0 0
O 0
O 0
O 0
0
0
$1i4b,
O 0
O 0
0.90 2.50
a
O 0
O 0
O C
0 C
O 0
0 o
0
0 0
c 0
O c c 30t.,
0
'44,1,
0
ki0
0
0
0
0
0
0
0
o
0
0
0
?;
0
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19
1.35 2.10
1.22 9.87
,38
0.02 0.02
O 0.16
O tok,e,lAzible
0
26
0
0
La 2,8
7*4 27,0-
3.6 ? 13.6
.1142
Ce,
re^ s
=1-0
rmrs
????
7.4
51.0
28.o
.2 aa
i*g33.jtb1 0 70
1$.4 26.0
*Ingalls hogligi 3.7
0
o0
o
0
4.5
0
0
0
0
0 '
12.5
60
0
40.0
6.0
0
23.''
0
et
BuiUing materials
Comsat
Bricks
Alchinery, eviipment,
Asehine tools
Trucks
Tractors
Aoinline loca.lotives
freight oars (2-axle oqi
Passenger automobiles
laritime vessels
Fishing vessels
-nland Teasels/ non-self prepelled
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Ps
tarysnd tams
Armored fignting
11 arms
munition
cd and industrial crops
Shoat
ftrs
Barley
Oats
Cern
Potstoes
bagar bests
wool (grease basis)
Lumber
?; 1*._
afp. /no-- cukt4r LIC 4 itt