ECONOMIC CONDITIONS IN THE EUROPEAN SATELLITES 1954-55

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01093A001100030001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 186
• Document Creation Date: November 9, 2016
• Document Release Date: July 9, 1999
• Sequence Number: 1
• Publication Date: April 23, 1956
• Content Type: IR

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PROVISIONAL INTELLIGENCE REPORT
ECONOMIC CONDITIONS
IN THE EUROPEAN SATELLITES
1954 - 55
CIA/RR PR-139
23 April 1956
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
DOCUMENT NO. _! -
IN CLASS. 1_I
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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S-E-C-R-E-T
PROVISIONAL INTELLIGENCE REPORT
ECONOMIC CONDITIONS IN THE EUROPEAN SATELLITES
1954-55
CIA/RR PR-139
(ORR Project 16.4+49)
NOTICE
The data and conclusions contained in this report
do not necessarily represent the final position of
ORR and should be regarded as provisional only and
subject to revision. Comments and data which may
be available to the user are solicited.
Office of Research and Reports
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FOREWORD
This report is for the most part a review of economic conditions
in the European Satellites in 1954, together with an analysis of the
published economic plans and state budgets for 1955? It extends by
1 year much of the discussion and series of data which were published
in a previous survey, CIA/RR PR-99, Economic Conditions in the Euro-
pean Satellites, 11 February 1955, SUS ONLY. In addition to sections
on trends in gross national product, agriculture, consumer welfare,
and foreign economic relations, the present report contains some back-
ground material on the resource base of the Satellite economies and
on the problems and prospects of selected industries and the trans-
portation and communications systems.
Like PR-99, this report is a minor revision of material submitted
to the Office of National Estimates as the ORR contribution to the
annual National Intelligence Estimate for the European Satellites.
The term European Satellites as used herein includes Albania, Bulgaria,
Czechoslovakia, East Germany, Hungary, Poland, and Rumania.
t
S -E -C -R -E-T
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CONTENTS
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
I. Economic Plans and Policies . . . . . . . . . . . . . . . . 6
A. General Survey . . . . . . . . . . . . . . . . . . . . . 6
B. Czechoslovakia . . . . . . . . . . . . . . . . . . . . . 9
1. Economic Plan for 1955 . . . . . . . . . . . . . . . 9
2. Trends in the State Budget . . . . . . . . . . . . . 12
3. Trends in Economic Policy . . . . . . . . . . . . . 14
C. East Germany . . . . . . . . . . . . . . . ? . . . . . . 15
1. Economic Plan for 1955 . . . . . . . . . . . . . . . 15
2. Trends in the State Budget . . . . . . . . . . . . . 16
3. Trends in Economic Policy . . . . . . . . . . . . . 17
D. Hungary . . . . . . . . . . . . . . . . . . . . . . . . 20
1. Economic Plan for 1955 . . . . . . . . . . . . . . . 20
2. Trends in the State Budget . . . . . . . . . . . . . 22
3. Trends in Economic Policy . . . . . . . . . . . . . 25
E. Poland . . . . . . . . . . . . . . . . . . . . . . . . . 27
1. Introduction . . . . . . . . . . . . . . . . . . . . 27
2. Economic Plan for 1955 . . . . . . . . . . . . . . . 27
3. Trends in the State Budget . . . . . . . . . . . . . 29
F. Rumania . . . . . . . . . . . . . . . . . . . . . . . . 31
1. Economic Plan for 1955 . . . . . . . . . . . . . . . 31
2. Trends in the State Budget . . . . . . . . . . . . . 32
3. Trends in Economic Policy . . . . . . . . . . . . . 36
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G. Bulgaria . . . . . . . . . . . . . . . . . . . . . . . 36
1. Economic Plan for 1955 . . . . . . . . . . . . . . .36
2. Trends in the State Budget . ... . . . . . . . . . . 38
H. Albania . . . . . . . . . . . . . . . . . . . . . . 39
1. Economic Plan for 1955 . . . . . . . . . . . . . . . 39
2. State Budget for 1955 . . . . . . . . . . . . . . . 39
II. Resource Base of the Economies . . . . . . . . . . . . . . . 40
A. Population and Labor Force . . . . . . . . . . . . . . . 40
1. Total Population . . . . . . . . . . . . . . . . 40
2. -Labor Force . . . . . . . . . . . . . . . . . . . . 41
a. Total Labor Force . . . . . . . . . . . . . 41
b. Agricultural and Nonagricultural Labor Force 43
B. Land Resources and Utilization . . . . . . . . . . . 43
C. Fuels . . . . . . . . . . . . . . . . . . . . . . 46
1. Coal . . . . . . . . . . . . . . . . . . . . . 46
2. Petroleum . . . . . . . . . . . . . . . . . . . . . 47
D. Minerals . . . . . . . . . . . . . . . . . . . . . . . 49
1. Irpn Ore . . . . . . . . . . . . . . . . . ... . 49
2. Manganese . . . . . . . . . . . . . . . . . . . . . 50
3. Copper . . . . . . . . . . . . . . . . . . . -51
4. Lead and Zinc . . . . . . . . . . . . . . . . . . . 51
5. Bauxite . . .. . . . . . . . . . . . . . 52
6. Antimony . . . . . . . . . . . . . . . . . . . . 52
7. Other Minerals . . . . . . . . . . . . . . . . . 53
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III. Trends in Gross National Product and Its Components . . . . 54
A. Comparison of the Gross National Products of the European
Satellites and the USSR . . . . . . . . . . . . . . . . 54+
B. Distribution of Gross National Product by Country . . . 55
C. Comparisons of Prewar and Postwar Gross National
Products . . . . . . . . . . . . . . . . . . . . . . . 57
D. Gross National Product Per Capita . . . . . . . . 58
E. Distribution of Gross National Product by Sector
of Origin . . . . . . . . . . . . . . . . . . . . . 60
IV. Survey of Subsectors of Industry . . . . . . . . . . . . . . 61
A. Energy . . . . . . . . . . . . . . . . . . . . . . . . . 61
1. Electric Power . . . . . . . . . . . . . . . . 61
2. Coal . . . . . . . . . . . . . . . . . . . . . . . . 62
3. Petroleum . . . . . . . . . . . . . . . . . . . . . 63
B. Metals . . . . . . . . . . . . . . . . . . . . . . . . . 64+
1. Iron and Steel . . . . . . . . . . . . . . . . . . . 64
2. Copper, Lead, and Zinc . . . . . . . . . . . . . . . 65
3. Aluminum . . . . 65
4+. Tin and Antimony . . . . . . . . . . . . . . . . . . 65
C. Machinery and Equipment . . . . . . . . . . . . . . . . 66
1. Motor Vehicles and Tractors . . . . . . . . . . . 66
2. Railroad Equipment . . . . . . . . . . . . . . . . . 67
3. Shipbuilding . . . . . . . . . . . . . . . . . . . . 68
4+. Antifriction Bearings . . . . . . . . . . . 69
5. Machine Tools . . . . . . . . . . . . . . . . . . . 69
6. Electrical and Electronic Equipment . . . . . . . . 70
D. Chemicals . . . . . . . . . . . . . . . . . . . . . . . 70
E. Building Materials . . . . . . . . . . . . . . . . . . 72
F. Forest Products . . . . . . . . . . . . . . . . . . . . 72
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G. Processed Foods . . . . . . . .. . . . . . . . . . . . . 73
H. Light and Textile Industry . .. . . . . . . . . . . . . 73
I. Military End Items . . . . . .. . . . . . . . . . . . . 74
1. Ground Ordnance . . . . . .. . . . . . . . . . . . . 74
2. Aircraft . . . . . . . . .. . . . . . . . . . . . . 75
V. Agricultural-Problems and Production . . . . . . . . . . . 75
A. Problems . . . . . . . . . .. . . . . . . . . . . . . 76
B. Production . . . . . . . . . .. . . . . . . . . . . . 77
VI. Transportation and Communications .. . . . . . . . . . . . . 80
A. Transportation . . . . . ? . . . . . . . . . . . . 80
B. Communications .. . . . . . . .. . . . . . . . . . . . . 85
1. Telephone-and Telegraph . .. . . . . . . . . . . . . 85
2. Radiobr oadc ast ing . . . . .. . . . . . . . . . . . . 87
3. Television . . . . . . . .. . . . . . . . . . . . . 89
VII. Consumer Welfare . . . . . . . . .. . . . . . . . . . . . . 89
A. Availability of Foodstuffs . . . . . . . . . . . . . 90
B. -Availability of Consumer Goods Other Than Foodstuff-s . 90
G. Housing . . . . . . . . . . . . . . . . . . . . . . 94
D. Services . . . . . . . . . . . . . . . . . . . . . . 96
VIII. Foreign Economic Relations . . . . . . . . . . . . . . . . 96
A. Value of -Foreign Trade . . . . . . . . . . . . . . . . 98
B. Geographic Distribution of Trade . . . . . . . . . . . 101
1. Distribution of Trade within the Sino-Soviet Bloc . 104
2. Distribution of Trade with Non-Bloc Countries . . . l06
C. Commodity Composition of Trade . . . . . . . . . . 110
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1. Commodity Pattern of Intra-Bloc Trade . . . . . . . 111
a. Trade in Machinery and Equipment . . . . 112
b. Trade in Crude Materials and Semifinished
Goods . . . . . . . . . . . . . 113
c. Trade in Fuels . ? . . . . . . . 114
d. Trade in Foodstuffs and Consumer Goods . . . . . 115
2. Commodity Pattern of Trade with Non-Bloc Countries 116
D. Economic Interdependence and Plan Coordination . . . . . 117
1. Interdependence of the Economies . . . . . . . 117
2. Soviet Control of the Satellite Economies . . . . . 119
3. Coordination of Economic Plans . . . . . . . . . . . 119
Appendixes
Appendix A. Statistical Tables . . . . . . . . . . . . . . . . 121
Appendix B. Illustrations . . . . . . . 137
. . . . . . . . . . .
Appendix C. Methodology . . . . . . . . . . . . . . . . 139
Appendix D. Gaps in Intelligence . . . . . . . . . . . . . . . 143
Appendix E. Source References . . . . . . . . . . . . . . . . . 145
1. Growth of Industrial Production in Czechoslovakia, 1949-54
and 1955 Plan . . . . . . . . . . . . . . . . . . . . . . 10
2. Planned Revenues and Expenditures in the State Budget of
Czechoslovakia, 1953-55 . . . . . . . . 12
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3. State Investment in Czechoslovakia, 1949-54 . . . . . . . . 13
4. Planned Expenditures in the State Budget of East Germany, 17
1952-55 . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Growth of Industrial Production in Hungary, 1950-54 20
and 1955 Plan . . . . . . . . . . . . . . . . . . . . .
6. Revenues and Expenditures in the State Budget of Hungary,? 23
1953-55 . . . . . . . . . . . . . . . . . . . . . . . .
7. Net Investment in the State Budget of Hungary, 1953-54 ? ? 24
8. Growth of Industrial Production in Poland, 1951-54 28
and 1955 Plan . . . . . . . . . . .. . . . . . . . . . . .
9. Planned Revenues-and Expenditures in the State Budget 30
of Poland, 1952-55 . . . . . . . . . . . . . . ' ' '
10. Planned and Actual Growth of Industrial Production 31
in Rumania, 1951-54 . . . . . . . . . . . . . . . . . . .
11. Revenues and Expenditures in the State Budget of Rumania, 33
1952-55 . . . . . . . . . . . . . . . . . . . . . . . . . .
12. PlannedExpenditures in the State Budget of Rumania, 34
1952-55 . . . . . . . . . . . . . . . . . . . . . . . . .
13. Growth of Industrial Production in :Bulgaria, 1951-54 37
and 1955 Plan . . . . . . . . . . . . . . . . . . . . . .
14. Revenues and Expenditures in the State Budget of Bulgaria, 38
1952-55 . . . . . . . . . . . . . . . . . . . . . . . .
15. Revenues and Expenditures in the State Budget of Albania, 40
1954-55 . . . . . . . . . . . . . . . . . . . . . . . . .
16. Population of the European Satellites, Midyear 1948, 1950, 47
and 1952-54 . . . . . . . . . . . . . . . . . . . . . . . .
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17.
Labor Force of the European Satellites, midyear 1948, 1950,
and 1952-54 . . . . . . . . . . . . . . . . . . . . . . . .
42
18.
Agricultural and Nonagricultural Labor Force of the Euro-
pean Satellites, Midyear 1948, 1950, and 1952-54 . . . .
44
19.
Distribution of Land Resources in the European Satellites,
About 1950 . . . . . . . . . . . . . . . . . . . .
45
20.
Estimated Agricultural Lands Not Now Tilled in the European %
Satellites . . . . . . . . . . . . . . . . . . . . . . . .
46
21.
Estimated Amounts and Approximate Life of Reserves of Coal
in the European Satellites, 1954 . . . . . . . . . . . .
47
22.
Estimated Reserves of Crude Petroleum in the European Satel-
lites and the USSR, 1954 . . . . . . . . . . . . . . .
48
23.
Estimated Reserves of Iron Ore in the European Satellites,
1954
50
24.
Principal Reserves of Copper in East Germany, 1951,
and Poland, 1955 . . . . . . . . . . . . . . . . . . . . .
52
25.
Estimated Reserves of Pyrites in the European Satellites,
1954 ...........................
53
26.
Comparison of the Gross National Product of the European
Satellites and the USSR, 1938, 1948, and 1954 . . . . . . .
56
27.
Gross National Products of-the European Satellites, 1938,
1948, and 1954 . . . . . . . . . . . . . . . . . . . . . .
56
28.
Changes in the Gross National Products of the European
Satellites, the USSR, France, West Germany, and Italy,
1938-48 and 1938-54 . . . . . . . . . . . . . . . . . . . .
58
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29. Per Capita Gross National Products of the European Satel-
lites, 1938, 1948, and 1954 . . . . . . . . . . . . . . . . 60
30. Indexes of Agricultural Production in the European Satel-
lites, 1938 and 1948-54 . . . . . . . . . . . . . . . . . .
78
31. Indexes of Production of Selected Field Crops and of Live-
stock Numbers in the European Satellites, 1954 . . . . . . 79
32. Freight Traffic in the European Satellites, 1938
and 1948 - 5 4 . . . . . . . . . . . . . . . . . . . . . . . 82
33. Characteristics of Selected Transport Facilities in the
European Satellites, 1955 . . . . . . . . . . . . . . . 84
34. Number of Telephone Subscribers, Number of Telegraph Offices,
and Kilometers of Communications Wire in the European Satel-
lites, 1950 and 1954 . . . . . . . . . . . . . . . . . 86
35. Number of. Persons Per Telephone in the European Satellites,
1950 and 1954 . . . . . . . . . . . . . . . . . . . . . 87
36. Number of Radio Receivers and Wired Loudspeakers and Number
of Persons Per Radio Receiver and Wired Loudspeaker in the
European Satellites, 1950 and 1954 . . . . . . . . . . . . 88
37. Per Capita Production of Selected Agricultural Products
in the European Satellites, Prewar and 1954-. . . . . . . . 91
38. Average Daily Per Capita Caloric Consumption of Food in the
European Satellites, Prewar and 1952/53, 1953/54,
and 1954/55 . . . . . . . . . . . . . . . . . . . . . . . -92
39. Estimated Per Capita Consumption of Textile Fibers in the
European Satellites, Prewar and 1952-54 . . . . . . . . . . 93
40. Estimated Per Capita Production of Manufactured Footwear
in the European Satellites, Prewar and 1948-54 . . . . . . 94
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41. Ratio of the Increase in Population to the Number of New
Urban Dwelling Units in the European.Satellites,
1949-54 . . . . . . . . . . . . . . . . . . . . . . . . . 95
42. Standards of Health and Education in the European Satellites,
Prewar and Postwar . . . . . . . . . . . . . . . . . . . . 97
43. Trade Turnover of the European Satellites, 1953 . . . . . . 99
44. Trade Turnover as a Percent of Gross National Product in the
European Satellites and Other Selected Countries, 1951 . . 100
45. Geographic Distribution of the Trade Turnover of the Euro-
pean Satellites, 1936-38 and 1948-53 . . . . . . . . . . . 102
46. Geographic Distribution of the Trade Turnover of the Euro-
pean Satellites with the Rest of the Sino-Soviet Bloc,
1953 . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
47. Geographic-Distribution of the Total Trade Turnover of the
European Satellites with Non-Bloc Countries, 1953 . . . . . 107
48. Geographic Distribution of the Trade of the. European Satel-
lites with Non-Bloc Countries, 1948, 1952, and 1953 . . . . 108
49. Geographic Distribution of the Trade of the Individual
European Satellites with Non-Bloc Countries, 1948 and
1952-54 . . . . . . . . . . . . . . . . . . . . . . . . . . log
50. Indexes of Gross National Product and Production in Selected
Economic Sectors for the European Satellites, 1938 and
1948 - 5 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 121
51. Output of Selected Products in the European Satellites
and the USSR, 1954 . . . . . . . . . . . . . . . . . . . . 122
52. Geographic Distribution of the Trade Turnover of the European
Satellites, 1936-38 and 1948-53 . . . . . . . . . . . . . . 125
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53. Trade of the European Satellites with the Non-Bloc
Countries, 1948 and 1952-54 . . . . . . . . . . . . . . 129
54. Commodity Composition of Imports of the European Satel-
lites from Non-Bloc Countries, 1953 . . . . . . . . . . 131
55. Commodity Composition of Exports of the European Satel-
lites to Non-Bloc Countries, 1953 . . . . . . . . . . . 134
Illustrations
Following Page
Figure 1. European Satellites: Official Annual Rates of
Increase in Industrial Production, 1952-54,
and 1955 Plan . . . . . . . . . . . . . . . . . . 8
Figure 2. European Satellites: Distribution of Labor Force,
1948, 1950, and 1954 . . . . . . . . . . . . . . 44
Figure 3. European Satellites: Percentage Distribution of
Gross National Product, by Country, 1938, 1948,
and 1954 . . . . . . . . . .. . . . . . . . . . . 56
Figure 4. European Satellites: Percentage Distribution
of Gross National Product, by Sector of Origin,
1938, 1948, and 1954 . . . . . . . . . . . . . . 60
Figure 5. European Satellites: Distribution of Freight
Traffic, 1938 and 1954 . . . . . . . . . . . . 82
Figure 6. European Satellites: Indexes of Average Daily Per
Capita Caloric Consumption of Food, Prewar, 1952/53,
1953/54, and 1954/55 . . . . . . . . . . . . . .
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Figure 7. European Satellites: Geographical Distribution
of Trade Turnover, 1936-38 Average
and 1948-53 . . . . . . . . . . . . . . . . . .
102
Figure 8. European Satellites: Commodity Composition
of Imports from the West, 1953 . . . . . . . . .
116
Figure 9. European Satellites: Commodity Composition
of Exports to the West, 1953 . . . . . . . . . .
116
Figure 10. European Satellites: Percentage Distribution
of Output of Coal, 1954 . . . . . . . . . .
138
Figure 11. European Satellites: Percentage Distribution
of Output of Crude Oil and Refined Petroleum,
1954 . . . . . . . . . . . . . . . . . . . . . .
138
Figure 12. European Satellites: Percentage Distribution
of Output of Steel and Selected Nonferrous Metals,
1954 . . . . . . . . . . . . . . . . . . . . . .
138
Figure 13. European Satellites: Percentage Distribution
of Output of Automobiles, Trucks, and Tractors,
1954 . . . . . . . . . . . . . . . . . . . . . .
138
Figure 14. European Satellites: Percentage Distribution
of Output of Railroad Equipment and Shipbuilding,
195k . . . . . . . . . . . . . . . . . . . . . .
138
Figure 15. European Satellites: Percentage Distribution
of Output of Machine Tools and Antifriction
Bearings., 1954 . . . . . . . . . . . . . . . . .
138
Figure 16. European Satellites: Percentage Distribution
of Output of Selected Electrical and Electronic
Equipment, 1954 . . . . . . . . . . . . . . . .
138
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Figure 17. European Satellites: Percentage Distribution
of Output of Selected Chemicals, 1954 . . . . 138
Figure 18. European Satellites: Percentage Distribution
of Output of Cement, 1954 . . . . . . . . . . . 138
Figure 19. European Satellites: Percentage Distribution
of Output of Selected Military End Items,
1954 . . . . . . . . . . . . . . . . . . . . . . 138
Figure 20. European Satellites: Geographical Distribution
of Trade Turnover, 1936-38 Average
and 1948-53 . . . . . . . . . . . . . . . . 138
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CIA/RR PR-139 S-E-C-R-E-T
(ORR Project 16.449)
ECONOMIC CONDITIONS IN THE EUROPEAN SATELLITES*
195-55
Summary
The 1955 economic plans of the European Satellites indicated that the
"new course"** program introduced in 1953 was generally being continued
even though the development of heavy industry was again being stressed
by Satellite leaders. In most instances, data on planned investment and
production goals for 19.55 show a "new course" emphasis on industries pro-
ducing basic materials, electric power, and consumer goods and somewhat
less attention to the engineering industries than during the pre-1953
period. Higher rates of increase are planned for consumer goods output
than for producer goods output in several of the countries. Measures de-
signed to increase agricultural output are also prominent in Satellite
economic plans for 1955. In general, agriculture, the coal and power in-
dustries, and light industry are allocated larger shares of state invest-
ment funds, whereas investment in heavy industrial facilities is to make
up a smaller proportion of total investment than before the "new course."
In agriculture, as in other economic sectors, there appears to be some-
what less coercion and greater reliance on incentives than before the
"new course" in the effort to achieve national economic goals. The "new
course" policy of substantially increasing trade with the West as well
as with Soviet Bloc countries is also still very much in evidence.
Planned rates of industrial growth continue to be more modest than
during the period before 1953. Only Hungary and Czechoslovakia, the
Satellites which had the smallest increases in gross industrial produc-
tion in 1954, planned larger rates of growth for 1955 than were achieved
in 1954. The extension of the "new course" (with some modifications)
into 1955 undoubtedly reflects the course of economic developments in
1954.
* The estimates and conclusions contained in this report represent
the best judgment of ORR as of 15 November 1955.
** The "new course" program called for the expansion of the basic
materials and electric power industries and of light industry to
bring about a more balanced industrial structure, increased agri-
cultural output by means of higher investment expenditures and
further incentives to peasants, material improvement of living
standards, and increased foreign trade not only with Soviet Bloc
members but.also with the West.
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Taking into account both the tasks which the European Satellites
set for themselves in 1954 and the actual changes in economic condi-
tions since 1953, developments in these countries in 1954 may be
characterized as combining modest-successes with serious shortcomings.
There were, for example, further small improvements in living stand-
ards and some easing of the strains and bottlenecks which had developed
within the industrial sectors of the economies. The structural re-
adjustments in the industrial sector did not, however, prevent sharply
declining rates of industrial growth. Each Satellite has expanded its
industrial output rapidly since 1948, but the rates of industrial
growth have slackened markedly in recent years, and-particularly in
1954.
The agricultural stagnation of recent years also continued. There
has been no significant increase in total Satellite agricultural out-
put since 1950; such production thus has remained well below the prewar
achievement in all of the major countries. Attainment of two basic
Satellite goals in agriculture -- a significant expansion of output
and, even more important, a sizable increase in average output per
worker in order to release-labor to industry -- apparently will
require-considerably higher economic priorities than have been given
this sector in the past, including the period since the announcement
of the "new course" policies-in mid-1953.
In the industrial sectors of the economies, the scheduled realloca-
tion of investment expenditures in favor of the energy and basic mate-
rials industrieson theone hand and the consumer goods industries on
the other was c-arried out to a substantial degree, although such plans
were not realized completely. The proportion of total state invest-
ment which was allocated to heavy industry declined in most if not
all of the countries in 1954, and the absolute amount of such expend-
itures probably also declined in several of them. Investments in light
industry were maintained or slightly increased. The shift in invest-
ment priorities thus not only made possible small improvementsin
living standards but also brought the capacities of the energy and
industrial raw materials industries into better balance with engineer-
ing and heavy industrial plant facilities. Some of the European Sat-
ellites reported larger percentage gains in consumer goods output
than in producer goods output, but the latter continues to predominate
in the more industrialized countries. Moderate in extent as this
structural realignment in industry was, it appears to have had the
initial effect of ,contributing to the further decline in the rate of
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industrial growth in 1954. Only Poland was able to fulfill its initial
industrial production goal for the year, and in all seven countries the
announced percentage gains in output over the previous year were smaller
than in 1953. In Hungary and Czechoslovakia -- industrial countries
which were badly hampered by shortages of raw materials -- increases in
gross industrial production of only 3.1 and 4.4 percent, respectively,
were reported.
Because of the unavoidable time lags between investment decisions
and actual output, the expansion of the production of consumer goods
in 1954 was largely the result of fuller utilization of existing plant
capacity in light industry and the conversion to the production of
consumer goods of some plants or parts of plants in the engineering
and heavy industrial sectors. This procedure increased the production
of consumer goods appreciably in a relatively short space of time
following the "new course" announcements, but it had adverse short-run
effects on labor productivity. Consequently, the rate of industrial
growth for the European Satellites as a group would have fallen even
more sharply if the industrial labor force had not increased. The
price of this, however, was a small reduction in the agricultural
labor force despite the urgency of the "new course" agricultural
programs, whose realization in the short run required more rather
than less farm labor in at least some of the countries. Only in
Poland did the output per industrial worker increase by more than 4
percent in 1954, according to official statements. In Hungary, it
actually declined by 1.5 percent. Expectations by Satellite leaders
that the rise in living standards would promote a large rise in labor
productivity thus were not borne out.
A similar time lag exists in agriculture between the execution of
investment plans and the resulting increase in output. In addition,
the effects of higher rates of investment and of other government
policies designed to increase agricultural output may be obscured in
a given year by unfavorable weather conditions. Nevertheless, the
failure of the European Satellites to increase agricultural output
materially must be regarded as the most serious shortcoming in the
implementation of the "new course" in 1954. This failure occurred
despite large increases in agricultural investment, reflecting not
only the time lag and weather factors but the very low level of agri-
cultural investment before the "new course." Policies designed to
extend the cultivated area met with only limited success, and the
agricultural labor force of the area declined slightly despite an
estimated increase of 40,000 farm workers in Czechoslovakia.
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Total-Satellite production of agricultural commodities was about
the same in 1954 as in 1953. Because of unfavorable weather, grain
production fell by an estimated 5 to 13_percent in Czechoslovakia,
East Germany, and Hungary. Moreover, there were no significant in-
creases in livestock numbers for the area as a whole. On the other
hand, production of industrial crops and particularly of textile
fibers fared somewhat better than in 1953.
Turning to another aim of the "new course" -- that of improving
the living standard of the people -- it appears that in 1954, as in
1953, consumers benefited somewhat more than during any of?the years
immediately preceding the "new course."' Although the Satellite govern-
ments have adopted resource allocation policies somewhat more favorable
to consumption, the improvement in living standards possible during a
period of only 2 years is necessarily small. Only if these gains are
continued for several more years will some of the austerity of recent
years be removed and prewar standards of living be regained or ex-
ceeded.
Production of manufactured -consumer -goods, particularly the more
expensive types, has, however, increased considerably during the "new
course" and in most categories now exceeds the prewar levels. The
supply of educational, medical, and recreational services has also
been promoted, and likewise now probably surpasses prewar standards.
Investment in residential housing has been increased appreciably, but
the Satellites will not soon be able to make good the years of neglect
of housing construction. The least successful feature of the consumer
program in 1954 undoubtedly was the effort to increase food supplies.
For manypeople in the Satellites, the overriding fact concerning the
new course" very likely is that food supplies have not become more
plentiful. Despite a shift in over-all Satellite foreign trade to
net imports of grains and possibly of foodstuffs in general, food
consumption per person did not improve significantly in 1954, re-
maining below the prewar level for all of the countries except
Poland and Bulgaria. If the diet of the people had not also deteri-
orated qualitatively under the Communist regimes because of the
substitution of starchy foods for proteins, per -capita caloric con-
sumption of foods in 1954 would have been still lower.
The combined result of the trends noted above for industry and
agriculture, together with developments in the other sectors of the
economies, may be summed up in estimates of gross national product
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(GNP), the market value of the total output of goods and services. To-
tal Satellite GNP in 1954 was roughly $50 billion (at 1951 US
prices), amounting to about two-fifths of the Soviet GNP. The Sat-
ellite economies have grown rapidly since 1948, but the rate of increase
in GNP, like that of its most dynamic component -- industrial output --
has been declining. This slackening in the pace of Satellite economic
development generally paralleled that in the USSR, so that the ratio
between Satellite and Soviet GNP did not change materially from 1948
to 1954.
though comprehensive statistics for Satellite trade in 1954 are
et available, the value of Satellite trade with non-Bloc countries
apparently was greater in 1954 than in any year since 1951. The direc-
tion of Satellite trade has not, however, been altered fundamentally
since the introduction of the "new course" in 1953. About three-fourths
of trade turnover is accounted for by other Bloc countries, and the USSR
is by far the most important trading partner of each Satellite. Satel-
lite trade turnover of about US $6.5 billion in 1953, constituting about
5 percent of the total trade of the world, was roughly equal to that of
the USSR. The Satellites' dependence on foreign trade, as measured by
the ratio of trade turnover to GNP, was less than that of France, West
Germany, or Italy in 1953 but was considerably greater than that of
the USSR.
Although direct Soviet control over Satellite enterprises has been
reduced somewhat during the past 2 years, this reduction does not appear
to be particularly significant, because of the pervasive indirect controls
which are exercised by the USSR over Satellite economic development. The
extent of Soviet direction of Satellite economic policies has not lessened
in the post-Stalin era and may have increased slightly because of the
growing coordination activities of the Soviet-dominated international
organization, the Council for Economic Mutual Assistance (CEMA). Control
of Satellite policies probably has continued to be exerted primarily
through Party and governmental channels, however, as illustrated by
the country-by-country adoption of the "new course" during the latter
half of 1953. There is some evidence, on the other hand, that the USSR
has dictated or that various pairs of Satellites have agreed upon co-
ordinated production and investment plans for selected products or
industries through the medium of CEMA.
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S-E-C-R-E-T
I. Economic Plans and Policies.
A. General Survey.
Although leaders in the European Satellites have made numerous
statements during the past year about the importance of rapid indus-
trial (especially heavy industrial) growth, the national economic plans
and state budgets of the various countries do not show any substantial
changes in economic policy from that of 1951. The policies currently
being followed may therefore be characterized as generally continuing
the "new course" as it was carried out in 1951. The "new course"
program called for the expansion of the basic materials and -electric
power industries and of light industry to bring about a more balanced
industrial structure, increased agricultural output by means of'higher
investment expenditures and further incentives to peasants, material
improvement of living standards, and increased foreign trade not only
with Soviet Bloc members but also with the West. Some modifications
of these policies were evident in 1955, but most of these changes
are neither great in extent nor applicable to more than one or two of
the countries. It -should be noted, however, that although the eco-
nomic programs put into effect in 1951 departed somewhat from the
orthodox Communist economic policies followed until mid-1953, the
changes made were not so extensive as those outlined in the initial
"new course" announcements.
Official Satellite statistics* show a marked slackening in the
rates of industrial growth in recent years, and the economic plans for
* The discussion throughout this section is based on official Satellite
statistics or, in a few instances, on estimates derived directly from
such statistics. Plans for total industrial output in 1955 are -appraised
in terms of the officially announced gains in previous years in order to
insure a satisfactory degree of comparability in the data. These statis-
tics generally are not comparable to the indexes of industrial production
used in calculating the estimates of gross national product (GNP) in Sec-
tion III. (An exception is each country's index for 1951, which was cal-
culated on the basis of the officially announced rate of increase in
industrial production.) The official figure-s and the independently de-
termined CIA estimates for Section III differ in concepts of total in-
dustrial production and in the weights and statistical methods used in
aggregating the physical output data. Official Satellite statistics
relate to gross industrial production, for example, so that there is a
considerable amount of double-counting, whereas the CIA estimates repre-
sent an attempt to calculate only the value added in the industrial
sectors of the economies.
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1955 make it clear that the economic planners in several of the coun-
tries expected this slowdown in industrial growth to continue in 1955?
Czechoslovakia, East Germany, Hungary, Rumania, and Bulgaria cut back
their goals for gross industrial output in 1951+ in order to claim ful-
fillment of their plans, and Albania failed to reach its initial tar-
get. Moreover, the announcements on the results of the 1954 plans
indicate that in each country the percentage increase in industrial
production in 1954 was smaller than the increase in either 1952 or
1953. In several of the Satellites, the 1954 gains were no more than
one-fourth to one-half of the increases claimed for the previous year.
Hungary admitted, moreover, that its heavy industrial output declined
3.1 percent in 1954.
The economic plans for 1955 show some recognition by Satellite
leaders of the difficulties and shortcomings experienced in 1954 and
of the factors which underlay them -- notably, the raw material short-
ages, the declining rates of increase in labor productivity, and the
inadequate allocation of resources to agriculture. Of the 6 Sat-
ellites which announced their over-all goals for industrial out-
put in 1955, only Czechoslovakia and Hungary -- the 2 countries which
made the poorest showing in'1954 -- planned larger rates of increase
in 1955 than proved possible in 1954. Except for Albania, no Sat-
ellites planned increases in industrial output of as much as 10
percent -- a rate of growth which was equalled or exceeded (sometimes
by large margins) by every Satellite in 1952 and 1953 (see Figure 1*).
The earlier rates of growth were the result of the relatively rapid
expansion of industrial employment and the highly productive nature
of the capital investments undertaken at that time. Because of the
age and sex distribution of the populations and the manpower needs
in the agricultural sectors, the Satellites recently have been unable
to increase their industrial labor forces at the rates previously
attained. At the same time, the returns to capital investment have
diminished seriously, since the earlier investment programs exhausted
the most productive investment opportunities.
Scattered data on the production and investment plans for
1955 show that higher rates of increase are planned for consumer
goods output than for producer goods output in several of the coun-
tries. The same relationship may also hold for some of the others.
Hungary planned an increase of 3.7 percent in heavy industrial output
* Following p, 8.
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in 1955, in contrast to the 1954 planned decline of 2 percent, but
this increase is smaller than the scheduled increases of 7 and 6-per-
cent for the light and food industries, respectively.
The picture presented by the agricultural sectors of the Sat-
ellite economies is one of continuing stagnation rather than slackening
growth rates. Large increases in the outputs of agricultural commodi-
ties were planned for 1954 and again for 1955. The results of such
programs usually have not been described in any detailin official pub-
lications, probably because they have not been carried out effectively
and consequently have not improved agricultural conditions materially.
Additional evidence that Satellite economic policy has not
changed appreciably since 1954 may be found in the state budgets pub-
lished by the various countries. Planned increases over scheduled
expenditures in 1954 did not exceed 12 percent in any country except
Albania. As in past years, the 1955 expenditure plans may not have
been fulfilled completely, with the result that the increases in actual
expenditures from 1954 to 1955 may be less than the rise in the planned
amounts. Hungary and Bulgaria planned expenditures only 3 to 4 percent
higher than the sums actually -spent in 1.954, and Czechoslovakia sched-
uled lower expenditures than were planned in 1954, although actual spend-
ing may have increased if the authorized level was reached in 1955.
Although analysis of planned expenditures by budget categories
is hampered by many gaps in the published data and by uncertainty re-
garding the content and comparability of some of the announced figures,
the allocations of budget-funds generally conform to the stated aims
of the "new course." Not all of the allocations in everycountry point
in this direction, of course, but the deviations from what may be re-
garded as "new course" allocations of funds are not sufficiently general
among the Satellites to justify the conclusion thatthe "new course"
has been modified substantially.
As with budget allocations, an examination of 1955 investment
plans can make only a limited contribution to an appraisal of current
economic policy because of deficiencies in the data. Although the au-
thorized level of budgetary investment in Czechoslovakia was-signifi-
cantly higher in 1955 than in 1954, the planned level of total state
investment appears to be the same in 1955 as in 1953 and 1954. In
Poland, a 1954 announcement that the level of state investment was to
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 SECRET
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OFFICIAL ANNUAL RATES OF INCREASE.
IN INDUSTRIAL PRODUCTION, 1952-54, AND 1955 PLAN
(In percent)
22
15.6
(Initial) 14.4
10
(Revised)
12.5
12.0 11.8
10 10
8.7 9. 8.5
7.3
5.1
a
(o
0
'52 '53 '54 '55 '52 '53 '54 '55 '52 '53 '54 '55 '52 '53 '54 '55 '52 '53 '54 '55 '52 '53 '54 '55 '52 '53 '54 '55
ALBANIA BULGARIA CZECHOSLOVAKIA EAST GERMANY HUNGARY POLAND RUMANIA
SECRET
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be unchanged in 1955 was borne out by a 1955 plan announcement. Rumania,
on the other hand, planned to cut its budgetary investment in 1955 as in
1954, and total state investment probably was also scheduled to fall
again. In general, investments in heavy industry in 1955 were to make
up a smaller proportion of total investment than previously, whereas
larger shares were scheduled in most instances for agriculture, the coal
and power industries, light industry, and social and cultural facilities,
including housing.
The remaining parts of this section consist of country-by-coun-
try reviews of the published information on economic plans and policies
summarized above.
B. Czechoslovakia.
1. Economic Plan for 1955.
The economy of Czechoslovakia, like the economies of most
of the Satellites, has been operating under considerable strain in
recent years. This is shown, for example, in the downward revision
of the plans for 1953 and 1954. In practice, there has been a tendency
to sacrifice the agricultural goals in order to promote industrial devel-
opment, but, according to official sources, the rate of growth in indus-
trial production nevertheless declined from 18.3 percent in 1952 to 10
percent in 1953 and 4.4 percent in 1954 (see Table 1*). The plan for
1955, however, suggests that the "new course" policies relating to in-
dustry are having a measure of success. Gross industrial production
was planned initially to increase about 9 percent in 1955. This is
substantially more than either the initial planned increase or the
final achievement for 1954, although it is still much less than the
average annual increase of 15 percent realized during the period 1949-53.
The goal for 1955 was reduced to a 6.8-percent increase in December 1954,
but this cut was restored following overfulfillment of the plan for gross
industrial output during the first quarter of 1955. The outputs of pro-
ducer goods and consumer goods were planned to increase by approximately
the same rate in 1955, continuing the relationship between the two cate-
gories of goods which appeared in 1954 for the first time in several
years.
* Table 1 follows on p. 10.
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Growth of Industrial Production in Czechoslovakia
1949-54 and 1955 Plan
1949 J 1950 1955
1951 1952 1953 1954 3 Plan
Gross industrial
production
16.1
15.3 J 14.9 ~/ 18.3 /
10
4.4
9
Producer goods /
8
15.6 / 22.9 LO/ 27-3 /
12.1 Ig/
4.2
9
Consumer goods J
22.4
15.0 8.2 9.5
7.9
4.7
9 J
a. Calculated from the annual increases shown for 1950-53 and the total increases reported
for the period 1949-53. The latter are 100 percent for gross industrial production, i/
(for serially numbered source references, see Appendix E) 119 percent for producer goods,
and 80 percent for consumer goods. /
b. The formal announcement on the 1955 plan did not contain a gnat for grass in ustria
production. In August and December 1954, before the formal plan announcement for 1955,
planned increases in industrial production of 8.8 percent and 6.8 percent, respectively,
were mentioned in official statements. As a result of the overfulfillment of the industrial
production plan for the first quarter of 1955, the goal for the entire year was increased
by 2.2 percent. ?/ This increase, applied to the 6.8-percent goal, gives a revised plan of
9 percent. The August 1954 announcement indicated that the outputs of producer goods and
consumer goods were planned to increase at approximately the same rate in 1955.
c. Data for 1950-52 (and possibly for 1953) apply to the output of heavy industry rather
than to the output of producer goods. Small quantities of some consumer goods such as
bicycles and washing and sowing machines are therefore included in the figures.
d. Approximate.
e. Data for 1950-53, from source 13 , apparently are weighted averages of official data
for the Ministries of Food and Light Industry.
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The 1955 increase in industrial output apparently was pred-
icated on a rise in labor productivity of 8 percent compared with the
increase of 2 percent reported for 1954. This target seems rather high,
but information covering the first half of 1955 suggests that it may
have been attained. Because of its shortages of almost all kinds of
labor, Czechoslovakia is particularly dependent on sizable gains in la-
bor productivity for the fulfillment of its economic plans.
The above-mentioned revisions of the 1955 goal for indus-
trial production have been paralleled by changes in the opposite direc-
tion in the planned output of agriculture. An increase of 4.5 percent in
agricultural output in 1955 was mentioned at the Tenth Party Congress in
July 1954. 14 In December 1954 a planned increase of 12.6 percent was
indicated, a/ but this was subsequently reduced to 7.3 percent when
the industrial target was raised. 16 The agricultural goal for 1955
was much smaller than that for 1954 but was about three times the aver-
age annual increase in agricultural output indicated by official
announcements for the period 1949-54.
The government's concern over the stagnation of Czechoslovak
agriculture resulted in the enactment in May 1954 of a special Three
Year Plan for agriculture. This plan calls for an increase in farm area
of 200,000 hectares,* most of it in the Sudetenland border areas vacated
by German settlers after the war. The agricultural labor force is to be
increased by 320,000 workers by the end of 1956. This increase is to be
accomplished largely by channeling new workers to agriculture rather than
to industry as in the past. In addition, the plan contains the usual
provisions for the achievement of higher productivity through greater use
of machinery and fertilizers. 17/
This program made little progress in 1954. Production of
agricultural commodities apparently fell far short of the scheduled in-
creases, and the settling and cultivation of the border areas was well
behind schedule at the end of the year. The intention seems to be not
only to continue with the special Three Year Plan for agriculture but
also to make up the shortcomings in the fulfillment of the first year's
objectives.
* One hectare equals 2?.471 acres.
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S-E-C-R-E-T
2. Trends in the State Budget.
Total-revenues and expenditures-in the Czechoslovak budget
for 1955 were much the same as the estimates for 1954 (see Table 2).
There were some sizable changes, however, among the three most important
categories of expenditures. Expenditures in the largest category, Fi-
nancing the Nationalized Economy, were scheduled to fall about 10 percent.
The nature of this cut is uncertain. Explicit expenditures within this
category for industry and agriculture were somewhat higher than in 1954.
Thus the reduction applies to the remaining expenditures, which were not
explained, although they were as large in amount as the announced alloca-
tion to industry and agriculture.
Planned Revenues and Expenditures in the State Budget
of Czechoslovakia
1953-55
Billion New Crowns
Budget Category
153 J
194 20
1955 21
Revenues
74.9
87.8
86.2
Expenditures
74.2
87.6
86.o
Financing the Nationalized Economy
43.8
48.5
43.9
Cultural and Social
19.1
27.4
28.3
Defense and Security
7.2
7.8
10.4
Administration
3.2
3.7
3.5
National Debt
0.8
0.1
0.0
a. To take account of the currency reform of May 1953, official
data in "old" crowns 18 have been converted to "new" crowns at a
rate of 5.81 to 1. This is the ratio between an official figure
on planned expenditures in "old" crowns (430.9 billion) and a com-
puted figure in "new" crowns (74.2 billion). The latter figure is
derived from the official statement that planned expenditures of
87.6 billion crowns in 1954 were 18 percent higher than expenditures
(interpreted to mean planned expenditures) in 1953. 12/
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The drop in planned expenditures on the nationalized econ-
omy was largely offset by a rather large increase for defense and secu-
rity and by a small increase in cultural and social expenditures. Ex-
penditures for cultural and social purposes thus continued well above
the pre-"new course" level of 1952. Defense spending for 1955 was about
one-third more than in 1954, increasing from 9 to 12 percent of total
expenditures. This increase raised the share of the Czechoslovak budget
devoted to defense to about the same level as in the other Satellites.
State investment expenditures in Czechoslovakia have de-
clined slightly since the introduction of the "new course," in contrast
to the large increases registered during the period 1949-52 (see Table
3). Although the amount of state investment financed through the budget
in 1955 22 was somewhat higher than that in the 1954 budget plan, to-
tal state investment apparently was planned to remain at the same level
as the amounts planned for 1953 and 1954 after the "new course" was
adopted. In both 1953 and 1954, however, actual state investment was
about 15 percent below the revised goals.
Table 3
State Investment in Czechoslovakia
1949-54
Year
Billion New Crowns b
(Constant Prices)
Index
(1949 = loo)
1949
10.1
100
1950
14.2
140
1951
18.3
181
1952
20.6
204
1953
19.8
196
1954
20.0
24
198
a. Source Q/., except as indicated.
b. Values for 1950-53 are calculated from
the index numbers and the published value
for 1949 (before rounding).
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In 1954 there were large percentage increases in invest-
ments in agriculture, housing, and social and cultural facilities.
Investments in agriculture, consisting mainly of new equipment for
the machine tractor stations and-improvements of land and farm build-
ings, increased almost 100 percent over 1953. Construction of housing
and of social and cultural facilities increased by roughly 40 percent
and 80 percent, respectively. g The size of these increases is an
indication of past neglect of such investments-as well as an example
of the implementation of the "new course." The distribution among
economic sectors of investment planned for 1955 cannot be determined
at present.
3. Trends in Economic Policy.
At the Tenth Congress of the Czechoslovak Communist Party
in June 1954, the "new course" policies of the previous year in gen-
eral were reaffirmed. The directives issued by the Party Congress
expressed an intention to take measures to increase agricultural pro-
duction substantially in the next few years; quickly eliminate the
shortages of -fuel, electric power, and iron ore; and increase and
improve the quality of consumer goods output. 26 Some changes from
the 1954plan to the 1955 plan are apparent, but current economic
policy in Czechoslovakia may reasonably be characterized as a con-
tinuation of the "new course."
Czechoslovak officials are again stressing the view
that the growth of the economy depends fundamentally upon the ex-
pansion of heavy industry, which depends in turn upon adequate
supplies of raw materials. In a recent speech, Premier Siroky
mentioned the importance of the preferential development of heavy
industry in the expansion of the economy and said that this prin-
ciple was applied in 1953 by concentrating on the lags in produc-
tion of raw materials of concern to heavy industry. He went on to
say that "if, in the plans for 1955, we stress heavy industry and
concentrate means for developing its fuel, power, and ore basis,
this only means continuing on the road which, since the Five Year
Plan, has been followed unwaveringly." / This principle has not
been abandoned in Czechoslovakia during the "new course," but at
present it remains more an expression of basic aims than an indica-
tion of the feasibility of markedly changing the economic goals for
1955 as compared with those for 1951+.
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C. East Germany.
1. Economic Plan for 1955.
The East German economic plan for 1955, the last year of
the Five Year Plan, was not published until the latter part of May
1955. This delay of several months compared with the announcements
of previous years suggests indecision or other difficulties in.draw-
ing up the plan. East German officials no doubt were concerned about
the failure of consumer goods production to keep up with the wage bill
and about the resulting excess of money in the hands of consumers. The
shortages of food which occurred during the first half of 1955 also may
have prompted a revision of some kind in the 1955 plan and thus delayed
its publication.
The May announcement of the 1955 plan called for an increase
of 5.1 percent in gross industrial production. 2L8/ This was a smaller
rate of increase than indicated by earlier information about the goal
for 1955. In September 1954 the Communist Party in East Germany had
called for a 10-percent increase in industrial production in 1955. An
increase of this amount, added to the gains of the previous 4 years,
would have been sufficient to fulfill the originally announced goal
of a 92-percent rise in industrial output during the Five Year Plan.
It was subsequently reported, however, that in December 1954 the East
German Council of Ministers adopted an increase of only 7.1 percent
for the 1955 plan. / The planned increase of 5.1 percent announced
in. May thus represented a second downward revision of the Party's
proposal of September 1954.
The goal for 1955 constituted a sharp reduction from the
1954 objective of a 13-percent increase in industrial output
(later reduced to 10 percent) and was only half as large as the offi-
cially reported rate of industrial growth of 10 percent for 1954. 31
This cutback and the downward revisions of the plans for 1953 and
1954 contrast strongly with the successful effort in 1952 to raise
industrial output more than had been planned initially.
The emphasis of the 1955 plan for industry was upon the
production of coal, electric power, and building materials, for which
increases of. about 10 to 14 percent were planned. The production of
all other major industry groups mentioned in the decision of the
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People's Chamber on the 1955 plan was planned to increase less than
industrial production as a whole. / Unlike developments in 1954,
the planned increase of 3 percent in the supply of consumer-goods in
1955 was less than the planned increase in total-industrial production.
State investment, including investments in agriculture,
housing, and cultural facilities such as schools as well as in indus-
try, was to increase by 17 percent compared with 1954. Within industry,
the largest increases were planned for building materials (137 percent),
chemicals (35 percent), and electric power (20 percent). 3/ State
investments in the coal industry and light industry were to increase by
only 12 percent and 10 percent -- less than the average increase for
industry. The scheduled percentage increases for investment in the
coal and electric power industries were muchsmaller than the increases
realized in 1954, suggesting that the pressure on these basic industries
has been eased somewhat.
The planned 17-percent increase in gross agricultural output
in 1955 probably is the least realistic part of the 1955 plan. Although
East German officials have -admitted that production of grains and legu-
minous crops fell slightly from 1953 to 1954, crop production was to
rise by about 9 percent. in 1955. The planned average yield for grains
was 2,580 kilograms per hectare, which is considerably higher than any
average yield known to have been achieved in East Germany in the past
and is also higher than the average yields realized in West Germany,
where larger supplies of fertilizer have been available. Planned yields
for other crops were likewise higher than yields achieved in the past,
although not by -so wide a margin as with grains. Substantial increases
in livestock numbers were also planned, and the production of animal
products was to increase by one-fourth in 1955. Recent agricultural
experience in the Satellites indicates that such gains can hardly be
expected in 1 year.
2. Trends in the State Budget.
The published budgets of East Germany have revealed very
-little information in recent years. The budget announcement of 1955,
which, like the economic plan, appeared several months later than
usual, contains little more than estimates of total revenues and
expenditures for 1955. The increase in planned total expenditures
over 1954 is about 12 percent compared with an increase of 4 percent
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in 1954 (see Table 4). Planned expenditures on the nationalized econ-
omy were somewhat smaller than in 1954, and social insurance disburse-
ments were to be about the same as in 1954. Thus the scheduled increase
in expenditures in 1955 applied to the large remaining portion of ex-
penditures, which is not broken down in the published budget.
Table 4
Planned Expenditures in the State Budget of East Germany
1952-55
Billion DME
Budget Category
1952 IV
1953 J J
1954 16J
1955
Total expenditures
27.7
32.7
34.1
38.1
Nationalized Economy
4.0
5.8
5.8
5.1
Social Insurance
4.7
5.1
5.8
5.9
Other
18.9
21.8
22.6
27.2
a. Revised plan.
3. Trends in.Economic Policy.
Although the "new course" modifications in economic policy
have had some significant results, the initially announced aims of this
program have not yet been realized fully, and it is questionable whether
there still is an intention to do so. The present economic policy of
East Germany appears to be to continue the "new course" more or less as
it was carried out in 1954. The economic plan for 1955 resembled the
1954 plan in its general allocation of resources and, more specifically,
in its emphasis on increased production of basic industrial materials,
agricultural commodities, and consumer goods.
East German officials showed particular concern during
1954 over the related problems of labor productivity, profitability
of the nationalized enterprises, and the amount of currency in cir-
culation. The productivity of labor was claimed to have increased
4.1 percent in 1954. Although this is a respectable gain for 1 year,
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it is less than the planned increase of nearly 7 percent as well as less
than one-half the increase in the average worker's wages. As there is
little prospect of expanding production materially in the near future by
increasing the size of the labor force or by altering its distribution
among the various economic sectors, achievement of the plan goals for
1955 depended to an important extent on the government's efforts to
induce (or force) the workers to work harder. (Some gains in labor pro-
ductivity may, of course, be expected as a result of an increased amount
of capital equipment per worker.) The concessions of the "new course"
apparently did not increase productivity as much as was anticipated.
As a result, the output of consumer goods did not keep up with the rise
in the average wage, and the amount of currency in circulation thus rose
substantially.
An attempt to solve this problem by ordering an across-the-
board increase in work norms has been resisted so far. Such an increase
in norms has been officially rejected as "unscientific." Avoidance of
this measure is more reasonably explained by the regime's fear of its
economic and political consequences, inasmuch as it was a general 10-
percent increase in work norms that touched off the riots of 17 June
1953. The official line is that "technically founded" work norms should
be adopted more widely. A change to "technically founded" norms
means a recalculation of norms on the basis of the past performance of
people working under relatively favorable circumstances or possibly on
the basis of time and motion studies of some kind. In any case, most
norms undoubtedly would be raised as a result of this procedure.
The 21st meeting of the Central Committee of the SED, East
Germany's Communist-Party, in November 1.95+ was devoted primarily to
the problem of reducing the costs of production in the nationalized
enterprises. In addition to increasing the application of "techni-
cally founded" norms, this is to be accomplished by shifting some
workers to "productive" employment (as contrasted with clerical and
administrative work) and by instituting or revising material norms in
order to economize on the use of raw materials. In addition, a decree
simplifying planning methods has been issued. This decree states
that the former system of requiring all firms to use the same system
of planning did not take sufficiently into account the differences
between-firms.- Henceforth, the number of specific plan goals imposed
on an enterprise will be reduced so that it will have greater latitude
in planning the fulfillment of its over-all production goal-.
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The system of constant prices now used for planning purposes
also has been attacked by East German officials recently, notably by the
chief of the State Planning Commission and the Minister for Heavy Indus-
try. LO/ This attack is hardly necessary if it is directed only against
the planning prices, since it was determined in February 1953 that these
prices would not be used for the Second Five Year Plan. ~.l Some of
this criticism may be aimed at the system of "market" prices (also de-
termined by the government) which apply to all commercial transactions
and which therefore affect the profits and losses of the nationalized
enterprises. These prices are the result of a hodgepodge of adjust-
ments of prewar prices. At the present time they probably do not
reflect real costs very accurately in many instances. Moreover, the
general level of these prices is such that over one-fourth of the
nationalized enterprises operate at a loss. This, in turn, requires
subsidies from the budget exceeding one-fifth of total expenditures.
The pricing system thus entails unnecessary fiscal complications, as
the output of the nationalized enterprises must be paid for in part
through taxes.
Another problem in economic policy has been raised by the
increase in the average amount of currency in circulation outside banks
from 3.5 billion DME during the fourth quarter of 1953 to 4.5 billion
DME during the same period of 195)4.* It is probable that a currency
reform was seriously contemplated by East German officials during
1954. The rumors of a currency reform during the first quarter of
1955 were officially denied although there were several attacks in
the press and on the radio against currency smuggling and racketeering
at that time. 43 As in the case of increased work norms, it apparently
was decided that a currency reform would be unwise politically and
possibly self-defeating economically because of an adverse effect on
the productivity of labor.
Although the "new course" economic policy is still very
much in evidence.in East Germany, some modifications of it may be
made if expenditures on military forces are increased substantially.
Walter Ulbricht, the First Secretary of the SED, issued a directive
to local SED executives on 4 December 195+ which suggests that some
adjustments in the economy were anticipated because of the additional
economic burden of armaments production and an expanded military
establishment. 44
* Calculated from data in source L 2J.
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D. Hungary.
1. Economic Plan for 1955.
The censure of Premier Nagy early in 1955 by the Central
Committee of the Hungarian Communist Party and his subsequent removal
from office gave rise to widespread conjecture that the economic plan
for 1955 would show much greater emphasis on the development of heavy
industry than did the 1954 plan. The announced plan for 1955,
however, changes the resource allocation_policy of the "new course"
only to a limited extent.
The planned increase in gross industrial production is
5.7 percent compared with the 4.5-percent increase planned L6/ and
the 3.1-percent increase reportedly realized in 1954 (see Table 5).
The rise of 3.7 percent in the output of heavy industry scheduledfor
1955 reverses the 3.1-percent decline experienced in 1954 and, if
achieved, would merely restore such production to approximately the
level of 1953. Increases of 7 percent and 6 percent are scheduled
for light industry and the food industry, respectively. These in-
creases are larger than the planned .1955 gains for heavy industrial
production and of industrial production in general, but they are
smaller than the officially announced accomplishments of the light
and food industries in 1954. Viewed against the background of the
Five Year Plan (1950-54), with its major upward revision of indus-
trial targets in 1951 and "new course" cutbacks in 1953-and 1954,
the changes in goals-from 1954 to 1955 are relatively small.
Growth of Industrial Production in Hungary a/
1950-54 and 1955 Plan
1950 ~LV
1951 L 8J
1953 iOJ,
1954 51
1955 Plan 52/
Gross industrial
production
34.1
30.1
23.6
11.8
3.1
5.7
Heavy industry:
36.0
37.7
33.3
N.A.
-3.1
3.7
Light industry
29.4
26.9
10.5
N.A.
9.5
7
Food industry
N.A.
16.5
16.1
N.A.
12.2
6
a. Production of "Socialist industry," which consists of the state and coopera-
tive enterprises and accounts for all but 2 or 3 percent of the total industrial
output.
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The planned 7.3-percent increase in agricultural production
in 1955 is about the same as the goal for 1954, which apparently was not
fulfilled. Grain yields were poor in 1954, in spite of an increased sup-
ply of fertilizers, insecticides, and agricultural machinery and imple-
ments and of further concessions to the peasants to give them greater
incentives for increasing output. Production of bread grains apparently
declined in 1954 although the area planted in such crops increased.
Moreover, the most' conspicuous shortcoming evident in the recently an-
nounced results of Hungary's Five Year Plan was in agricultural produc-
tion, which was claimed to have increased only 16 percent during the
5-year period. 5,/ This is only a fraction of the projected growth of
42 percent (later revised to 54 percent) ; in the case of bread grains
and cattle, it is admitted officially that the prewar position was not
reached.
Failure to increase agricultural production substantially is
causing serious problems for the regime. The credits which formerly
were earned in non-Communist countries by exporting foodstuffs have
shrunk badly; indeed, Hungary has been importing grain since October
1953. The country consequently has resorted to a number of expedients
in order to import the necessary foods and raw materials. These ex-
pedients include securing credits from exporting countries, exporting
industrial products at prices much lower than in the home market and in
competition with other Satellites, and pressing the sale of industrial
products in the underdeveloped countries of the Near East and Latin
America.
As Hungarian leaders admit that the productivity of labor
in "Socialist industry" was 1.5 percent lower in 1954 than in 1953,
increased labor productivity understandably was given a great deal of
attention in the 1955 plan. Officials also have stressed the necessity
of economy in the use of raw materials, because Hungary is poorly endowed
with industrial raw materials such as iron ore, coking coal, and non-
ferrous metals other than aluminum. An effort was to be made to increase
labor productivity by at least 3.9 percent, to effect at least a 2.3
percent reduction in the use of raw materials per unit of output, and
as a result to reduce production costs by an average of 3 percent com-
pared with 1954.
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2. Trends in the State Budget.
The planned level of budget revenues and expenditures has
been relatively stable in recent years. The scheduled amounts are not
usually realized fully, the underfulf illment amounting to 6 to 9 percent
of the goals in the revised 1953 budget and the 1954 budget (see Table
6*). Total expenditures in 1955 were planned at 45.5 billion forints,
which is 5 percent less than planned expenditures in 1954 but 3 percent
more than was actually spent. The published budget shows an increase
of about 3 billion forints over the 1954 plan in the allocation of funds
to the national economy, most of it for purposes other than capital
investment. These purposes include subsidies to state enterprises,
-maintenance costs of the machine tractor stations, and provision of
working capital for state enterprises. This increase may be misleading,
however, because of the treatment in 1955 of another budget category,
Loan Repayments and Reserves. This item, which amounted to about 4
billion forints in 1953 and was scheduled at 6 billion forints in 1954,
is not mentioned at all in the 1955 budget. It may therefore have been
redistributed to the category National Economy, giving an exaggerated
idea of the change in planned expenditures for such purposes compared
with 1954.
Hungary's budget calls for 9 billion forints of net invest-
ment in 1955, or 2.2 billion forints less than the actual amount ofnet
investment in 1954. This substantial cut is partially offset, however,
by a planned increase of nearly 1 billion forints in investment expendi-
tures for replacement of capital equipment. 55
The shares of heavy industry and the light and food indus-
tries in the 9 billion forints of investment are 3.1 billion and 780
million forints, respectively. These amounts indicate some shifting
of resources-in favor of the light and food industries compared with
the planned investment allocation for 1954 (see Table 7*). It is
probable that a large part of the planned investment in replacements
of equipment also applies'to heavy industry. It is doubtful, however,
that an allowance forthis element of investment would indicate in-
creased rather than reduced emphasis on heavy industry. -
* Table 6-follows on p. 23-
Table 7 follows on p. 24.
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Table 6
Revenues and Expenditures in the State Budget of Hungary
1953-55
Billion Forints
1953
195+
Revi
ed
s
195
Budget Category
,
h
Plan aJ 2J
Actual L8J
Plan .2/
Actual 6o
Plan
Revenues
50.2
46.9
0.7
45.3
47.0
Expenditures
49.1
46.1
47.9
14.0
45.5
National Economy
24.3
23.0
22.3
N.A.
25.2
Net Investment
20.1
16.6
13.6
11.2
9.0
Other
4.2
6.4
8.7
N.A.
16.2
Social Insurance
and Health
5.6
5.4
6.2
N.A.
7.0
Education and
C
ulture
3.6
3.1+
3.8
N.A.
3.5
De
fense
6.3
6.3
5.4
4.8
5.7
La
w and order
2.3
2.1
2.1
N.A.
2.1
Ad
ministration
2.0
1.9
2.0
N.A.
2.0
Lo
a
an Repayments
nd Reserves
4.9
3.9
6.0
N.A.
a. This is a downward revision of an earlier budget plan for 1953 which
showed planned revenues of 52.7 billion forints and planned expenditures of
51.9 billion forints. 56
b. Probably included in "National Economy -- Other."
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Table 7
Net Investment in the State Budget of Hungary
1953-54+
Billion Forints
195 62
1t
Revised Plana
Actual
Plan L4/
Actual
Industry
13.9
7.0
4+.8
N.A.
Heavy industry
13.1
6.5
4.P_
N.A.
Light and food industries
0.7
0.6
0.6
N.A.
A ___J _._11..___ excluding W-_L: -_
tractor stations
2.7
2.2
3.2
2.6 b
Machine tractor stations
(
0.8
1.3
N.A.
Other
(3.5
6.5
5.5
N.A.
Total
20.1
16.6
13.6
11.2 66
a. The initial budget for 1953 showed total planned investment of 19 bil-
lion forints. 6
b. Based on an official report that agricultural investment was 400 mil-
lion forints more than in 1953.
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Budgetary investment plans in Hungary generally have been
underfulfilled by substantial margins. Investment of 11.2 billion
forints in 1954 not only fell below the planned amount of 13.6 billion
forints but also was one-third less than actual investment in 1953, as
shown in Table 7. Budgetary investments in agriculture in 1954 were
to be considerably larger, and investments in heavy industry much lower,
than the amounts realized in 1953, with investments in the light and
food industries remaining at about the same level as in 1953. The rel-
ative shares of industry and agriculture in actual investment expendi-
tures in 1954 have not been announced. In spite of the reduction in
total investment expenditures, it seems probable that the "new course"
shift in investment from heavy industry to agriculture and the machine
tractor stations was generally maintained in 1954, as planned.
3. Trends in Economic Policy.
The political shakeup in Hungary in March and April 1955
was the culmination of a running dispute between two factions of the
Hungarian Communist Party. As late as October 1954, it appeared that
Premier Nagy had won the endorsement of the party for a continuation
of the "new course," which he had announced in mid-1953 and had sup-
ported subsequently. The economic aims expressed in the October
resolutions of the Party included (a) the systematic raising of the
living standard of the people by increasing agricultural and indus-
trial production, with special emphasis on a speedy expansion of
agricultural output; (b) a healthy program of industrialization
which corresponds to the country's capabilities; and (c) a systema-
tic effort to increase productivity, decrease production costs, eli-
minate waste, and improve economic management.
Although the resolutions echo some policies of the "new
course" as announced in 1953, they do not mention specifically two
important "new course" policies. These are the reduced emphasis on
heavy industry, in particular on the manufacture of producer goods,
and the relaxation of efforts to collectivize agriculture. Both
of these modifications of cardinal Communist principles in 1953 were
described as temporary policies to be pursued for 2 or 3 years, until
the economy had recovered from the too rapid pace of industrializa-
tion, shortages of raw materials and power, and neglect of agricul-
ture and the consumer goods industries.
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On 9 March 1955 the Central Committee of the Party passed
resolutions condemning Premier Nagy. These resolutions stated that
the "new course" was the correct policy but that it had not been carried
out properly. The correct economic course, it was pointed out, is the
promotion of expanded production and increased productivity, which is
to be accomplished primarily by the development of heavy industry and
agriculture.
In April, Nagy was expelled by the Party's Central Committee
and replaced as Premier by Andras Hegedus, formerly one of two Deputy
Premiers and before that Minister of Agriculture. This change was,
however, essentially a victory-for-Rakosi, First Secretary-of the Party's
Central Committee. Nagy was accused, among other things, of halting the
development of heavy industry and permitting its output to decline, ig-
noring the importance of increasing productivity and reducing production
costs, failing to enforce-the agricultural. delivery quotas of peasants,
and causing a decline in the collectivization of agriculture. In short,
Nagy wasmade a scapegoat-for nearly all of the country's economic dif-
ficulties with the possible exception of the stagnation of agriculture.
With the change of leadership in Hungary, it was expected
that production of consumer goods and -other features of the "new course"
would receive considerably less attention. As the preceding review of
the 1955 plan shows, however, the emphasis on consumer goods output was
only slightly less than in 1954, the plans for agriculture were about the
same, and the plans for heavy industry provided only for a return to
the 1953 level. The change in policy lay rather in a renewed effort
tosecure greater economic efficiency and tighten discipline. Some of
the new decrees were aimed, for example, at more effective collection
of the-peasants' delivery quotas for agricultural commodities and at
prevention of speculation in farm produce.
Future economic policy was clarified recently by Lagos Acs,
Secretary of the Party's Central Committee. He stated, in a speech to
the National Assembly, that heavy industry would continue in 1955 to be
developed at a slower pace than the light and food industries inorder
to restore correct: proportions in the economy. This relationship "can-
not remain a lasting feature" of Hungary's economic development, how-
ever, and will be changed in the first few years of the Second Five
Year Plan, which starts in 1956. "The principle that heavy industries
must take precedence over the other branches of the people's economy"
will be reasserted at that time within the limits of the "resources and
possibilities" of the economy.
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E. Poland.
1. Introduction.
Although it was most unlikely that the over-all industrial
and agricultural production goals of Poland's Six Year Plan would be
reached in 1955, the last year of the plan period, the country has
experienced less strain than the other Satellites in carrying out its
first long-term program of economic. development. This probably can be
explained by two factors which to some extent set Poland apart from
the other Satellites. The first is the acquisition from Germany of
the important Silesian industrial area, which contains some of the most
valuable coal deposits in Europe. Second, the problem of feeding the
population has been less pressing than in the other Satellites because
of the substantial losses of population which resulted from the war
and the readjustment of Poland's boundaries. The population declined
32 percent from 1939 to 1946, whereas the amount of arable land was
reduced by only 11 percent. / Poland has been able, therefore,.to
provide its population with an average daily caloric consumption of
food somewhat higher than in the other Satellites, L8/ and it has
accomplished this without allocating a materially larger share of
resources to agriculture than have the other. Satellites.
2. Economic Plan for 1955.
Gross industrial production in 1955 was scheduled to in-
crease by 8.5 percent, compaxed with an announced increase of 11 per-
cent in 1954. This indicates that the original long-term plan, which
called for a rise in industrial production of 158 percent from 1949
to 1955, / would almost certainly be fulfilled. The officially
announced gains during the first 4 years of the plan (1950-53) totaled
118 percent cumulatively; this was raised to 142 percent in 1954.
Thus a further increase of only 6.6 percent was needed in 1955 to
reach the original industrial objective of the plan. Poland would
have been able to attain this increase even if its rate of industrial
growth in 1955 were substantially less than that claimed for 1954
(see Table 8*).
* Table 8 follows on p. 28.
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S-E-C-R-E-T
Table 8
Growth of Industrial Production in Poland
1951-54 and 1955 Plan
-Percent Increase over Previous Year
1951 _71/1
52 1/
1953
11954 73
1955 Plan
_
Gross industrial
production
24
20
17-5.YLI
11
8.5 U5
Heavy industry
25
22
N.A. aJ
11 J J
6 b/ 77/
Light industry
18
12
N.A. J
11 /
11 L
a. According to -source , the officially reported increases are 22
percent for heavy industry and 20 percent for light industry. At least
one of these figures must be in error, since both exceed the increase
of 17.5 percent reported for industry as a whole.
b. Producer goods.
c. An increase of 11 percent is inferred from the officially reported
increases of 11 percent for consumer goods and for industry as a whole.
d. Consumer goods.
Production of both producer goods and consumer goods was
planned to increase and, according to official statements, did increase
by 11 percentin 1954. During the earlier part of the Six Year Plan,
the rates of increase for the comparable categories of heavy industry
and light industry show much more emphasis on the former, as shown in
Table 8. The 1955 plan again called for an increase of about 11 percent
in the output of light industry, whereas the output of producer goods
was scheduled to rise by only 6 percent. In this respect, therefore,
the "new course" is more evident in the :1955 plan thanit was in the
1954 plan.
Poland's less ambitious long-term goal for agricultural
production has fared rather badly. Although the output of agricul-
tural products was planned to rise 50 percent during the plan period, 72/
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the reported gain was only 9 percent during the first 4 years, 80 with
an additional increase of 5 percent claimed in 1954. 81 Polish officials
had, of course, expressed dissatisfaction with such shortcomings in the
agricultural sector, but in attempting to do something about them, they had
relied on coercive measures and exhortations rather than on an increased
allocation of resources to agriculture and the provision of stronger incen-
tives for peasants to increase production. Some more positive steps toward
expanding agricultural output have been taken under the "new course," but
these have not been far-reaching enough to remedy quickly the past neglect
of this sector.
3. Trends in the State Budget.
Planned budget revenues and expenditures in Poland have
risen steadily during the past 4 years, although the increases since
1953 have not been so pronounced as the change from 1952 to 1953,
which was partly the result of a sharp increase in prices and wages
in 1953 (see Table 9*). The expansion of the budget since 1953 has
been almost entirely due to the growing expenditures on the national
economy for investments, subsidies, and other purposes and to the
growing revenues from, the national economy in the form of taxes and
profits. Social insurance contributions and other revenues and ex-
penditures for national defense, administration, and social and
cultural activities have increased only moderately following the
rather abrupt rises in 1953.
Planned expenditures of nearly 115 billion zlotys in
1955 were 11 percent more than the amount scheduled for 1954. Ex-
penditures on the three most important categories -- the Socialized
Economy, Social and Cultural, and National Defense -- were to rise
slightly more, in percentage terms, than total expenditures. The
planned increase in budget expenditures on agriculture and forestry
in 1955 was 22 percent, however, or twice the scheduled rate of
increase for expenditures as a whole. Expenditures on administra-
tion were planned at about the same level as in 1953, and a decline
was shown for the remaining expenditures, which include reserves
and the servicing of the state debt.
* Table 9 follows on p. 30.
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Table 9
Planned Revenues and Expenditures in the State Budget of Poland
1952-55
Billion Zlotys
Budget Category
1952 82
1953 83
1954 2.4j
1955
63.8
101.1
115.4
122.0
Revenues from the
Socialized Economy
44.8
76.6
87.7
92.0
Contributions from
Social Insurance
7.0
10.4
11.9
13.3
Taxes from the Non-
Socialized Economy
7.9
6.8
5.8
6.2
Other
4.1
7.3
9.9
10.5
Expenditures
62.9
97.0
103.5
114.9
Socialized Economy
26.6
49.4
53.6
6o.8
Social and Cultural
16.2
23.5
25.3
28.9
National Defense
6.6
10.5
10.6
11.9
Administration
7.3
9.8
10.0
10.3
Other 6.2 3.7 3.9 3.0
State investment expenditures in 1955 were planned at
about the same level as in 1954, which in turn exceeded inve-stment
in 1953 by only 2 percent. L6/ This is in accordance with the offi-
cial announcement in 1954 that investment in 1954 and 1955 would be
maintained at the same level as in 1953. There was some redistribu-
tion of investment in favor of agriculture and social and cultural
services in 1954, taking into account both state investment and
credit-financed investment by independent and cooperative peasants,
although such plans were not realized fully. Investment outlays
(including credits) for agriculture, for example, increased 37 per-
cent over the previous year and those on social and cultural facili-
ties increased 23 percent. A further reallocation of investment,
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diminishing the share of heavy industry and increasing the shares de-
voted to agriculture, consumer goods industry, and social facilities
and housing, was planned for 1955.
F. Rumania.
1. Economic Plan for 1955.
No formal announcement was made on Rumania's economic
plan for 1955, the last year of the First Five Year Plan. On the
basis of the recent speeches of officials and fragmentary data from
other sources, it appears that the rate of industrial growth and the
general allocation of resources were planned to be much the same as
in 1954. According to the official report on fulfillment of the
1954 plan, gross industrial production was 6.6 percent higher than
in 1953. This rate of increase is about one-half of that registered
in 1953 and little more than one-fourth of that in 1952 (see Table
10). The announced increase in the productivity of industrial labor
of only 2.7 percent over 1953 was, of course, a major factor in the
slackening rate of industrial growth in 1954.
Planned and Actual Growth of Industrial Production
in Rumania
1951-54
Percent Increase over Previous Year
1251aY 1952 1953 1954
Annual plan
24.4
20.9 a/
24.0 8
8.2 b
Revised plan
12.4 91
6.4 a
Actual
28.7
23.0 2/
14.4 QJ
6.6
a. Calculated from official data on plan fulfillment.
b. Estimate from source 9/. Calculated from official
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The planned rate of growth in industrial output in 195+
was never announced explicitly. A rate of about 8.2 percent may be
calculated, however, from information which appeared in October 195.
in a Cominform newspaper. Since a 6.6-percent increase was reported
as a 100.2-percent fulfillment of the plan, it appears that there was
a small downward revision of the plan during the year.
As of October 1954 the output of producer goods was
planned to increase 5.l+-percent and that of consumer goods 11.8 per-
cent /; the announced results were 3.9 percent and 10.5 percent,
respectively. 262 Thus the increase planned for consumer goods was
much larger and was more nearly realized than the increase-for pro-
ducer goods. The cut in the planned rate of increase in industrial
output from 8.2 percent to 6.4 percent appears to-reflect primarily
the problems encountered in meeting the goal for producer goods.
There was almost no chance that Rumania would be able to
fulfill or even closely approach the over-all goal for industrial
production of its Five Year Plan -- a gross industrial output in 1955
which was 144 percent higher than in 1.950. The officially announced
increases in industrial output during the first 4 years of the plan
totaled about 93 percent. If Rumania increased industrial output at
the same rate in 1955 as in 1954, when a 6.6-percent gain was reported,
the final achievement for the Five Year Plan was an industrial output
about twice the 1950 volume. Equalling the-gains of 1954 probably was
the most that Rumanian planners could hope for, in view of the downward
trend in industrial growth during the Five Year Plan. Rumania's pros-
pects of fulfilling the industrial production goal of its Five Year
Plan thus changed completely since the first half of -1953, when it
seemed that theplan might be fulfilled in only 4 years.
The-rather high production goal of 10 million tons of
grain was announced for 1955. 9]/ This is half again as much as the
CIA estimate of grain production in 1954 and one-tenth more than the
official figure on grain production in 1954. 8
2. Trends in the State Bud.
Additional information on major trends in the allocation
of resources in Rumania is provided by a comparison. of the 1955 state
budget with those for earlier years. Planned revenues in the 1955
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budget were 44.4 billion lei, and planned expenditures were 43 billion
lei (see Table 11). The scheduled increase in revenues of 7 percent
over 1954 revenues was the same as the actual increase from 1953 to
1954. The 12-percent increase in expenditures planned for 1955 was
somewhat larger than that which occurred in the. previous year. There
has been a tendency in recent years, however, for actual expenditures
to fall short of the planned amounts by 1 billion or 2 billion lei. In
any case, the increases in revenues and expenditures planned for 1955
were considerably smaller than those which occurred in 1952 and 1953.
Revenues and Expenditures in the State Budget of Rumania
1952-55
Billion Lei
1952 1953 1954 195jOJ2
Actual 99 Actual 100 Actual J .101 Plan Revenues 34.3 38.8 41.4 44.4
Expenditures 29.0 35.6 38.3 43.0
Analysis of changes in the major categories of expendi-
tures is severely handicapped by the lack of information for certain
years on actual (as against planned) expenditures and by some double-
counting in the data, particularly in 1953 and 1954. The latter
defect in the information shows up as a difference between the an-
nounced total of planned expenditures and the sum of the planned
expenditures announced for the various categories of expenditures
(see Table 12*). Any discussion of trends in planned expenditures
in the various categories is necessarily tentative because of these
deficiencies in the data.
* Table 12 follows on p. 34.
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Table 12
Planned Expenditures in the State Budget of Rumania a
1952-55
Billion Lei
_Budget Category
1952 10 1953 104 1954 105 1955 1Y
Financing the National Economy
16.1
21.7
24.0
24.4
of which: -Capital Investment
11.5
13.9
10.5
-9.1
National Defense
5.0
6.8
4.3
4.5
Social and Cultural Activities
4.2
4.2
4.7
7.0
Social Insurance
1.0
1.2
1.6
Local Authorities
2.9
4.2
5.1
6.o
State Administration
2
4
1.5
1.3
1.3
Other Expenditures (
.
2.5
Total
31 ..6
39 6
4 .
Less double counting
1.0
2.1
2
0.2
Officially announced total
30.6
37.5
32-3
43.0
a. Although actual total expenditures are available for 1952-54., as shown
in Table 11, such data are not available for most of the major categories
of expenditures shown in this table. Planned amounts of expenditure are
therefore used throughout.
b. This is a "budgetary reserve" fund which was placed at the disposal
of the Council of Ministers. How much of it was spent and the-purposes
for which it was spent are not known.
Planned budgetary expendituresfor the category Financing
the National Economy, aside from the allocations for capital investment,
were about 13 percent higher than the allocation in 1954. Assuming
that there has been no change in the definition of "capital investment,"
this indicates appreciably larger expenditures in 1955 on subsidies and
working capital for nationalized enterprises. Funds allocated explic-
itly for national defense are slightly higher than in 1954 but still
substantially less than in 1953. Whether this means lower actual levels
of defense in 1954 and 1955 than in 1953 is uncertain. Total budgetary
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expenditures in 1953 fell somewhat short of the budget plan; part of
the deficiency may apply to defense expenditures. There have also been
reports that military pay and allowances have been cut substantially
since 1953, which would reduce the money cost of a military establish-
ment of given size.
Planned state investment (including that outside the bud-
get) declined from 17.9 billion lei in 1953 to 17 billion lei in
1954. 10 Whether this decline was to be continued in 1955 is not
known, although the 1955 budget indicates that budgeted capital invest-
ment -- a major component of total state investment -- was scheduled
to decline from 10.5 billion lei (planned) in 1954 to 9.1 billion lei
in 1955, as shown in Table 12. The size of the budget allocation for
capital investment depended to a large extent on the number and tempo
of development of large-scale construction projects such as the Danube-
Black Sea Canal, the Bucharest subway, the Bistrita-Bicaz hydroelectric
complex, and the iron and steel works at Roman in Moldavia. Abandon-
ing,, postponing, or stretching out work on such projects very likely
is the main reason for the recent decline in planned capital expendi-
tures in the budget.
Although planned capital investment financed through the
budget was lower in 1954 than in 1953,, investments in the consumer
goods industries and in agriculture ad forestry were planned to be
67 percent and 76 percent higher, re4 ectively, than in 1953. 108
While these goals may not have been. attained, the plan fulfillment
report states that such investments were increased considerably in
1954. It is therefore probable that investments in heavy industry
were reduced because a reduction was scheduled in total budgeted
investment. The planned increase in investment in the consumer goods
industry in 1955 was 15 percent over 1954, and that scheduled for agri-
culture and forestry was 40 percent. 10 These increases were much
smaller than those planned in 1954, but they nevertheless suggest
that these industries were continuing to receive a larger share of
investment resources than before the "new course." Since it is likely
that state investment was not planned to rise in 1955, the announced
increase in investments in the consumer goods industry and in agri-
culture and forestry in 1955 implies that planned investment in heavy
industry was less than in 1954.
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3. Trends in Economic Policy.
Statements on economic policy by Premier Gheorghiu-Dej in
1955 are not very helpful in determining the status of the "new course"
in Rumania. In March, for example, Gheo:rghiu-Dej referred to the measures
taken by the government "to increase agricultural production in order to
continuously improve the provisioning of the population with farm produce
and the light andfood industries with agricultural raw materials." He
also stated, however, that the government would follow a policy of unin-
terrupted development of heavy industry .-- "the basis for the development
of the national economy as a whole and for the increase of our people's
well being." 110 The ambivalence of these statements suggests that the
Rumanian regime was waiting for -clearer indications of the direction of
economic policy in the USSR and that the "new course" as a result might
be modified at any time. The most that can be said, pending a detailed
announcement on the economic plan for 1955, is that Rumania did not
appear to have abandoned or substantially modified the "new course."
G. Bulgaria. .
1. Economic Plan for 1955.
According to a decree issued in January on the economic
plan for 1955, Bulgaria's gross industrial production in 1955 was
planned to increase 7.3 percent over 1954.* A further decline in the
rate of industrial growth thus was anticipated by the Bulgarian regime
(see Table 13**). Moreover, the scheduled 7.3-percentrise in indus-
trial output in 1955 was considerably less than the average annual in-
crease of nearly 10 percent which was needed to achieve the goal of a
60-percent rise in industrial output from. 1952 to 1957. Whether 'the
growing gap shown in Table 13 between the rates of growth of the heavy
and light industrial sectors in earlier years was narrowed in 1954 or
was planned to be narrowed in 1955 has not been announced officially.
* An article in Rabotnichesko delo in February 1955 and a Sofia broad-
cast in March 1955 suggested, despite some ambiguities, that this goal
was revised upward to 11.6 percent. 111 These reports apparently
were incorrect or at least misleading, since the official report
on fulfillment of the plan for the second quarterof 1955 claimed
overfulfillment of the goal for industrial production as a result
of an increase of only 6 percent over the same quarter of 1954. 112
** Table 13 follows on p. 37.
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Table 13
Growth of Industrial Production in Bulgaria
1951-54 and 1955 Plan
Percent Increase over Previous Year
1955
1 113
1
52 114
1
X53 1~5
1954 116
Plan 11
95
9
_
Gross industrial
production
19
18
12
8.7
7.3
Heavy industry
23
25
23
N.A.
N.A.
Light industry
18
10
4
N.A.
N.A.
The absence of information on crop production in the offi-
cial report on fulfillment of the 1954 plan suggests that there was no
significant improvement in this respect in that year. A subsequent
resolution by the Central Committee of the Bulgarian Communist Party
revealed that the 1954 plans for wheat, rye, barley, and oats were not
fulfilled. 111L8/ An increase in agricultural production of 21.7 percent
over 1954 was planned for 1955. 11 This goal is very high, consider-
ing the past performance of the agricultural sector of the economy.
The 1955 plan for capital investment stressed the develop-
ment of agriculture and the electric power industry. Whereas capital
investment in the nationalized economy was to increase 13.4 percent
over the officially expected results for 1954, state capital invest-
ments in agriculture. and the electric power industry were planned to
increase by about 46 percent and 39 percent, respectively. Planned
investments in coal mining, housing construction, and cultural facili-
ties, on the other hand, were scheduled to rise by less than the rate
planned for state investment as a whole. 120
In a speech early in 1955, Vulko Chervenkov, chairman of
Bulgaria's Council of Ministers, referred to agricultural development
as "our main task and duty at the present moment" and then proceeded
to link improvement in agriculture with "a preponderance of heavy
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industry development." 121 This was a familiar line throughout the
Satellites in 1955; neither in Bulgaria nor in the other countries
does it appear to signify any substantial change in the "new course"
as implemented in 1954.
2. Trends in the State Budget.
Scheduled revenues -and -expenditures in the state budget
for 1955 were almost the same as those planned for 1954 but were
somewhat higher than actual revenues and expenditures for 1954 (see
Table 14). The planned distribution of expenditures was approximately
the same as that planned for 1954, with slightly smaller shares of
total expenditures allocated to the national economy, defense, and
administration and somewhat larger shares allocated to social welfare
and other expenditures.
Revenues and Expenditures in the State Budget of Bulgaria
1952-55
1952 122 :L953 12
1954 124
1955 12
Budget Category
Actual
Actual
Actual
,.Plan
Revenues
16.0
17.9
17.1
18.2
Expenditure-s
14.3
15.8
16.7
17.3
Percent of Total (Planned)
1953 12E/
1954 22V
1955 128
Expenditures
100.0
100.0
100.0
National Economy
58.4
55.6
54.6
Rural Economy
11.0
14+.4
N.A.
Industry and Other
47.4--
41.2
N.A.
Defense
Social Welfare, Educa-
11.6
11.4
11.1
tion, and Culture
19.4
21.4
22.1
Administration
(10
6
4.5
4.2
Other
.
(
7.2
8.0
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H. Albania.
1. Economic Plan for 1955.
The construction of a number of industrial plants in Albania
since the war has resulted in very large percentage gains in industrial
output from year to year, since the country previously has had few factories
of national importance. The fact remains, however, that Albania is a small,
backward, essentially agricultural area which has barely begun the process
of industrialization. Even the industrial development which has been
carried out so far has depended heavily on the receipt of economic and
technical assistance from the USSR and other Satellites.
The target for Albanian industrial production in 1955 was
initially announced in January as a 15-percent increase over 1954. 12
A subsequent speech by Premier Shehu indicated, however, that by the end
of March 1955 this goal had been reduced to 10 percent. 130 The revised
goal for 1955, the last year of the Five Year Plan, was therefore slightly
lower than the increase of 10.7 percent reported for the industrial sec-
tor in 1954 131 and well below the claimed rates of growth of 20 percent
for 1952* and .22 percent for 1953. 133
Like the other Satellites, Albania had little to say in its
plan fulfillment announcement about agricultural output in 1954, a year
of "unfavorable weather conditions for agriculture." No information on
the output or per hectare yields of crops was given, although a small
increase over 1953 in state collections of food grains was indicated.
The numbers of most types of livestock were stated to be slightly higher
than in 1953. The plan for agriculture in 1955 was very optimistic.
Production of bread grains was scheduled to rise by nearly 38 percent
over 1954, and the targets for cotton, sugar beets, and tobacco were
still higher, in percentage terms. L 34J the objective for indus-
try is feasible, the agricultural plan probably can be dismissed as wi.sh~-
ful thinking.
2. State Budget for 1955.
The Albanian budget for 1955 provided for relatively large
increases in revenues and expenditures over the results for 1954 (see
Table 15**). The planned increase in total expenditures, for example,
Calculated from data in source 132/.
Table 15 follows on p. 40.
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amounted to 29 percent, or 2.6 billion leks. It should be noted, how-
ever, that the total expenditures of 9 billion leks in 1954 were 900
million leks less than the planned amount. Planned expenditures
may likewise have been underfulfilled in. 1955. Although spending on
national defenseand social and cultural activities was to rise less
than total expenditures, and-spending on. agriculture somewhat more
than the total, the distribution of budget expenditures planned for
1955 generally resembled that for 1954.
Table 15
Revenues and Expenditures in the State Budget of Albania
1954-55
Billion Leks
Planned
1954
1955
Percent Increase
Budget Category
Actual J
Plan b
1954 to 1955 J
Revenues
10.1
12.3
22
Expenditures
-9.0
11.6
29
Financing the People's Econo
my 3.5
4.6
30
Industry and Mines N.A.
2.1
N.A.
Agriculture 0.9
1.2
35
Cultural-and Social 1.8
2.2
18
National Defense 1.1
1.4 J
25
1
8
Other 2.6
3.4
31
a. Calculated from data in the other two columns (before rounding).
b. Source 116j, except as indicated.
c. Calculatedfrom data in source L31/.
II. Resource Base of the Economies.-
A. Population and Labor Force.
1. Total Population.
The population of the European Satellites has been increasing
since 1948 at a rate of approximately 1 percent a year and now exceeds
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93 million persons. During 1948-54 the growth was most rapid in Albania
and Poland, with increases of 11 and 12 percent, respectively, as com-
pared with 5- to 8-percent increases in the other Satellites. The ex-
ception to the general rule is East Germany, which suffered a decline
in population up to 1953 because of large-scale defections to the West
and has had an almost stationary population since then (see Table 16).
The percentage distribution of the total Satellite population among the
several countries changed little, however, from 1948 to 1954, with Poland
continuing to rank first in population.
Table 16
Population of the European Satellites
Midyear 1948, 1950, and 1952-54
Countr _____
1948
1950
1952
1953
195+
Albania
1,175
1,200
1,270
1,290
1,310
Bulgaria
7,100
7,252
7,312
7,375
7,473
Czechoslovakia
12,120
12,400
12,640
12,760
12,892
East Germany
19,100
18,800
18,200
17,900
17,900
Hungary
9,130
9,293
9,554
9,617
9,690
Poland
23,850
24,773
25,735
26,247
26,764
Rumania
15,980
16,333
16,757
16,971
17,194
Total
88,455
90,051
91,468
92,160
93,223
2. Labor Force.
a. Total Labor Force.
The total labor force of the Satellites in 1954 was
43,720,000 persons, or about 661,000 more persons than in 1953. The
labor force constituted 46.9 percent of the total population in 1954,
compared with 42.6 percent of the total in 1948 (see Table 17*). The
* Table 17 follows on p. 42.
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labor forces of Rumania and Poland were the largest in relation to their
populations in 1954, amounting to over 1+9 percent of their respective
populations. In East Germany, Hungary,-and Czechoslovakia, the ratios
approximated 44 percent, with Albania and Bulgaria falling between these
limits.
Table 17
Labor Force of the European Satellites
Midyear 1948, 1950, and 1952-54
Total Labor Force (Thousands)
Country
1948
1950
1952
1953
1954
Albania
537
554
573
582
590
Bulgaria
3,495
3,503
3,457
3,459
3,492
Czechoslovakia
5,245
5,310
5,475
5,575
5,725
East Germany
6,550
7,100
7,575
7,675
7,850
Hungary
3,625
3,955
4,150
4,250
4,260
Poland
10,900
11,895
12,745
13,000
13,260
Rumania
7,300
7,865
8,275
8,518
8,543
Total
37,652
40,182
42,250
43,059
43,720
Labor Force as Percent of Total -Population
Country
1948
1950
1952
1953
1954
Albania
45.7
46.2
45.1
45.1
45.0
Bulgaria
49.2
48.3
47.3
46.9
46.7
Czechoslovakia
43.3
42.8
43.3
43.7
44.4
East Germany
34.3
37.8
41.6
42.9
43.8
Hungary
39.7
42.6
43.4
44.2
44.0
Poland
45.7
48.0
49.5
49.5
49.5
Rumania
45.7
48.2
49.4
50.2
49.7
European Satellites
42.6
44.6
46.2
46.7
46.9
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b. Agricultural and Nonagricultural Labor Force.
As the European Satellites pushed industrialization at a
rapid pace, the nonagricultural labor force also increased rapidly, whereas
the agricultural labor force decreased slightly. Not only the natural in-
crease in the population but also the recruitment of women not previously
in the labor force and the transfer of agricultural labor facilitated the
growth of the nonagricultural labor force.
Nonagricultural labor in all the Satellites increased by
almost 50 percent between 1948 and 1954, whereas during the same period
the agricultural labor force decreased by 5 percent. The emphasis on
agriculture which all the Satellites introduced with the "new course"
in 1953 served only to halt the decline of the agricultural labor force
in 1954. The nonagricultural labor force continued to rise in 1954,
although at a slower rate. Czechoslovakia is the only European Sat-
ellite that increased its agricultural labor force in 1954 (see Table
18*).
Fifty percent of the labor force of the European Sat-
ellites was engaged in agriculture in 1954, compared with 61 percent
of the total in 1948 (see Figure 2**). In three countries, however,
the nonagricultural labor force is now well over one-half of the total.
These are East Germany (73 percent of the total labor force), Czecho-
slovakia (65 percent), and Hungary (57 percent).
B. Land Resources and Utilization.
Two of the European Satellites, Poland and Rumania, contain 54
percent of the total area of the European Satellites and about the same
percentage of the agricultural land area. Poland by itself has more
than one-third of all the agricultural land in the European Satellites.
The ratios of agricultural land to total area presented in
Table l9* indicate a utilization of land for agriculture that varies
from 41.8 percent of the total area in Albania to 79.1 percent in
Hungary. The'possibility of diverting unused land to use in agriculture
Table 1"9 follows on p. 44
Following p. 44.
Table 19 follows on p. 45.
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S-E-C-R-E-T
Table 18
Agricultural and Nonagricultural Labor Force
of the European Satellites
Midyear 1948, 1950, and 1952-54
Agricultural
Country
1948
1950
1952
1953
1954
Albania
479
465
456
452
448
Bulgaria
2,700
2,625
2,525
2,500
2,500
Czechoslovakia
2,200
2,080
1,975
1,950
1,990
East Germany
2,200
2,12.5
2,100
2,100
2,100
Hungary
2,025
1,925
1,850
1,850
1,825
Poland
7,400
7,350
7,275
7,250
7,225
Rumania
6,000
5,925
5,825
5,775
5,725
23,004
22,495
22,006
21,877
21,813
Nonagricultural
Country
1948
1950
1952
1953
1954
Albania
58
89
117
130
142
Bulgaria
795
878
932
959
992
Czechoslovakia
3,045
3,230
3,500
3,625
3,735
East Germany
4,350
4,975
5,475
5,575
5,750
Hungary
1,6oo
2,030
2,300
2,400
2,435
Poland
3,500
4,545
5,470
5,750
6,035
Rumania
1,300
1,940
2,450
2,743
2,818
Total
14,648
17,687
20,244
21,182
21,907
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 SECRET
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DISTRIBUTION OF LABOR FORCE, 1948, 1950, AND 1954
Agricultural
50%
56%
61%
Non-
Agricultural
44%
39%
72%
76% 77% 75%
28%
23% 25%
35%
39%
42%
65%
61%
58%
27%
30%
73%
70%
66%
57%
51%
44%
46%
38%
32%
Figure 02
11%
0
1948 1950 1954 '48 'S0 'S4 '48 'S0 'S4 '48 '50 '54 '48 'S0 '54 '48 'S0 'S4 '48 'S0 '54 '48 'S0 '54
ALL SATELLITES ALBANIA BULGARIA CZECHOSLOVAKIA EAST HUNGARY POLAND RUMANIA
GERMANY
SECRET
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
c O
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
exists only in Albania, where the percent of unused but potentially produc-
tive land is 8.9 percent of the total area. For the other countries the
only possibilities lie in the reclamation of barren lands (see built-up
areas in Table 19).
There is evidence that the postwar patterns of land utilization
have undergone considerable changes because of land reform programs and
government confiscations. Present estimates of land used for agriculture
include land that was formerly under cultivation but is now carried as a
reserve.
Estimates of the agricultural land remaining untilled in the
European Satellites-are shown in Table 20. It would, of course, in-
crease agricultural; production if the European Satellites could get
their state reserve lands into production.
Estimated Agricultural Lands Not Now Tilled
in the European Satellites
Thousand. Hectares
Albania
N.A.
Bulgaria
N.A.
Czechoslovakia
200-300
East Germany
Boo
Hungary
400-500
-Poland
8oo
Rumania
800
Total
3 ,1000-3 L0
Reserves of brown coal and lignite are found in considerable
quantities in all the European Satellite countries except Albania (see
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Table 21). Only Poland and Czechoslovakia, however, have sizable re-
serves of haxd coal. The brown coal found in East Germany and in
Hungary is of poor quality and for many purposes requires processing
before use.
Estimated Amounts and Approximate Life of Reserves of Coal
in the European Satellites a/
1954
Hard Coal
Brown Coal and Lignite
Country
Tons
Million
Life
(Years)
Tons
(Million)
Life
(Years)
Albania 140
N.A.
N.A.
1
N.A.
Bulgaria 41
30
50
1,750
150
Czechoslovakia 142
5,470
270
4,750
200
East Germany 2,43
16
5
20,300
100
Hungary 1
160
45
1,040
45
Poland
112,000
1,000
18,000
2,500
Rumania
31
60
2,800
600
a. The life of the reserves is calculated on the basis of present
rates of extraction and rough estimates of recovery factors.
2. Petroleum.
Estimates of reserves of petroleum in the European Satellites
are scant and of dubious nature. An estimate in World Oil 14 for all
European Satellites except Bulgaria indicates that the Satellites as a
whole add but little to the large oil reserves of the USSR. The 1954
European Satellite total of 761 million barrels is to be compared with
10 billion barrels of estimated reserves in the USSR (see Table 22*).
* Table 22 follows on p. 48.
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S-E-C-R-E-T
Table 22
Estimated Reserves of Crude Petroleum in the European Satellites
and the USSR 148]
1954
Country
Million
Barrels
Percent
of World
Percent of Total
Satellites
Albania
30
0.02
3.9
Czechoslovakia
9
0.01
1.2
Hungary
100
0.07
13.1
Poland
22
0.01
2.9
Rumania
600
0.39
78.9
Total European Satellites aJ
21
0 50
100.0
USSR
10,000
6.57
a. Exclusive of Bulgaria, whose reserves probably do not add more
than 2 percent of the total.
Rumania has the most extensive petroleum reserves, account-
ing for almost 80 percent of the Satellite total. Hungary has reserves
amounting to about 13 percent _of the Satellite total. Reserves of other
European Satellites are small.
The discovery of extensive new oil-bearing strata in Rumania
was announced in early 1954, and, at present, 70 percent of that country's
oil production is from new fields or from extensions of old. 14 With
a seemingly large geologic potential for new oil discoveries, exploratory
drilling is continuing in Rumania. 150/ Hungary, too, has markedly in-
creased petroleum output on account of the development and exploitation
of recent discoveries in Transdanubia and east of the Danube.,l 1 Bul-
garia has many unexploited deposits. Almost the whole northern half
of Bulgaria is an "area-of known economic oil deposits," and almost the
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
whole southern half an "area of possible economic oil deposits." L52
Czechoslovakia is poor in oil reserves; these are largely confined to
the oilfields on the Moravian-Slovakian border. East Germany produces
little or no crude oil on a sustained basis. Poland's exploratory work
in the Carpathian Mountains apparently has resulted in doubling exist-
ing reserves of natural gas but not in the discovery of new oil depos-
its. 1 3 Some oil and gas fields exist in Galicia. Albania has made
no new discoveries and is unlikely to find any new, large, or highly
productive deposits. 154
The exploitation of the reserves in the less industrialized
Satellites has been limited by the lack of new machinery and spare parts
and the scarcity of trained personnel. This is the case in Albania, Bul-
garia, and to some extent in Hungary. Rumania is now reported to be
self-sufficient in the manufacture of oilfield equipment.
D. Minerals.
.1. Iron Ore.
With the exception of Bulgaria, which exports most of its
iron ore output to other European Satellites, the Satellites are incap-
able of satisfying their own requirements for iron ore (see Table 23*).
This deficiency is manifested both in the-ore's generally low grade,
which causes numerous processing difficulties, and in the quantities
of ore produced. Although Czechoslovakia has the largest reserves of
iron ore among the Satellites, its degree of self-sufficiency in ore
production declined from 56 percent in 1949 to.36 percent.in 1954,_____
largely as a result of the rising demand for steel. The ratio of do-
mestic production to total requirements of iron ore in the other coun-
tries in 1954 ranged from 31 percent in Poland to 65 percent in East
Germany. Because of the relatively low iron content of the ores mined
in most of the Satellites, the degree of self-sufficiency is even lower
if iron content rather than total ore tonnage is considered. This is
particularly true in Hungary, where the domestic mines provided one-third
of the total iron ore tonnage used in 1954 but only 15 percent of the
iron content of this tonnage.
All of the Satellites have taken measures to reduce their
iron ore deficiencies. Their iron mining industries have been expanded
in an effort to meet the increasingly heavy demands for iron and steel.
* Table 23 follows on p. 50.
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S-E-C-R-E-T
Table 23
Estimated Reserves of Iron Ore in the European-Satellites
1954
Total Reserves
(Thousand
Iron Content
Estimated Per-
cent of Self-
C_ountry
Metric Tons)
(Percent)
Sufficiency _a/,
Albania
17,000
N.A.
Bulgaria
4,300
N.A.
100
Czechoslovakia
400,000
33
36
East Germany
51,000
25-35
65
Hungary
24,100
22-31
33
Poland
216,700
30
31
Rumania
29,700
40
56
a. Based on ore tonnage. With the exception of Bulgaria, the
self-sufficiency of these countries is lower than is indicated
by ore tonnage computations. For example, the degree of self-
sufficiency based on the iron content of the ore supply was
about 48 percent for East Germany and 15 percent for Hungary
in 1954.
Nevertheless, progress along this line has not been entirely satis-
factory. As a result, the Satellites continue to rely heavily upon
imports of low-grade ore from the USSR, althoughsome imports from
Communist China and the non-Bloc area also have been utilized.
2. Manganese.
Bulgaria and Czechoslovakia produce a small quantity of
manganese ore. All reserves in Czechoslovakiaare of very low grade,
averaging 17 percent metal content. The extent of these reserves is
not known, but they probably are not large. The steel industry in
Czechoslovakia requires imported ores of metallurgical grade for
making ferromanganese and other uses. Low-grade ores are considered
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adequate for pig iron production. On a metallic basis, imports amount
to approximately 50 percent of Czechoslovak manganese requirements.
The chief manganese ore reserves in the European Satellites
are found in Hungary and Rumania. The Hungarian reserves, the largest
in Europe, are estimated at 20 million metric tons. They are, however,
low in metal content (20 to 28 percent metal). Hungary has a modern
and mechanized manganese ore industry and recently has introduced a
new concentration process which increased the recovery rate to about
75 percent. Part of the Hungarian production is exported. At the
present rate of exploitation, Hungary's manganese ore will last about
200 years. Rumanian reserves, estimated at 4.5 million metric tons,
are sufficient to supply its iron and steel industry for many years.
Approximately one-half the total ore produced in Rumania is exported.
Rumanian ores vary from 15 to 45 percent metal content.
East Germany and Poland have no manganese ore deposits.
Both countries import all the requirements of their iron and steel
industries.
3. Copper.
Although the European Satellites import substantial quanti-
ties of copper in varying forms, they nevertheless possess copper ore
reserves sufficiently large to be of economic significance. Those of
East Germany and Poland are of principal importance. The reserves in
the Mansfeld Basin in East Germany, however, are nearly exhausted.
Estimates of principal reserves are given in Table 24.*
Albania and Rumania have relatively small reserves. Bul-
garia's ore areas are constantly being searched for new deposits, but
no substantial expansion is anticipated. Czechoslovakia and Hungary
have no significant copper reserves.
4. Lead and Zinc.
The principal lead and zinc ore reserves in the European
Satellites are found in Poland and Bulgaria. Poland is one of the
world's important producers of zinc, and its lead production is suffi-
cient to meet domestic requirements. Indications are, however, that
the metal content of these ores is gradually decreasing as the better
grades of ore become depleted.
* Table 24 follows on p. 52.
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S-E-C-R-E-?T
Table 24
Principal Reserves of Copper in East Germany, 1951
and Poland, 1.955
Copper Ore
(Million
Copper Metal
Life in Years
at Present Rate
Location
-Metric Tons)
(Metric Tons)
of Production
East Germany (as of 1951)
39.5
892,400
Mansfeld Basin
12.2
224,200
5
Sangerhausen Basin
27.3
668,200
25
Poland (as of 1955)
160
-N.A.
50
Poland possesses about a 25-year supply at the 1952 rate of
production. The ore reserves of 25.8 million metric tons contain a 10
to 11 percent zinc! content and a 1.5 to 2 percent lead content. Bul-
garia's reserves are reported to be large and of good quality. Output
of both lead and zinc will probably increase. Reserves of minor signifi-
cance are located in East Germany, Czechoslovakia, and Rumania.
5. Bauxite.
The only European Satellites with ore reserves of commerZial-
grade bauxite are Hungary and Rumania. Hungarian reserves have been
estimated at over 300 million tons of commercial-grade ore. These
are the largest bauxite reserves in Europe -and among the three largest
in the world. The ore is amenable to low-cost mining. An extensive
unexplored area of potential importance is believed to exist northeast
of the presently worked ore formation. Rumanian bauxite reserves are
estimated at 30 million tons of workable-grade ore, roughly equivalent
to that of the USSR or the US.
6. Antimony.
Antimony reserves in the European Satellites are confined to
Czechoslovakia andEast Germany. Czechoslovakia is estimated to have
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1.5 million tons of ore containing 35,000 tons of recoverable metal.
These reserves are of high grade. East German reserves are small and
were expected to be exhausted by the end of 1955.
7. Other Minerals.
Tin-bearing ores of extremely low grade are found in East
Germany. Production is high-cost and is subsidized.
Mercury ore reserves of limited quantity and low grade are
found in Czechoslovakia and Rumania.
East Germany and Bulgaria produce fluorspar, but only East
Germany has large reserves. These are estimated to be adequate for about
10 to 15 years' production at the current rate.
All the European Satellites produce pyrites. Hungary has
only small depositb, but the other European Satellites have reported
reserves of considerable quantities. Estimated reserves based on
fragmentary reports are presented in Table 25.
All the European Satellites have potential supplies of mag-
nesium ore. The high degree of technology required and the lack of a
consuming market for large quantities of magnesium metal has retarded
magnesium ore development. East Germany had an important magnesium
industry until the end of World War II, but it has not been maintained
in the postwar period.
Estimated Reserves of Pyrites in the European Satellites
1954 J
Country
Quantity
(Million Metric Tons)
Life in Years at
Present Rate of Production
Albania
5.0
N.A.
Bulgaria
12.0
N.A.
Czechoslovakia
1.5
15
East Germany
N.A.
10-15
Poland
3.0
25-30
Rumania
9.0
30-40
a. Approximate date.
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
III. Trends in Gross National Product and Its Components.*
A. Comparison of the Gross National Products of the European
Satellites** and the USSR.
The value of production of all goods and services (gross national
product, or GNP) in the European Satellites in 1954 is estimated at about
* To check the validity of official European Satellite statements on the
rate of growth in economic activity, an attempt has been made to construct
an independent series of data on economic production for each Satellite
(for a detailed explanation of the methodology of construction of these
estimates, see source 156 and Appendix C of this report). The major step
in this checking process has been the use of independently calculated pro-
duction indexes. These indexes, when linked to prewar estimates of GNP in
terms of 1951 US dollars, also provide estimates of GNP in the postwar pe-
riod which permit international comparisons of economic strengths. Further-
more, these GNP estimates provide -a more comprehensive measure of national
economic activity than the restricted national income data which are pub-
lished by the Satellite governments.
The industrial production indexes which were constructed as a step in
calculating the GNP estimates differ substantially, however, from official
Satellite indexes of industrial output. Some differences are to be expected
since the official Satellite indexes represent the gross value of production
whereas the constructed indexes are computed. on a value-added basis. With
the exception of the constructed industrial production indexes for 195+,
which use the officially announced rates of increase, the differences be-
tween the twosets of indexes have not been reconciled or explained. Never-
theless, it is thought that the discrepancies between the official Satellite
indexes and the constructed indexes indicate that official announcements of
rates of growth in industrial production are misleading. On the other hand,
the reliability of the basic production estimates and the inadequate cover-
age of the data embodied in the independent indexes are such that the con-
structed indexes cannot be considered accurate indicators of annual rates of
economic growth in the European Satellites. The constructed indexes are,
nevertheless, not devoid of usefulness. They probably possess sufficient
reliability to be used for the purpose of long-term intertemporal compari-
sons. They also provide the only available means of deriving dollar values
for total economic activity by which international comparisons are made
possible.
Some of the independently constructed indexes are presented in Appendix
A, Table 50. The indexes for agricultural production, which are thought to
be a reliable portrayalof the economic activity of the Satellites' agricul-
tural sectors, are introduced in Section V. The indexes for the construction,
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49.4 billion 1951 US dollars (see Table 26*). Thus the total Satellite
GNP was about two-fifths that of the USSR in 1954. This is the same
ratio as in 1948, the first postwar year for which estimates are avail-
able, while before World War II, in 1938, Satellite GNP was almost three-
fifths of the Soviet GNP. The decline in this ratio from 1938 to 1948 is
evidence of the extensiveness of wartime destruction in the Satellites
and the burden of both reparations and postwar confiscation of property
by the USSR. Nevertheless, in the postwar period, even though the USSR
has been developing very rapidly, the rapid rate of growth of the Sat-
ellite economies has enabled that region to continue to maintain the
same relative position in terms of its economic output.
B. Distribution of Gross National Product by Country.
A comparison of over-all production figures is of some use in
evaluating the economic strengths of the various countries. By this
measure the economic capabilities of the various Satellites differ
markedly. Poland generated the greatest economic output among the Sat-
ellites. In 1954 its GNP was 13.2 times that of Bulgaria; in 1938
approximately the same relationship obtained (see Table 27*). The
other Satellite GNP's ranged between those of these two countries.
East Germany ranked slightly lower than Poland, Hungary and Rumania
had slightly greater GNP's than did Bulgaria, and Czechoslovakia was
almost exactly between these two modal groupings. The dispersion was,
of course, much less in the immediate postwar period because, in gen-
eral, the more advanced countries were bound to suffer relatively
greater adverse effects from the prolonged drains of warfare than were
the less well developed countries.
trade, and services sectors are omitted from the report entirely since
they are based on relatively unsatisfactory data or assumptions of
limited validity.
** No quantitative estimates of Albanian GNP have been made, and, con-
sequently, discussion of that country is not included in this section.
However, it has been suggested that Albania's GNP is about 200 million
1951 US dollars. 12/
* Tables 26 and 27 follow on p. 56.
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S-E-C-R-?E-T
Table 26
Comparison of the Gross National Product of the European Satellites
and the USSR J
1938, 1948, and 1954
USSR
European Satellites (Billion 1951
European Satellites
Year
(Billion 1951 US $)
US
(Percent of USSR)
-
1938
44.5
75
59
1948
32.4
78
42
1954
49.4
123
4o
a. This comparison should be looked. upon as rather rough. Euro-
pean Satellite and Soviet GNP's are not completely comparable owing
to differences-in the methodology used in deriving the estimates.
b. Excluding Albania.
Table 27
Gross National Products of the European Satellites
1938,
1948, and 1954
Billion 1951 US
Year
Bulgaria
Czechoslovakia
East Germany
Hungary
Poland
Rumania
1938
1.0
7.3
16.1
2.-5
14.5
3.1
1948
1.0
6.8
9.0
2.0
11.0
2.6
1954
1.3
9.2
15.8
3.0
17.1
3.0
Figure 3* shows the relative contribution of each Satellite
to the total GNP of the area. In both 1938 and 1954, Poland, East Ger-
many, and Czechoslovakia accounted for approximately 85 percent of the
value of the total output of the Satellites. For the reason mentioned
* Following p. 56.
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SECRET Figure ^3
PERCENTAGE DISTRIBUTION OF GROSS NATIONAL
PRODUCT, BY COUNTRY, 1938, 1948, AND 1954
Bulgaria
Hungary
Rumania
5.6%
7.0%
Czechoslovakia 16.4%
Poland 32.6%
2.2% 3.2%
6.2%
8.0%
East Germany 36.2%
NMI
SECRET
*Excludes Albania
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above this proportion was somewhat reduced in 19+8 when the less well
developed Satellites -- Hungary, Rumania, and Bulgaria -- gained, as a
group, an increased share of the total GNP. (An interesting but entirely
expected feature of the changes in the share of total Satellite output
contributed by each country is that East Germany's share suffered the
greatest dip in 19+8 relative to 1938 and has made the greatest recovery
since that time.) Nevertheless, in broad terms, as is demonstrated by a
comparison of 1938 and 1954, the relative abilities of the various Sat-
ellites to generate GNP have not changed much as a result of the Sovieti-
zation of their economies. Rather, the differences that are, and have
been, apparent are largely a reflection of the varying resource endow-
ments of the countries. Eventually, of course, variations in investment
activities may alter the existing relationships. But even in this
instance the resource bases would tend to set limits on the extent of
probable change.
C. Comparisons of Prewar and Postwar Gross National Products.
The extent of changes in the GNP's of the European Satellite
economies can be-gauged by a comparison with changes in the GNP's of
the USSR, France, West Germany, and Italy. Such a comparison, however,
is only approximate inasmuch as the individual years and individual
countries may have been conditioned by a different set of economic
factors, such as, the magnitude of wartime preparations or the effects
of the depression in 1938. Nevertheless, subject to this caveat, Table
28* shows that, except for Bulgaria, each of the Satellites suffered a
diminution of output in 19+8 relative to 1938. This reduction in GNP
ranged from 45 percent for East Germany to 7 percent for Czechoslovakia
and averaged 27 percent for the Satellites as a whole. On the other
hand, of the three Western European countries being considered, only
West Germany endured as great a relative loss in output, and in the
USSR a gain of 4 percent was experienced.
Between 1938 and 195+ the economy of the USSR made astonishing
strides and completely overshadowed the successes achieved in the three
Western European countries. The gains made by the Satellites over the
same period have not even compared well, on the average, with those
observed in West Germany, France, and Italy. Nevertheless, this latter
comparison obscures tremendous accomplishments by the Satellites in more
recent years. For the period 19+8 to 195+ the economic activity of the
Table 2 follows on p. 58.
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S-E-C-R-E-T
Table 28
Changes in the Gross National Products
of the European Satellites, the USSR,
France, West Germany, and Italy
1938-48 and 1938-54
Country
1938 to 19+8
1938 to 1954
Bulgaria b
5
26
Czechoslovakia b
- 7
26
East Germany
-44
-2
Hungary
-20
20
Poland b
-24
18
Rumania
-17
-3
European Satellites jJ
-27
11
USSR
4
64
France D8
0
36
West Germany L
--34
38
Italy 160
- 9
32
a. Excluding Albania.
b. Calculated from unrounded data rather than from
Tables 26 and 27.
Satellites made remarkable gains in over-all production. In percentage
terms, these gains exceeded those made by France and Italy during the
same period and were of about the same order of magnitude as the in-
crease achieved by the USSR.
D. Gross National Product Per Capita.
Figures on per capita GNP provide a good approximation of the
standard of living which an economy is capable of supporting in the
short run. As a measure of the standard of living which the people are
actually enjoying it is much less satisfactory, because there is no
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attempt to show what part of the GNP is being allocated to investment
and what part to consumption. Thus the per capita GNP of the Satel-
lites, where a greater portion of the national output is earmarked for
capital expansion than is the case in most Western countries, would
tend to give an impression of standard-of-living capabilities which
would err on the high side. On the other hand, for numerous reasons
it.is probable that Western-type derivations of GNP estimates for under-
developed economies, such as some of the Satellites, would tend to
understate the actual level of production. Because of this underesti-
mation, then, the per capita GNP figures are apt to give a low impress-
ion of actual conditions. The extent of cancellation resulting from
these two factors is indeterminate. The figures presented below give
a qualitative rather than a quantitative evaluation of economic welfare
possibilities.
.Despite a decline in population for the area as a whole, the
per capita GNP of the European Satellites fell in 1948 relative to
1938 (see Table 29*). Consequently the decline can be attributed to
the smaller GNP which was registered for the whole region. Individually,
the Satellites fared diversely, as might be expected. Bulgaria and
Poland had about the same per capita GNP's in 1948 as in 1938. In Bul-
garia a slight increase in GNP did not quite accommodate the increase
in population; in Poland, only the enormous population decline prevented
a drastic decrease in ability to create economic welfare. Czechoslovakia
was able to increase its per capita GNP as its national output fell rel-
atively less than its population. Hungary and Rumania suffered moderate
drops in per capita GNP, as a result mainly of declines in total pro-
duction inasmuch as their populations remained nearly stable. On the
other hand, in East Germany a huge decrease in ability to support living
standards was attributable to both a large drop in GNP and a sizable
growth in population.
Between 1948 and 1954, however, all of the Satellites gained in
their abilities to support higher standards of living. The East Germans
realized the greatest relative increase, followed by Hungarians, Poles,
and Czechoslovaks in that order. All of these increases were due in
large measure to gains registered by productive activities, but in East
Germany a population decrease was also a contributing factor. As a
result of the gains since 1948, by 1954 the individual European Satellites
* Table 29 follows on p. 60.
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S-E-C-R-E-T
Table 29
Per Capita Gross National Products
of the European Satellites a
1938, 1948, and 1954
1 1 us
Bulgaria
153
148
169
Czechoslovakia
500
558
712
East Germany
970
469
883
Hungary
273
219
311
Poland
465
461
64o
Rumania
195
161
176
European Satellites
474
370
537
a. -Calculated-from unrounded. data rather than
from Tables 26 and 27. Excludes Albania.
had resumed their prewar ranking in terms of GNP per capita: East
Germany, Czechoslovakia, and Poland were at the upper end of the
scale; Hungary was in the middle; and Rumania and Bulgaria were at
the bottom. Nevertheless, although East Germany has exhibited marked
improvement, it and Rumania have economic welfare potentials which
are still below prewar levels.
E. Distribution of Gross National Product by Sector of Ori-gin.
The effects of World War II and. postwar recovery and of Sovieti-
zation upon the economic structures of the European Satellites are made
apparent.in Figure 4,* although the picture presented is only of the
crudest -sort because of the methods used in estimating value added by
the trade-and the services sectors.** It is evident that in 1948 by
comparison with 1938 several of the Satellites had made modest progress
* Following P. 60.
** See source 161 for a discussion of the methods used in deriving
estimates of the economic contributions of the trade and services
sectors.
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SECRET
PERCENTAGE DISTRIBUTION OF GROSS NATIONAL PRODUCT,
BY SECTOR OF ORIGIN, 1938, 1948, AND 1954
100%-
Transportation and 4.8%
Communications
Agriculture 26.9%
23.1%
2.0% 3.8%
4.8%
26.0%
27.6% 23.2%
}
1.0%
1.0%
4.9%
7.2% 9.0"
35.0% 23.4%
31.6%
32.0% 47.1%
39.9%
4.1% 5.2% 6.5%
Figure 04
31.2% 25.8%
35.3%
3.5% 2.8% 3.0%
27.3% 26.4% 23.9%
19.3%
17.0% 15.7% 16.0% 15.3% 13.3%
1938 1948 1954 '38 '48 '54 '38 '48 '54 '38 '48 '54 '38 '48 '54 '38 '48 '54 '38 48 '54 0
ALL SATELLITES* BULGARIA CZECHOSLOVAKIA EAST GERMANY HUNGARY POLAND RUMANIA
SECRET *Excludes Alboni0
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on the road of industrialization: Czechoslovakia, Poland, and Hungary
had increased shares of their GNP's generated by the industrial sector
and decreased shares contributed by agriculture; in Rumania and Bulgaria
the share of GNP originating in the industrial sector remained about con-
stant; and in East Germany, probably because of the tardy recovery of its
industry, the share coming from the industrial sector fell drastically.
Between 1948 and 1954, however, the Satellites displayed marked
progress toward industrialization until in 1954 all except Bulgaria had
attained an economic structure in which industrial activity preponder-
ated. In East Germany, Hungary, and Czechoslovakia, industrial produc-
tion represents about half of the economic output, and even in Bulgaria,
the least industrialized of the Satellites, industrial output makes up
32 percent of GNP. Thus the period since 1948 has been one in which,
under the aegis of the Communist regimes, the Satellites have changed
from economies which could be characterized, with the exceptions of
East Germany and Czechoslovakia, as either predominantly agricultural
in orientation or slightly industrialized, agricultural societies to
economies which are for the most part industrial in orientation or
industrial with sizable agricultural components.
IV. Survey of Subsectors of Industry.*
A. Energy.
1. Electric Power.
In view of the demands made upon the power industry by the
rapid industrialization of the European Satellites, it is not surprising
* This section attempts to illuminate, in brief scope, the weaknesses
and strengths of various industries in the European Satellites, in the
hope that such a description will contribute to an evaluation of their
future production possibilities. As a general rule, industry groups and
commodities within industry groups have been selected for discussion on
the basis of their economic importance to the Satellite group as a whole
or on the basis of their strategic impact on the Bloc war potential. No
effort has been made to include industries or commodities which may be
of importance to an individual Satellite nor, for that matter, is there
any assurance that all industries of significance to the Satellite group
as a whole have been discussed.
Data on the production of the industry groups discussed in this sec-
tion do not appear in the presentation. Instead, 1954 output figures
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that shortages of electric power and related plan failures involving
production of power and facilities expansion programs are reported
frequently. The magnitude of the Satellite aspirations in the elec-
tric power field is more apparent when it is realized that the electric
power industry -as'a whole recorded a substantial achievement--- an
average annual rate of increase of about 11 percent-from 1948 to 1954.
This compares with an average annual rate of 14.3 percent in the USSR
for the same period and 8.4 percent for the US, in a period in which
US electric utility companies were undertaking an expansion of power
capacity somewhat above their long-term growth trend.
Because of topographical conditions, the Satellite coun-
tries are primarily dependent upon the thermal generation of electric
power. The resource base for this is provided to a large degree by
indigenous supplies of coal. Petroleum is a minor source of fuel for
power in the European Satellites, with the exception of Albania and of
-Rumania, which generates about half its power from petroleum and gas.
Hydroelectric energy represents only a minor part of electric power
production in the Satellite countries, averaging some 5 to 6 percent
of the total. Because of the relative abundance of fossil fuels and
the high cost per kilowatt-hour of hydroelectric power as well as the
longer construction periods for hydroelectric capacity, it can be ex-
pected that expansion of Satellite power facilities will be largely
directed toward thermal plants.
2. Coal.
Although coal is their major source of energy, the European
Satellites vary as to their endowments of this mineral and their ability
to mine it economically. Bulgaria lacks coking coal but produces an
export surplus of hard coal. Despite primitive mining conditions and
unskilled labor, brown coal and lignite are produced in sufficient
quantities to meet local needs.
have been introduced in tabular form for ease of reference s-ee Appendix
A, Table 51). As an aid to greater appreciation of the economic contri-
bution of each of the Satellites to total Satellite production of selec-
ted commodities discussed in this section, maps showing the geographical
distribution of output in 1954 have been prepared. These maps are found
in Appendix B.
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Czechoslovakia depends upon imports of hard coal, princi-
pally from Poland, to supplement domestic production. There exist,
however, substantial reserves of the best quality hard coals needed
for the making of metallurgical and other cokes. There are also large
reserves of high-quality brown coals, which because of their chemical
properties are invaluable for the production of chemical products of
strategic importance. Nevertheless, in order to have a modern mining
industry, Czechoslovakia would have to renovate, redesign, and reequip
its underground mines for use of electrically operated cutting, loading,
and hauling equipment. At present the Czechoslovak coal industry suffers
mainly from the inefficiency and low productivity of its mine labor force.
East Germany's reserves of hard coal are very small, but there
are ample reserves of brown coal. As a result, a large coal-mining in-
dustry, which produced about 180 million tons of brown coal in 1954, has
been developed. The principal problems are the development and equipping
of new mines and the provision of materials and modern equipment for the
mines now operating.
Poland is richly endowed with coal deposits, having reserves
of hard coal sufficient for roughly 1,000 years' operation and of brown
coal for 2,500 years at present rates of extraction. Despite a shortage
of miners and other labor problems, Poland is the second largest coal
producer in the Satellite area and by far the largest producer of hard
coal alone. The preeminent position of coal in Poland's exports is indi-
cative of the importance of this fuel to Satellite development: coal
shipments, mostly to other members of the Soviet Bloc, make up two-fifths
of the value of Poland's total exports.
Hungary and Rumania display similar conditions as to coal
supplies. Both depend upon imports of coking and hard coal and lack
adequate supplies of skilled laborers and up-to-date equipment. Never-
theless, deposits of low-quality coals are present in abundance.
3. Petroleum.
About 85 percent of the crude oil output of the European
Satellites comes from Rumanian wells, with Hungary producing most of
the rest. All countries, however, with the exception of Bulgaria,
have some output of petroleum products -- either natural or synthetic,
as in the case of East Germany. Extensive exploration has been under-
taken throughout the area, but the likelihood of discovery of large
deposits in regions not already producing is not great.
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The main: difficulties facing the individual petroleum indus-
tries throughout the European Satellites generally are lack of machinery
and spare parts and shortages of skilled and trained personnel. Others
include the shortage of raw materials for construction and repair pur-
poses, the lack of catalysts in the synthetic oil industry, and the
inadequacy of the electric power supply to support an expanded effort
in the refining phase of the petroleum industry. With the possible
exceptions of Poland and Rumania, none of the countries is self-suffi-
cient in the production of drilling equipment. Tubular goods are in
short supply generally throughout the whole area.
On the refining side, the technological problems concerned
with the output of refined products are centered in maintenance and
repair. Much of the equipment is run continuously until breakdown
occurs, and then a patchwork-type repair job is effected so that the
plant can continue operating at a maximum. rate. Particularly in the
synthetic oil industry in East Germany is this practice pronounced.
Perhaps Rumania, with about 65 percent of the refining capacity in
the European Satellites, is least affected by technological-problems
which confront the other..countries.
B. Metals.
1. Iron and Steel.
The principal weakness of the iron and steel industry of
the European Satellites lies in the inadequate supply of essential raw
and alloying materials. Only in chromite! and coke does the Satellite
area as a whole possess a high degree of self-sufficiency, and even for
these materials there is some dependence on imports from the USSR.
Manganese is in short supply in East Germany, Poland, and Czechoslovakia.
As a group the Satellites are able to supply only between one-third and
one-half of their requirements of iron ore. The burden of supplying
iron ore has fallen largely upon the USSR, although some ore is imported
from Communist China and from non-Bloc sources, especially Sweden, Brazil,
and India.
From a technical point of view there are great difficulties
entailed in the adaptation of production techniques to the use of infer-
ior raw materials. Notable technical problems have -arisen in East Ger-
many where the industry has thus far failed to produce satisfactory
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metallurgical coke from local brown coal or to produce high-grade pig
iron in low-shaft blast furnaces. Also, abnormal wear and tear on
facilities has resulted from the unrelenting pressure to meet produc-
tion goals and from the operating uncertainties involved in reliance
on foreign sources for imports of essential raw materials.
None of the European Satellites was able to produce to the
limit of capacity in 1954, primarily because of a shortage of metallics
(pig iron plus scrap). The existence of excess steel-producing capacity
and the announced intentions of the Satellite governments to add to pres-
ent capacity give scope for increasing future output, provided adequate
supplies of raw and alloying materials can be acquired.
2. Copper, Lead, and Zinc.
Production of copper, lead, and zinc is hampered by low la-
bor productivity, resulting to some extent from inadequate mechanization
and in some cases from the necessity of continuing operations in areas
where the nature of the deposits makes their exploitation difficult and
costly, such as the copper and lead deposits of East Germany. Although
each producing European Satellite country has attempted to increase its
output of copper, lead, and zinc from indigenous ores, the principal
evidences of Satellite strength are in the production of lead and zinc
in Poland and Bulgaria, where present and potential output is substan-
tial.
3. Aluminum.
The demands for power in 1954 by other consumers restricted
the production of aluminum in Hungary, the major European Satellite pro-
ducer, by approximately 25 percent below official expectations. The Hun-
garian aluminum industry is designed to utilize approximately one-third
of the country's power. It is presumed that Hungary will adopt a long-
range policy of producing more alumina and less aluminum.
4. Tin and Antimony.
Ore reserves of tin, of extremely low grade, are confined
in the European Satellites to East Germany. Because of the low tin
content of the ores and the consequent high cost of tin, the European
Satellites are almost completely dependent upon imports to meet their
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tin needs. Satellite deposits of antimony ore are limited to Czechoslo-
vakia and East Germany, with those in the former country being extensive
and of high grade. It is expected, however, that East German ore re-
serves will be exhausted by the end of 1955.
C. Machinery and Equipment.
1. Motor Vehicles and Tractors.
The automotive industry in the Satellites generally has
developed rapidly in the postwar period. For example, in Czechoslovakia,
an important producer among the European Satellites, there is no evidence
that shortages of materials have restricted output. On the contrary, it
seems possible that difficulties in finding foreign customers may have
caused a reduction in Czechoslovak passenger car output. The Czechoslovak
tractor industry produces its own components and exports tractors to coun-
tries both inside and outside the Sino-Soviet Bloc.
Poland's motor vehicle industry, in the first stages of its
postwar growth, initiated the production of a truck which bears a strong
resemblance to French and Italian-cab-over-engine types. The Poles also
produced -significant numbers of -a tractor which, though useful in most
kinds of farm operations, was not satisfactory for all the needs of
Polish agriculture. Consequently, the Polish industry is now preparing
to produce a model of a track-laying tractor already produced in the
USSR.
Soviet technical assistance to Rumania, which in the postwar
period did not have a motor vehicle industry, helped the Rumanians begin
operations in 191+7. In 1951, production of a track-laying tractor was
begun which was a considerable improvement over the antiquated type of
tractor which the industry began producing in 1947. Rumania has also
started producing trucks but in the main has had to rely upon imported
parts.
There have been some strains upon the development of the auto-
motive industry in the Satellites. Although the area of which East Ger-
many is composed has been engaged in motor vehicle and tractor production
for half a century, the East Germans have had postwar difficulties in
reestablishing their motor vehicle and tractor industry. Many of their
problems were the result of the dismantling of plants by Soviet occupa-
tion authorities and of dissociation from West German industry, on which
East German plants depended for -supply of materials and components.
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Hungary's motor vehicle and tractor industry was never impor-
tant before World War II, and such production as existed depended on im-
ports of many essential components. At the present time, Hungary still
depends on Austria and Czechoslovakia for fuel systems and electrical
equipment for trucks. Hungary specializes in the production of buses of
the so-called "frameless" type, which are exported to countries on both
sides of the Iron Curtain. There is evidence, however, that Czechoslovakia
will produce this type of bus to its own design and probably enter the bus
market in competition. with Hungary.
2. Railroad Equipment.
Although the condition of rolling stock in the Satellite rail-
road networks has been depicted as deplorable, Satellite production of
railroad equipment during most of the postwar period has been oriented,
by one means or another, toward the export market. Between 1946 and 1952
the railroad equipment industry of East Germany functioned primarily as
a supplier of mining and industrial locomotives, freight cars, and pas-
senger coaches to the USSR. Exports averaged well over 80 percent of to-
tal output. The preemption of East German production by the USSR had two
results: inability to satisfy urgent domestic needs for transport and
industrial equipment and postponement for 8 years Df mainline steam loco-
motive manufacturing. Although East German plants had a prewar annual
capacity of about 200 mainline locomotives, manufacture was not resumed
until late 1954. In 1953 and 1954, exports of railroad equipment sub-
stantially declined, although over one-half of total output continued to
be exported. In the future, apparently, a growing share of output will
be made available to the East German railroad system.
The Hungarian railroad equipment industry, too, is primarily
oriented toward export rather than satisfaction of domestic transport and
industrial needs. A basic vulnerability of this industry is one which
affects the entire range of Hungarian industrial activity -- a domestic
shortage of basic raw materials. Two other factors responsible for
lagging production in 1953 and 1954 were inadequate capital investment
and low productivity within the plants themselves.
As in the other Satellites, production of railroad equipment
in Poland far exceeds the domestic demand, although there is considerable
evidence that Polish needs for railroad and industrial transport equip-
ment are not being met, because of excessive export commitments. Espe-
cially during the first part of the Six Year Plan, production was limited
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by shortages of raw materials (especially copper and-steel) and of workers
trained in locomotive manufacturing. The Czechoslovak railroad equipment
industry, likewise, has been hindered by scarcity of skilled labor, low
productivity, and shortage of quality materials. Nevertheless, Czechoslo-
vakia has considerable experience in the manufacture of railroad equip-
ment -- freight cars having been produced for over 50 years -- and its
technological capability is generally high.
Rumania, with one of the smallest railroad equipment indus-
tries, produces primarily for export. In 1953 and 1954 there were no
indications that the industry was suffering particularly from the raw
material shortages that limited output very severely in the period 1947-50.
The most serious difficulty during the last.few years has been a shortage
of skilled labor for the locomotive plants.
Bulgaria, the smallest manufacturer of railroad equipment
with the exception of Albania, produces freight cars, a very few pas-
senger coaches, and small mining locomotives. In 1954, even this
limited production was made possible-only by importing wheel sets and
other parts.
3. Shipbuilding.
Like the products of the-railroad equipment industries, most
of the output of Satellite shipbuilding companies is exported to the
USSR. Facilities, material, manpower, and technical ability appear to
be sufficient to carry out the planned production, but the industry is
dependent upon foreign sources for propulsion machinery. Albanian pro-
duction has been -almost entirely of small coastal merchant and fishing
vessels of wooden construction. As in Bulgaria, the Albanian industry
is dependent upon outside sources for propulsion machinery. Unlike most
other Satellites, Poland has been constructing a very wide variety of
merchant-type ships,: mostly for the USSR. In the early 1950's ship-
building in Poland was restricted primarily by material shortages and la-
bor problems. Many vessels were launched but had to wait many months
for engines and other components. A constantly increasing production
in recent years indicates that these shortages are being overcome rapidly.
The Poles have reached the point where they are technically proficient
in serial production of vessels.
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The shipbuilding industries of Czechoslovakia and Hungary
export almost their entire production to the USSR. The exports of the
former consist entirely of river vessels, especially river passenger
boats, whereas Hungary has concentrated on cargo ships of 1,194 gross
register tons. The Czechoslovak industry possesses the necessary require-
ments for production -- that is, available materials, power, manpower, and
technical ability -- and production of ship components is more than ample
for domestic requirements.
The main weakness of East Germany's shipbuilding industry
is a lack of materials. There is an apparent surplus of facilities
and labor. A large part of production has been exported to the USSR.
Fishing vessels continue to comprise a major part of the exports,
although the volume of these is decreasing whereas that of both
oceangoing and inland vessels is increasing. Taking advantage of
East German facilities and technical abilities, the USSR has caused
an expansion of the shipbuilding industry in order to release the
larger Soviet shipyards to naval construction. As a result, the in-
dustry has expanded far beyond the native needs and is dependent
upon Soviet orders for its continuance.
4. Antifriction Bearings.
The Satellite antifriction bearings industry, except in
East Germany, where present production surpasses the former peak
reached during World War II, has been a development of the postwar
period. In general, the output of the industry is insufficient to
satisfy Satellite requirements and is especially deficient in high-
precision bearings. In recognition of this shortage, the regimes
have continued to stress the expansion of the industry; its growth
has been restricted by bearing steels of substandard quality, a
paucity of precision machine tools, and a scarcity of technically
skilled labor.
5. Machine Tools.
Although precision machine tools are in short supply, pro-
duction of machine tools generally has progressed to the point where
several of the Satellite countries have been in position to export.
There is some evidence which suggests that continued high output of
machine tools has reflected the desire of the European Satellites to
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augment supplies of foreign exchange with which to purchase consumer
goods by selling machine tools in foreign markets. There is not much
doubt that some production for stock was continued in anticipation of
opening up foreign markets. The main problem facing the industry
appears to have risen out of this effort to expand foreign trade.
Since 1953 the European Satellites have been faced with increased out-
put of machine tools by non-Bloc nations. The European Satellites
have thus faced increased competition throughout the world, with the
result that sales have been low and stocks have increased.
6. Electrical and Electronic Equipment.
East Germany and Czechoslovakia have been able to achieve
volume and diversity of production in the field of electrical and elec-
tronic equipment. There is a comparatively high percentage of skilled
personnel with technical knowledge and capabilities for research and
development. The quality of the goods manufactured has declined,
however, owing to forced production and norm requirements and to a
scarcity of necessary raw materials.
The Hungarians are the largest producers of telephoneand
telegraph equipment in the European Satellites; they also produce large
quantities of electric motors and transformers. As in East Germany and
Czechoslovakia, Hungary's production in this field is hampered by poor
quality and paucity of raw materials, especially copper, and forced
production has resulted in a high reject rate. In addition, lack of
skilled labor hampers both production and research, -and delayed replace-
ment of outmoded production equipment has acted as a drag on the indus-
try.
Poland is a large producer of wire and cable, motors, and
generators, and, to a lesser extent, communicationsand electronic
equipment. Rumania and Bulgaria manufacture some -electrical equipment
but almost no electronic equipment. All three of these countries (and
Albania, of course) must rely upon other Bloc countries to supply
deficient electrical and electronic items.
D. Chemicals.
The chemical industries of the European Satellites make a signif-
icant contribution to the output of the Sino-Soviet Bloc. Nevertheless,
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short-run limitations upon the expansion of production are apparent in
most of the Satellites. Most of these limitations could be eliminated
by international exchange of equipment, raw materials, or "know-how."
Under existing international tensions, however, the only likely ex-
change will result in no net increment to Bloc potential.
The major shortcomings of the Czechoslovak chemical industry are
(1) an inadequate raw material base for several of the basic chemicals,
(2) the growing obsolescence of established plants, (3) the difficulty
of constructing new plants incorporating newer and more effective pro-
cesses for basic chemical production, and (4+) limited capabilities in
manufacturing small-tonnage but indispensable items such as catalysts
and special chemicals. The production of organic chemicals is an impor-
tant segment of the chemical industry; however, the industry is fairly
well diversified, with generally adequate production facilities to
meet domestic demand, and technical talent is of high caliber.
In East Germany a shortage of two basic raw materials for the
chemical industry, pyrites and hard coal, has restricted the production
of sulfuric acid and coal chemicals. Electric power generating limita-
tions and inadequate availabilities of new equipment and replacement
parts, labor, building materials, and transport (mostly rail) also
check expansion of the chemical industry. Nevertheless, East Germany
makes a substantial contribution to the European Satellite potential
in chemicals.
Although in technical capabilities the Hungarians are competent
to install and operate almost all the equipment utilized in the produc-
tion of basic chemicals, Hungary is plagued by an inadequate raw material
base for the production of most of the significant chemicals. Pyrites,
used in sulfuric acid manufacture, come almost exclusively from imports.
Caustic soda and chlorine production necessitate imports of rock salt.
The inferior grade of indigenous hard coals is handicapping the byproduct
coking plants which would supply coal chemicals.
The Polish chemical industry is hampered by a deficiency in tech-
nical knowledge. Production is further restricted by obsolescent machinery,
which has been operated in some cases with improper maintenance and can
no longer be depended upon. The abundant coal deposits in Poland, however,
furnish raw.materials for coal chemicals, and newly found gypsum deposits
will furnish raw materials for the manufacture of sulfuric acid.
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In Rumania the lack of technical experience in the production
of all but the basic chemicals limits the diversification of chemical
production. Heavy industry has been unable so far to fabricate the
complex chemical equipment which would be required to expand existing
facilities. The strength of the industry resides in the fact that
there are larger reserves of raw materials, such as oil, gas, coal,
salt, and pyrites, for developing a chemical industry. The output of
the Bulgarian chemical industry, negligible before 1950, is scheduled
to be sufficient to fill domestic requirements, except for chlorine
and coal chemicals, by the end of 1957.
E. Building Materials.
Although raw materials supplies are adequate, the building
materials industry of the European Satellites is lagging seriously
behind industrial needs. In brick production the main cause has
been the absence of expansion in producing capacity commensurate
with the growth of industry in general.. The shortfalls in the pro-
duction of cement have been aggravated by the increasing use of
cement as a key trade commodity for obtaining needed materials from
the USSR.
F. Forest Products.
A continued need for large quantities of wood during the
postwar period, primarily for construction purposes, has kept-output
of forest products at a high level. In 1954, however, as in previous
years, shortages of wood and wood products continued to hamper economic
development in several of the European Satellites. Pitprops, railroad
crossties, and packaging materials were in especially short supply,
necessitating careful utilization of existing stocks and, in many in-
stances, the use of more costly and often -inconvenient substitutes.
Fuelwoodshortages, especially those occurring during the two past
severe winters, increased consumer difficulties in domestic heating.
Rumania, according to reports, was particularly hard hit in this
respect. In most of the Satellites, reforestation of cutover areas
is still believed to be inadequate, and continued depletion of standing
timber reserves, which results from an annual cutting in excess of an-
nual growth, will limit long-run exploitation.
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G. Processed Foods.
Until recently the chief complication for the food-processing
industries has been the industrial investment pattern which prevailed
in the European Satellites. Desiring to create a heavy industrial base
in each of the Satellite countries, the Communist regimes emphasized
the development of producer goods industries to the detriment of the
consumer goods industries in general and food processing in particular.
Wartime destruction was replaced to a large extent, but new construction
has been confined mainly to the most essential plants. As a result,
throughout most of the industry, machinery and equipment are becoming
obsolete or are being worn out without adequate replacement. In some
sectors, however, especially in flour milling, processing capacity is
far in excess of needs because of the operation of numerous small,
inefficient plants. The food-processing industries of the European
Satellites also are plagued by a shortage of agricultural raw materials.
Additionally, inadequate storage, cold storage, and refrigeration
facilities coupled with unsatisfactory packaging not only limit the
duration of the storage period but also result in abnormal waste and
spoilage in the industry. The existing agricultural procurement practice
of demanding immediate fulfillment of compulsory delivery obligations
tends simply to aggravate this condition.
H. Light and Textile Industry.
The light and textile industry of the European Satellites has
suffered from the relatively low quality of output, compared with prewar
standards. To a large extent, this has probably been due to the tre-
mendous pressures exerted on workers and managers to meet the established
quotas. Under the existing system of control, managers are compelled to
produce those types of goods that are easiest to make rather than the types
best suited to consumer preferences in style, variety, and quality. Aside
from low quality, significant gains have been made in the production of
light and textile goods in the last few years.
Czechoslovakia has the highest per capita output of fabrics and
footwear in the Sino-Soviet Bloc, but it is estimated that between one-
third and one-half of its total production goes into export markets.
In Poland the light and textile industry has reached the phase in its
development at which stress is being placed on improving the quality
and assortment of merchandise rather than on the quantity produced.
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There is some evidence that the Poles achieved a large measure of suc-
cess in the direction of these aims in 1914. Hungary also has attained
considerable gains in the production of cotton and rayon fabrics. Short-
ages are reported, however, in other textiles and in shoes of good qual-
ity.
In East Germany the postwar recovery of the light and textile
industry has been hampered by the heavy reparations requirements which
were levied. Since the beginning of 1954, however, the reparations
payments have been cancelled and East German plants under Soviet control
have been returned; thus prospects for increasing output in the future
appear to be bright. In the remainder of the Satellites, the industry
has received additional attention under the "new course," although in
some cases investment allocations have appeared inadequate in light of
current plans, and substantial strides in. production have resulted.
I. -Military End Items.
The production of military end items in the European Satellites
is small compared with that in the USSR. Czechoslovakia, Poland, and
East Germany, in that order, are the chief producers of military end
items. The aircraft effortis virtually all concentrated in Czechoslo-
vakia at present. In the field of naval vessels, East Germany is the
only producer, and its naval vessel output is small. In ground ordnance,
the most significant development has been the entry of Czechoslovakia
and Poland into the field of tank production.
1. Ground Ordnance.
For the production of ground ordnance, Czechoslovakia has
the most modern production facilities, and its personnel are probably
-the most skilled in the European Satellites. It is the only European
Satellite believed to be developing and producing a complete range of
weapons in quantity. East Germany is experienced in modern production
methods and has many skilled personnel available for armaments produc-
tion, but in recent years very-few of them have been able to apply
their-skills to armaments. With a change in Soviet plans andsufficient
time for a conversionof facilities, an efficient armaments industry
could be developed.
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Hungary has some experience in armaments production, but
the available industrial capacity is not very large, and much of it
is utilized for civilian production, with the armed forces relying on
imports of heavy equipment from the USSR and Czechoslovakia. Its
small arms industry, however, is well developed, with experienced la-
bor and modern equipment. The armaments industry of Poland is still
being developed. Latest production techniques undoubtedly are being in-
troduced by the USSR. A shortage of trained personnel probably is defer-
ring the full utilization of these techniques at the present time. Ruma-
nia has little armaments production and, unlike the other major Satellites,
is apparently not trying to develop any extensive capacity, relying on the
northern European Satellites or the USSR for the bulk of its equipment.
2. Aircraft.
Czechoslovakia is by far the most important aircraft
producer in the European Satellites, with Poland occupying a secondary
place. Except for East Germany, the remaining countries have neither
the factories, the production experience, nor the technical background
required to produce combat aircraft. The major problems facing European
Satellite aircraft producers are shortages of metals, especially alloy-
ing elements for jet engine production. Alloying elements have to be
supplied by the USSR, and inadequate Soviet support has forced the
European Satellites to resort to less satisfactory substitutes which
lower the quality of the finished product.
V. Agricultural Problems and Production.
Following the example set by the USSR under Stalin, the Communist
regimes, upon their rise to power in the European Satellites, almost
immediately instituted a program of rapid development of the hitherto
relatively retarded industrial sectors of their economies. (The far-
reaching effects of this emphasis are depicted in Section III, above.)
After several years of this program, however, it became increasingly
apparent that an imbalance had arisen -- the development of the agri-
cultural and consumer goods sectors had not been commensurate with
the needs of the Satellites' expanding economies. The limited foreign
exchange supplies which could be earned in their somewhat restricted
export markets were being used more and more to acquire foodstuffs and
less and less to import vital industrial raw materials and equipment.
Such a, situation could not long be tolerated while the goal of rapid
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industrialization remained paramount. It is, then, little wonder that
many of the specific measures of the broad policy program which the Sat-
ellites inaugurated in the fall of 1953 were directed to redressing this
structural imbalance by substantially expanding the-output of the agri-
cultural sectors and by increasing the share of agricultural production
which would reach consumer markets. In general, those specific measures
of the "new course" which were designed to accomplish these tasks fol-
lowed two guiding principles: allocation of an increased share of invest-
ment funds and technical knowledge to the development of agriculture and
greater reliance on an incentives program, based on the relaxation of
controls over peasant producers.
A. Problems.
The Satellite governments under the "new course" have had to try
to counteract the declining trend of the agricultural labor force result-
ing from the adoption of forced collectivization and industrialization
programs. They have approached this problem by trying to raise the pro-
ductivity of the existing supplies of agricultural workers, through the
greater use of equipment and moreeffective farming methods and by at-
tempting to reverse the exodus of laborers from agricultural into indus-
trial pursuits.
The agricultural program has not produced any notable increase
in efficiency. Chemical fertilizers have been produced in greater amounts,
but there is little information as to how effectively they have been used.
In 1954 the number of tractors and other farm implements increased over
1953 deliveries, but apparently the Satellite officials considered that the
progress made was unsatisfactory. As usual, the machine tractor stations
were frequently criticized for inefficient and costly operations. The
impact of these steps on agricultural productivity cannot be measured; it
can be assumed, however, that they did little to alleviate the critical
farm labor shortages in most of the Satellites.
Policies designed to get the people back to the land also met
with only limited success. The propaganda campaigns which -stressed the
recruitment of permanent farm workers achieved almost nothing. All the
Satellite governments emphasized the important role of the private peasant
in determining agricultural production and. reinstituted the practice of
"voluntary" membership in the collectives. In Czechoslovakia, East Ger-
many, and Hungary, collective farmers at first were permitted even to
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resign, but this policy was reversed in the middle of 1954 when pressures
were applied to discourage members from leaving the collective organiza-
tions. In most Satellites, the only tangible consequence of this drive
was to stop the rate of decline in the agricultural labor force. Only
Czechoslovakia was able to bring about an actual increase in the number
of people engaged in agricultural activity (see Table 18*).
B. Production.
Although the extreme dependence of agricultural production upon
climatic conditions makes a short-term evaluation rather tenuous, it is
probable that "new course" efforts have not as yet borne fruit. As a
matter of fact, fruition should not have been expected so soon. Agri-
cultural investments have a gestation period of notoriously long dura-
tion, and the relaxation of controls on a long-suffering peasantry could
serve initially only to lessen the degree of suffering of the peasants
themselves, with little effect upon marketed supplies.
The indexes of total estimated agricultural output in Table 30**
show that the European Satellites as a whole produced only 1 percent
more agricultural commodities in 1954 than in 1953. In general, the
production of foodstuffs made a less favorable showing that the produc-
tion of industrial crops (see Table 31***). The production of grain,
especially of bread grains, was adversely affected by weather conditions
in 1954, with a resultant reduction in output in Hungary, Czechoslovakia,
and East Germany. Potato production for the Satellites as a group in-
creased in 1954, but it is estimated that the quality of the potato crop
was below that of 1953, so that losses from storage could mean that the
amount actually utilized did not exceed 1953 levels. A similar reduction
in the sugar content of the sugar beet crop was evident and, coupled with
the lack of success in beet production in most Satellite countries, pro-
bably has led to a shortage of sugar, either as an export itemior in
domestic consumption.
Animal husbandry has received extensive attention under the "new
course," but there were no significant gains in livestock numbers in
* P. 44, above.
** Table 30 follows on p. 78.
Table 31 follows on p. 79.
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S-E-C-R-E-T
Table 30
Indexes of Agricultural Production
in the European Satellites
1938 and 1948-54+
1953 = 100
Country 1938 1948 1,949 1950 1951 1952 1953
Total Agriculture
Bulgaria 113 112 101 1O- 105 99 100 107
Czechoslovakia 117 78 86 94+ 94+ 102 100 98
East Germany 125 65 '7o 84+ 99 99 100 100
Hungary 154 92 104 105 111 lo4 100 98
Poland 126 72 83 103 96 91 100 102
Rumania 136 102 96 95 106 91 100 99
European Satellites a/ 126 77 84 97
99 96
Industrial Crops
Bulgaria 67 84 81 80 93 86 100 108
Czechoslovakia 87 89 89 109 102 89 100 104
East Germany 113 89 78 110 112 84 100 115
Hungary 62 85 91 92 95 83 100 100
Poland 87 67 77 93 81 78 100 97
Rumania 74 83 85 90 98 92 100 102
Foodstuffs
Bulgaria
Czechoslovakia
East Germany
Hungary
Poland
Rumania
a. Excluding Albania.
134 114 103
119 78 86
126 63 70
16o 92 105
127 72 83
141 10)+ 97
-78-
l06 l06 loo loo
93 93 103 100
82 98 101 loo
l06 112 105 100
lol+ 97 92 100
95 107 91 100
lo6
98
99
98
102
99
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S-E-C-R-E-T
Table 31
Indexes of Production of Selected Field Crops
and of Livestock Numbers in the European Satellites
1954
1953 = 100
Albania
Bul-
g aria
Czecho- East
slovakia German
Hungary
Poland
Rumania
Field Crops
Total grains
103
106
90
95
87
108
100
Potatoes
111
94+
101
112
107
100
100
Sugar beets
93
91
104
120
100
95
97
Livestock Numbers
Horses
100
96
100
97
100
100
102
Cattle
102
104
95
98
97
104
100
Hogs
129
96
90
99
98
100
loo
Sheep
lob
96
127
109
101
125
101
195+ except in the case of sheep as shown in Table 31. In fact, it has
been estimated that the animal production plan was underfulfilled in every
Satellite. Swine, which account for a large part of meat production in
the Satellites, diminished in numbers in 1954. This may have been the
result of inadequate supplies of feed or of an effort on the part of the
Satellite governments to provide consumers with a better diet. Although
livestock numbers generally were above prewar levels in 195+ because of
larger numbers of pigs and sheep, production of animal products was still
below prewar levels because feed supplies were not sufficient to maintain
comparable slaughtering weights. Numbers of cattle aid horses have yet to
surpass prewar levels in most of the Satellites.
The output of industrial crops -- wool, cotton, flax, hemp, and
sugar beets -- made a better showing than did the production of food
crops in every Satellite except Poland (see Table 30). Of course, a
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possible reason for this could have been that the industrial crops were
less adversely affected by the relatively poor weather in 1954 than were
the food crops. In view, however, of the recovery of production in 1953
from the drought of the preceding year, a more promising explanation
appears to be that the intensive program to raise the output of textile
fibers, which the Satellites had adopted in 1950, was beginning to have
some success.
On balance, it would seem that the agricultural sector in 1954,
-even after the intended fillip provided by the "new course," is still
acting as a depressant on the economic growth of the Satellites. It is
true that the attempt to meet industrial needs for textile fibers from
indigenous sources.has achieved some progress. Nevertheless, the quan-
tities of foodstuffs which can be supplied domestically have been insuf-
ficient to satisfy economic requirements. This has given rise to a
double drain: foreign exchange supplies have had to be employed to al-
lay the demands of consumers (rather than to meet the investment require-
ments of a rapidly, expanding industrial sector), and funds which under
less pressing conditions would have gone into industrial investment have
had to be allocated to the agricultural sector. The maintenance of the
agricultural program embodied in the "new course" is a recognition of
this situation.
VI. Transportation and Communications.
A. Transportation.
The European Satellites are served by a network of relatively
well-integrated systems of transportation. Standard-gauge railroad
tracks permit the convenient interchange of traffic among all of the
European Satellites (except Albania). Highways and inland waterways
facilitate the domestic and international movement of goods through
the region. The Danube is a particularly important commercial thorough-
fare for the Satellite region from Czechoslovakia south. All of the coun-
tries, even those with no direct access to the sea, have maritime fleets,
but the Polish fleet accounted for two-thirds of the total maritime
traffic (ton-kilometers) of the European Satellites in 1954. All of the
Satellites except East Germany and Albania operated airlines in 1954,
and an East German airline was expected to begin operations in 1955.
The Soviet airline Aeroflot has extensive operations in the European
Satellites, and the USSR exercises a strong influence over European
Satellite airlines.
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In terms of ton-kilometers, the railroads accounted for over
80 percent of European Satellite commerical transport in 1954; ocean
freight accounted for 10 percent; inland waterways, 6 percent; and
highway transportation, 3 percent of total ton-kilometers of freight
(see Table 32*). It should be noted, however, that in terms of tonnage
carried rather than ton-kilometers, highway transport would appear to
be somewhat more important, and ocean transport somewhat less important
than these percentages indicate. The reason is that trucks carry rel-
atively large amounts of freight for short distances, usually within
metropolitan areas or between farm and market, whereas ocean freight
often consists of small cargoes carried relatively long distances.
Poland alone accounted for 42.5 percent of total European Sat-
ellite transport (in ton-kilometers) in 1954. This ratio reflects the
fact that it is the largest Satellite in area, population, and GNP and
also has a relatively large volume of transit traffic. Czechoslovakia
and East Germany ranked next, with each accounting for about 19 per-
cent of ton-kilometers in 1954. Rumania, Hungary, and Bulgaria accounted
for 9.6, 5.2, and 4.2 percent, respectively, of total European Satel-
lite transport. Albania contributed less than 0.2 percent to the total
in 1954. (See Figure 5** for distribution of freight traffic by country.)
Generally speaking, the fixed facilities of the railroads of the
European Satellites are adequate to support the current level of economic
activity even though they are not in very good repair. Only in East Ger-
many is the deterioration of the rail lines a very serious problem. A
principal difficulty in all of the European Satellites is that a large
part of the rolling stock is old and in poor condition. In East.Germany,
moreover, the freight car park appears to be too small. The shortage of
serviceable rolling stock has had an adverse effect upon economic activity
in East Germany and perhaps in the other European Satellites, particularly
during the harvest season. A chronic shortage of coal also has hampered
rail operations from time to time in East Germany and Czechoslovakia and,
to a lesser extent, in Bulgaria and Hungary.
The most important additions to the railroad networks of the
Satellites in 1954 consisted of (1) further work on the Berlin ring,
Table 32 follows on p. 82.
Following p. 82.
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Table 32
Freight Traffic in the European Satellites
1938 and 1948-54
Total
Rail
Highway
Inland Water
Ocean
Million
Million
Million
Million
Million
Ton-Kilo-
Ton-Kilo-
Ton-Kilo-
Ton-Kilo-
Ton-Kilo-
Year
meters
Percent
meters
Percent
meters
Percent
meters
Percent
meters
Percent
1938
91,031
100
68,236
75
1,095
1
10,900
12
10,800
12
1948
68,446
100
60,358
88
1,588
2
3,200
5
3,300
5
1949
82,571
100
71,213
87
2,058
2
4,000
5
5,300
6
1950
93,516
100
79,355
85
2,561
3
4,500
5
7,100
7
1951
109,397
100
90,442
82
3,055
3
5,200
5
10,700
10
1952
120,304
100
97,842
81
3,662
3
6,600
6
12,200
10
1953
135,653
loo
110,761
82
4,392
3
7,8W
6
12,700
9
1954
143,995
loo
116,191
8i
5,lo4
3
8,800
6
13,900
10
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DISTRIBUTION OF FREIGHT TRAFFIC
1938 and 1954
(In percent of Satellite totals)
RAIL TRANSPORT
a
P~BPa`P BJ~ GPR,P OS~OJ P~1 GOMPNy a JNGPR~
S
a
BP
cti~G
PORNO R JMPN~P
M
HIGHWAY
TRANSPORT
O
EAST GERMr NUNGAR
..__..:...:r.:...c ~GNOS~
INLANID WATER
TRANSPORTATION
41
i
~BP~Y GP~~P 050
P 0 .cGa
0 PR~
A sop
Pc,4
6
m
12,8 1?
011, ~10111
901 yo
RUMANIA
PO\- PNO JMPN1P
NEG. NEG.. ~b%$7 ~\~ 0.0 N.A. 1-4 , Lx
0-$1, y~1P 6UvGPR,ONOS~OJPy~S, 6 0MPo N JNGPRI
~lE EP
SECRET
I
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which is nearing completion; (2) further restoration of double-tracked
lines in East Germany; (3) completion of the Lukow-Skiernewice line,
which permits east-west traffic to bypass Warsaw; (4) further double
tracking of the Prague-Chop line to the USSR border; (5) completion of
a short line in northern Hungary permitting traffic to bypass Budapest;
(6) completion of the Bucharest-Craiova line, which joins railroads in
southern and western Rumania; (7) completion of the Giurgiu-Ruse rail
and highway bridge between Rumania and Bulgaria, and (8) completion of
the Sofia-Burgas line, which improves connections between eastern and
western Bulgaria. (See Table 33* for an inventory of transport facili-
ties.)
The river and canal systems of the Satellites are well devel-
oped, but operations are handicapped by the use of old and poorly
maintained vessels and by the lack of adequate cargo-handling facili-
ties at some of the river ports. Several major plans for improving
inland waterway facilities have been announced in recent years, but
little has actually been done. Poland and East Germany have the
largest volume of inland waterway traffic in terms of ton-kilometers.
The highway systems of East Germany, Czechoslovakia, and
Hungary are relatively well developed and in fair condition. Except
for the highways in the Polish-occupied territories of Germany, the
Polish highway system is more primitive and less dense than in East
Germany and Czechoslovakia. Poland has put considerable emphasis on
improving roads and increasing the truck park and as a consequence has
had the greatest increase in commercial road traffic of any of the
European Satellites in the last 5 years. In 1954, however, highway
transport constituted only 1 percent of the ton-kilometers of freight
carried by the Polish transport systems. The Rumanian, Bulgarian, and
Albanian highway networks are sparse, and few'highways are first class.
Throughout the'European Satellites there is a serious shortage of spare
parts for trucks.
Poland owns 78 percent of the oceangoing vessels belonging to
the Satellites, and in 1954 Polish vessels carried 80 percent of the
ton-kilometers of oceangoing freight carried by Satellite vessels. A
large part of the cargo carried in Polish bottoms consists of goods
destined for Communist China.
Table 33 follows on p. 84.
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Table 33
Characteristics of Selected Transport Facilities in the European Satellites
1955
Units
Albania
Bulgaria
Czechoslovakia
East Germany
Hungary
Poland
Rumania
Standard-gauge rail lines
Route miles
77
2,318
8,388
9,010
5,314
15,349
6,130
Rail-line density
Miles per
square mile
.007
.054
.168
.216
.140
.128
.067
Locomotives
Units
7
700
6,161
6,488
2,211
5,600
N.A.
serviceable
Units
N.A.
N.A.
4,000
3,801
1,900
3,480
2t000
Freight cars
Units
80
16,000
88,221
130,000
58,000
200,000
51,000
Commercial vehicles
Units
1,627
13,750
70,000
123,911
47,000
66,000
12,500
?wle ;:ate :;ays
T7..,,+.. '1..
L Au L L L L., C)
AT A
i.I7 Y
nno
cy J
rnn
J i G
U000 UU
VLAIJ
57
U
3n75
U
C7n
U G
Barge capacity
Metric tons
N.A.
56,340
350,000
867,000
126,000
900,000
300,000
Oceangoing vessels
(over 1,000 GRT)
GET
0
12,484
17,220
6,475
2,100
286,316
32,411
Airfields (Class 1 and 2)
Number
1
10
15
30
12
45
12
Air transport planes
Units
0
13
30
N.A.
13
20
21
a. As of October 1953.
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The airlines of the European Satellites, except for East Ger-
many and Albania, operate a total of about 100 aircraft. Most of their
flight routes are within the Soviet Bloc, but the Polish and Czechoslovak
airlines also have scheduled flights to Western capitals. In the fall of
195+ the USSR withdrew its participation in the airlines of Hungary, Ruman-
ia, and Bulgaria. There are about 125 first- or second-class airfields
within the territory of the European Satellites, and there is an equal or
greater number of inferior fields. Most of these airfields were built
after World War II for military purposes. The Satellite airlines appear
to be able to meet all demands for commercial passenger transportation.
Probably very little freight is transported by air.
In all of the Satellite countries, the morale of the labor force
in the transportation industries is reported to be poor. A pervasive
complaint is that most supervisory positions are filled with profession-
ally incompetent persons, appointed for their political reliability.
Reports of bureaucratic inefficiency are also prevalent.
B. Communications.
1. Telephone and Telegraph.
The feline facilities of the European Satellites provide
a fair geograpItd1di?exe, but the systems do not permit so rapid and
efficient communications as a modern high-capacity system. The telephone
and telegraph facilities are now hardly more than adequate to meet the
economic requirements of most of-the countries, although the facilities
have been continually increased during the postwar period. Most of the
European Satellite countries are engaged in a program of automation in
order to increase the efficiency of their communications systems. From
1950 to 195+ the kilometers of telegraph and telephone wireline in the
European Satellites increased from 7.3 million to 8 million kilometers,
an increase of . 8.2 perQent (see ','al. le 31i* for individual country data).
The estimated ri tnbOW f telephone". subscribers increased from 1,151,000
to 1,229,000'd. n the same period. The average number of persons
per telephone a'Fj,&n S.tellites decreased slightly, from 78
in 1950 to 76 in %seeE"T"able 35 for number of persons per tele-
phone, by country.)
Table 3 follows on p. 86.
Table 35 follows on p. 87.
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Table 34
Number of Telephone Subscribers, Number of Telegraph Offices,
and Kilometers of Communications Wire in the European Satellites
1950 and 1954
Telephone
Number of Subscribers
Kilometers of Wire
Country
1950
1954
1950
1954
Albania
1,100
1,400
1,000
1,504
Bulgaria
87,000
100,000
435,000
500,000
Czechoslovakia
385,000
405,000
1,697,000
1,786,000
East Germany
205,049
224,000
1,371,000
1,.682,300
Hungary
112,700
117,000
1,000,000
1,040,000
Poland
226,000
243,700
1,358,000
1,464,000
Rumania
134,000
138,000
864,000
890,000
Total
1,150,849
1.,229,l00
6,726,000
7,363,804
Telegraph
Number of Offices
Kilometers of Wire
Country
1950
1954
1 5c500
1954
.
Albania
39
64
7,000
8,517
Bulgaria
1,430
1,850
60,700
78,530
Czechoslovakia
6,082
6,530
157,700
169,000
East Germany
3,013
3,600
31,930
38,160
Hungary
3,000
3,560
77,000
89,000
Poland
5,000
5,960
77,020
91,780
Rumania
N.A.
N.A.
153,000
159,000
Total
18,564
21,564
564,350
633,987
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Table 35
Number of Persons Per Telephone in the European Satellites
1950 and 1954
Country
1950
1954
_
Albania
1,090
935
Bulgaria
124
.124
Czechoslovakia
35
32
East Germany
96
85
Hungary
81
82
Poland
110
110
Rumania
111
120
The basic wireline system of the European Satellites not
only allows alternate routing in the event that certain lines are
temporarily out of order but also provides a network that is, to a
high degree, invulnerable to jamming.
2. Radiobroadcasting.
The domestic radiobroadcasting transmission and reception
base of the European Satellites is believed adequate to provide good
geographical coverage of the countries. It is estimated that in 1954
there were slightly more than 10 million independent radio receivers
in the Satellites, an increase of 45 percent since 1950. The number
of persons per independent radio receiver ranged from 4 in Czechoslovakia
and East Germany to 62 in Albania (see Table 36*). Through the use of
group-listening centers and wire-diffusion** networks (wired loudspeakers),
* Table 36 follows on p. 88.
** Wire-diffusion is a system of networks in which loudspeakers are con-
nected to a central program distribution point either by telephone circuits
or by specially strung wirelines. The program distribution points are in
turn connected to the broadcasting station either by wirelines or, in the
case of remote areas, by radio receiving units.
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Table 36
Number of Radio-Receivers and Wired Loudspeakers and Number of Persons
Per Radio Receiver and Wired Loudspeaker in the European Satellites
1950 and 1954
Number of Radio Receivers Persons Per Radio Receiver
Country _ 1950 1954 _ 1950
1954
Albania
Bulgaria
Czechoslovakia
East Germany
Hungary
Poland
Rumania
Total
17,500
209,200
2,360,000
2,621,800
619,000
900,000
250,000
6,977,500
21,00
270,000
3,050,000
4,070,000
968,000
1,400,000
312,000
10,091,000
69
35
5
7
15
28
65
62
28
4
4
10
19
55
Number of Wired Loudspeakers
Persons Per Wired Loudspeaker
Country
1950
1954
1950
1954
Albania
Negligible
_
6,000
83
218
Bulgaria
87,000
230,000
25
32
Czechoslovakia
500,000
500,000
N.A.
26
East Germany
N.A.
N.A.
5,808
N.A.
Hungary
1,600
320,000
45
30
Poland
555,000
1,400,000
573
19
Rumania
28,500
190,000
90
Total
1,172,100
2,646,000
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the authorities are endeavoring to maximize the size of their audience
and to control reception. There were no wired loudspeakers in the Sat-
ellites in 1938, but in 1950 there were over a million, and by 1954 the
number had increased to over 2.5 million, not counting East Germany for
which information was not available. In 1954 there was an average of 1
radio receiver or wired loudspeaker for every 7 persons in the European
Satellites, compared with 1 radio for each person in the US.
3. Television.
With the possible exception of East Germany, television in
the European Satellites is in the very early stages of development, al-
though all of the Satellites except Albania now have television. There
are a total of 11 television stations, 2 of which are in East Berlin.
The total number of television receivers is believed to be small, re-
ceivers being available only for clubs and other institutional reception
points and for high-ranking Party members. Most of the Satellites' pro-
duction of equipment for sending and receiving television programs is be-
lieved to have gone to the USSR in recent years.
VII. Consumer Welfare.
Under the system of resource allocation which was adopted by the
European Satellite Communist governments, the usually accepted goal of
enriching the people's economic well-being was relegated to satisfaction
in the distant future. In the short run, the regimes thought that it was
enough merely to furnish the population with an adequate standard of
living, in the sense that the level of consumption permits labor produc-
tivities and rates of saving which are consistent with high rates of
economic growth. This decision appears to have been modified, at least
temporarily, with the promulgation of the "new course." Under the "new
course," all of the Satellites have continued to stress the development
of educational, medical, and recreational facilities, and per capita
consumption of these services has surpassed prewar levels. Production
of manufactured consumer goods has been steadily rising over the last
3 years so that now consumption of such goods, too, is considerably in
excess of that of the late 1930's. Nevertheless, per capita availabili-
ties of foods in the European Satellites are still below prewar levels.
Residential housing also has been given until recently a low priority
status, with the result that in the postwar period extreme overcrowding,
especially in the mushrooming industrial towns, has been commonplace.
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Also, marketing outlets have not been allotted the materials and manpower
needed to provide convenient and efficient service.
A. Availability of -Foodstuffs.
The decline in the per capita production of foodstuffs since
the prewar period, as shown in Table 37,* is a striking indication of
the Communists' neglect of the agricultural sectors of the Satellite
economies. For the area as a whole, per capita production of cereals
and potatoes was-about 22 percent lower in 1954 than before the war.
This failure of grain and potato production to keep abreast of popula-
tion growth had the added effect, because of shortages of livestock
feed, of reducing the per capita production of meat and other animal
products. Hungary, East Germany, and Rumania had the greatest declines
in per capita output of foodstuffs (to about 70 percent of prewar). Of
the rest of the Satellites, only Albania was able to increase its pro-
duction of foodstuffs more rapidly than its-population expanded.
These decreases in per capita production of foodstuffs resulted
in lowered per capita caloric consumption of foodstuffs in allof the
Satellites except Poland and Bulgaria in the postwar period (see Table
38** and Figure 6***). In the other countries, however, per capita
caloric consumption has more nearly approached the prewar level than
have per capita production figures. Part of the explanation of the
apparent inconsistency can befound in the drastic shift in the foreign
trade pattern of the Satellites. In the prewar period the area was -a
net exporter of grain, whereas the Satellites are now net importers of
grain, chiefly from the USSR, and possibly of foodstuffs in general
(see Section VIII, below). In addition to this altered trade pattern,
there also has been a deterioration in the quality of the diet of
several of the Satellites, the exceptions-being Poland, Hungary, and
Rumania. This deterioration has taken the form of a marked substitution
in the consumption-pattern of basic, starchy foods of high caloric con-
tent for protein foods of lower caloric content. These two shifts have
kept caloric consumption higher than would be indicated by the decline
in the production of-foodstuffs.
B. Availability of Consumer Goods Other Than Foodstuffs.
There is no doubt that the destruction accompanying World War II
reduced the availability of manufactured consumer goods in the European
Table 37 follows on p. 91.
Table 38 follows on p. 92.
Following p. 90.
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A~x XES OM AW
t
TA :CALOR C CONSUMPTION
Ido.o
88.3 89.7 891.7
monmr-ne 1
SECRET
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Table 37
Per Capita Production of Selected Agricultural Products in the European Satellites
Prewar and 1954
Kilograms Per Capita
Total Grains
Potatoes
Meat
Fat
Milk
Country
Prewar J
1954
Prewar a
1954
Prewar J
1954
Prewar a
1954
Prewar J
1954
Albania
188
197
2
3
9
12
2
2
N.A.
N.A.
Bulgaria
532
465
17
11
23
15
6
3
69
58
Czechoslovakia
384
342
642
394
26
27
10
9
298
276
East Germany
421
238
889
654
38
30
15
10
306
259
Hungary
670
455
239
159
31
21
18
8
190
114
Poland
432
410
1,188
1,124
30
28
12
12
319
333
Rumania
508
334
86
46
19
15
4
2
92
105
a. 1935-39 average.
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Table 38
Average Daily Per Capita Caloric Consumption of Food
in the EuropeanSatellites a/
Prewar and 1952/53, J 1953/54, b and 1954/55 J
Calories Per Capita
Country
Prewar
1952/5J
1953/54
1954/55
Albania
1,758 J
1,471
1,742
1,741
Bulgaria
2,424
2,177
2,341
2,482
Czechoslovakia
2,501 J
2,262
2,540
2,423
East Germany
2,810-dJ
2,102
2,555
2,304
Hungary
2,632 J
2,324
2,362
2,360
Poland
2,791 J
2,745
2,929
2,963
Rumania
2,606 J
2,080
2,184
2,329
a. The estimates take into account-grains, sugar, potatoes,
animal fats and vegetable oils, fish, and milk, which nor-
mally account for 90 to 95 percent of total caloric consump-
tion.
b. 1 July to 30 June.
c. 1933-37 average.
d. 1935-38 average.
e. 1934-38 average.
Satellites to levels considerably below :prewar levels. The low rates
of investment in light, as opposed to heavy, industry; the Soviet con-
fiscation of Satellite industrial capital; and the curtailment of raw
material imports from non-Bloc countries in the immediate postwar period
were contributing factors in the slow recovery record of the consumer
goods industries. Beginning in 1950, however, the countries of the
Soviet Bloc decided to facilitate a more rapid development of this sector.
An intensive program to produce uupplies of textile fibers sufficient to
satisfy existing textile capacity was undertaken. Increased efforts were
made to obtain agricultural raw materials from outside of the Bloc. The
"new course" initiated an economic program of broad scope which ostensibly
has as its major aim a rapid rise in standards of living. In the past few
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years, as a result of these new policy commitments and the progress
already made before their implementation, substantial gains have been
realized in per capita consumption of textiles, and similar gains are
implied by increases in'the production of footwear and other manufactured
consumer goods (see Tables 39 and 40*). Of all the Satellite peoples,
only Rumanians and Bulgarians have levels of consumption for manufactured
consumer goods which are below prewar levels. Even so, all of the Satel-
lites have found it necessary to cope with specific shortages. In general,
these shortages of specific types of consumer goods have been relieved by
the growth in intra-Bloc exchange of this type of product. Nevertheless,
the satisfactions derived from the increased availability of manufactured.
consumer goods have been dissipated somewhat by a deterioration in the
quality of these goods compared to prewar standards.
Estimated Per Capita Consumption of Textile Fibers
in the European Satellites J
Prewar and 1952-54
Kilograms Per Capita
Country
Prewar
1952
1953
1954
_`
Bulgaria
4.5
3.9
4.2
4.4
Czechoslovakia
5.1
7.9
8.1
8.3
East Germany
7.4
7.5
8.5
10.1
Hungary
3.8
4.5
4.3
4.5
Poland
4.4
5.7
5.9
6.2
Rumania
4.1
3.7
3.7
3.8
a. The prewar estimates which include only cotton,
wool, and rayon fibers, are from source 2,62J. All
postwar figures include synthetic fibers as well.
The 1953 figures are taken from source 163/, except
for Rumania, where the figure has been changed to
include 0.5 of a kilogram of synthetics. The fig-
ures for 1952'and 1954 were derived by taking the
1953 figures and changing them in proportion to
changes in production and population.
* Table 0 follows on p. 94.
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Table 4o
Estimated Per Capita Production of Manufactured Footwear
in the European Satellites
Prewar and 1948-54
Year
Bulgaria
Czechoslovakia
East
Germ
Hungary
Poland
Rumania
Prewar
0.27
3.5
2.4
0.44
0.50
0.33
1948
0.18
5.3
1.0
0.44
0.36
0.19
1949
0.21
5.4
1.3
0.50
0.53
0.36
1950
0.23
5.5
1.8
0.76
o.6o
o.46
1951
0.27
5.6
2.0
0.97
0.83
0.53
1952
0.32
5.7
2.4
1.11
0.88
0.58
1953
0.33
5.7
2.5
1.07
1.38
0.70
1954
0.35
5.7
3.0
1.32
1.48
0.81
C. Housing.
The development programs initiated by the Communist regimes in
-the European Satellites gave a high priority to the growth of heavy in-
dustry. Consequently, up to the implemention of the "new course," the
attention given to the expansion of housing facilities was inadequate
to meet the needs of the expanding populations. Most of the new housing
was constructed in the growing industrial towns, but this was still in-
sufficient to provide adequate housing for the tremendous influx of new
industrial workers. Overcrowding was the usual condition for the bulk
of the populations and, especially in Rumania, Bulgaria, and Poland,
conditions were becoming rapidly worse '(see Table 41*). The regimes
are now making an effort to lessen the extent of overcrowding. In 1954
the construction industries of Czechoslovakia and Hungary provided 4
new dwelling units for each 10 persons added to the population, but
Rumania, with 1 new dwelling unit for each 15 persons added, was making
little progress. (In East Germany, which is omitted from Table 41, new
Table-1 ollows on p. 95.
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Table 41
Ratio of the Increase in Population to the Number
of New Urban Dwelling Units J
in the European Satellites J
1949-54
Year
Bulgaria J
Czechoslovakia
Hung a
Poland
Rumania
1949
32.6
4.7
3.2
10.5
35.5
1950
20.8
4.2
4.0
10.7
15.6
1951
6.5
3.1
4.6
10.1
15.4
1952
5.9
3.3
7.2
10.1
20.6
1953
11.1
3.0
3.5
9.7
22.3
1954
6.9
2.4
2.4
8.1
14.8
a. Population increases used are from figures presented in Table
16, p. 41, above. The original figures in square meters which
are used for new dwelling units have been converted to dwelling
units on the following basis (from official plans): 35 square
meters per dwelling unit in Bulgaria, Czechoslovakia, and Ru-
mania; 30 in Hungary; and 45 in Poland.
b. The ratios for East Germany, although available, are omitted
because the computation of the ratios leads to figures which are
not easy to interpret, either being negative or having zero as a
dividend.
c. The figures for Bulgaria include only state-constructed urban
housing; they do not include urban housing construction by indi-
viduals or cooperatives.
dwelling units were being built at an average rate of 42,000 per year
after 1950, while its population was decreasing or stable.) The table
gives only a rough indication, however, of the degree of amelioration
of crowded housing conditions. In the first place, an extremely low
ratio of population increase to new housing would have to be the rule
for some time before the deleterious effects of the high ratios in the
recent past could be completely offset. Second, the figures are for
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urban dwellings only. Finally, the figures in the table make no allow-
ance for the deterioration of, and hence the need for replacement of,
the existing stock of housing or for the replacement of housing destroyed
during the war. On balance, it seems reasonable to conclude that housing
conditions in. the European Satellites grew rapidly worse during the war
and in the years following and that remedial efforts recently undertaken
have not yet brought a return of prewar standards.
D. Services.
The accurate measurement of the amount of services provided in
the,Satellite economies is an elusive task. There is, however, little
doubt that in the last few years about the same quantity of services is
being supplied as before the war. The provision of many types of services,
especially those that could be easily adapted to large-scale supervisory
techniques, has been assumed by the state apparatus. But whereas in some
fields under government control, such as-health and education, notable
achievements have resulted, marketing channels have continued to-provide
a service which on the whole is inconvenient and inefficient. Other
services, such as laundry and domestic services, which formerly entered
into the market-nexus are now to a greater extent performed in the home
and thus do not lend themselves to national income computations. Almost
nothing can be said about the performance of these latter types of serv-
ices. Nevertheless, there are available :partial indicators of the amount
of services being supplied in some fields (see Table 1+2*). These show
that per capita availabilities of health and educational services are
greater now than during the prewar period, and although no figures are
at hand, itis also likely that the accessibility of recreational
facilities to the people has increased under the direction of the
Communist regimes.
VIII. Foreign Economic Relations.**
The two most important phases of the evolution of the postwar inter-
national trade position of the European Satellites have been the rapid
Table V2-follows on p. 97.
*-Table-
The discussion of this section is based upon. data which are seriously
deficient in many respects. In order to maintain continuity of presenta-
tion, description of these deficiencies has been relegated to Appendix C.
It is suggested that the reader acquaint himself with the inadequacies
in the data before reading further.
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ri ~ ~ r~-I m
x-11
d)
P1
r-I I'D b t
a
i
ral
M %ID bO N-
H I'D ,-+ (n
a
O\ OD bbI~O
a),a U~d aw 4O4
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intensification of commercial ties between the Satellites and the USSR*
and the gradual alteration of the prewar commodity composition of-Satel-
lite trade. In most of the Satellites, these two movements began under
conditions of increased commercial isolation of the Satellites from their
former markets and were prolonged by the mutual severance of relations
between the Satellites and their prewar trading associates. It appears,
therefore, that the two new movements in the pattern of Satellite trade
in the postwar period had their origin in the attempts on the part of
the Satellites to fill the economic vacuum created by the loss of access
to their prewar markets and on the part of the USSR to gain economic
hegemony over its Eastern European neighbors.
Under these circumstances, there naturally has been a substantial
increase in the interdependence of the Satellite and Soviet economies.
The extent of such interdependence is not a matter for exact measure-
ment, but the following material should provide an intuitive impression
of the existing degree of economic interdependence between the USSR and
the Satellites and the general direction of its development.
A. Value of Foreign Trade.
The value of the total trade turnover of the European Satellites
in 1953 was about US $6.54 billion,** or about 102 percent of the value of
the foreign trade of the USSR. In current prices, Satellite foreign
trade in 1953 was 2 1/2 times greater than. in the prewar period, but in
real terms it showed little increase. 165 Before the war the Satellites
* The value of Satellite trade with non-Bloc countries increased in
1953 and 1954, but the dominance of intra-Bloc trade continued. See
pp. 101-103.
X This figure differs from the value of total trade turnover of the Sat-
ellites given in Table 43, which follows on p. 99, because of a different
method of calculation. For the purposes of the comparison made it was
thought that the most valid concept of trade turnover of the Satellites
would be one which considered each Satellite individually and yet avoided
double-counting when considering them as a group. The figure, US $6.54
billion, equals the sum of the value of the trade turnover of each Sat-
ellite (except Albania) with countries outside of the Satellite area plus
half the value of total intra-Satellite trade. This latter value was
used in lieu of a value for the total of intra-Satellite exports or
imports, neither of which was available.
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accounted for about 6 percent of world trade; in 1953 their share had
fallen to about 5 percent of a world total which, after allowing for
price increases, was substantially larger than before the war.
As Table 43 shows, in 1953 most of the Satellites' trade, about
75 percent, was conducted, in about equal proportions, by the three
northern European Satellites. The trade of each of these was about
twice as large as that of Hungary, which ranked fourth in value of trade.
The trade. of Hungary, in turn, was almost equal to that of Rumania and
Bulgaria combined.
Table 43
Trade Turnover of the European Satellites aJ
1953
Billion US -$
Country_____
Billion US Dollars
Percent
Bulgaria
0.39
5
Czechoslovakia
1.87
24
East Germany
2.02
26
Hungary
0.97
12
Poland
1.99
25
Rumania
0.59
8
Total
7.83
a. Based on Appendix A, Table 52. Excludes Al-
bania.
Although the total trade of the European Satellites was very
small compared with the world total, it nevertheless provided important
increments to Satellite well-being. A comparison of the ratios of trade
turnover to the GNP's of each of the Satellites is only a crude indica-
tion of the importance of foreign trade to their economies; among other
things, it glosses over the role of strategic or limiting imports and the
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importance of particular markets. Nevertheless, such a comparison,
presented in Table 44, is of some value. One feature is readily
apparent: the Satellites weremuch less autarkic than the USSR and
even the US. On the other hand, they were much less dependent upon
foreign trade than was the UK,and, as a whole, less dependent upon
trade than the other European countries shown in the table. It might
be said that, in terms of economic self-sufficiency, the Satellites
can be grouped in an intermediate position. Within this grouping,
East Germany and Poland were most independent of, and Hungary most
dependent upon, foreign trade channels.
Table 44
Trade Turnover as a Percent of Gross National Product
in the European Satellites and Other Selected Countries a/
1951
Country
Percent of GNP
Bulgaria
23.0
Czechoslovakia
23.8
East Germany
9.0
Hungary
28.8
Poland
12.1
Rumania
17.4
European Satellites
19.0
USSR
3.8
US
7.9
UK
42.7
France, West Germany, and Italy
23.2-24.4
a. GNP figures for the USSR and Soviet trade turn-
over-data are from source 169. Trade turnover fig-
ures for the non-Bloc countries are from source 16V-
GNP figures for western European countries are from
source 16,_8../ The GNP figure for the US is from
source l/. GNP data for the Satellites are from
Section III, above.
b. Excluding Albania.
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B. Geographic Distribution of Trade.*
The trade pattern of the European Satellites in the postwar
period has exhibited a progressive increase in the concentration of
trade within the Sino-Soviet Bloc and, correspondingly, a rapid dim-
inution of the relative importance of trade with countries outside the
Bloc. More than 80 percent of the prewar trade of the European Satel-
lites was with countries which do not now form part of the Bloc, and
most of the remainder of their trade was with one another. At that
time the USSR accounted for less than 3 percent of their total trade,
and commerce with Communist China was negligible. By 1953 this pre-
war geographic pattern had been radically altered. Trade with the
West had fallen to about 24 percent of total European Satellite trade
turnover, trade among the Satellites constituted about 32 percent, and
44 percent was with the USSR and Communist China -- with Communist
China sharing a smE1l but growing proportion of this amount.
This redirection of European Satellite trade was already apparent
in 1948, and until recently the trend had continued along the same lines.
Since the announcements of the "new course," however, there is evidence
of a minor resurgence of trade outside the Sino-Soviet Bloc. 171 For
example, East Germany's total trade turnover with non-Bloc countries in-
creased by about 50 percent in 1954 over 1953. In 1954 the value of
Satellite trade with the non-Bloc area was greater than in any year
since 1951. Figures for 1954 show that the value of Bloc imports from
the US was the largest since 1951, and statistics for the first quarter
of 1955 point to at least a doubling of the 1954 value. The value of
US imports from the Bloc in 1954 was also the highest since 1951, and
the indications are that 1955 will be even higher. 1172J Additional
* The discussion in this subsection refers to Figure 7, following
p. 102, and Table 45, which follows on p. 102. A somewhat less con-
ventional graph (similar to tYiose employed in source 170/) of the same
material is presented in Appendix B as Figure 20. Like any unfamiliar
tool, the graph in Appendix B requires that the user expend some time
and effort to master the technique of reading it before it can be
employed easily. It is believed, however, that this graph depicts the
relationships discussed in this section more clearly and concisely than
other forms of presentation and that the time and effort needed in order
to become acquainted with its use will not be wasted.
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Geographic Distribution of the Trade Turnover J
of the European Satellites
1936-38 and 1948-53
Country 1936-38 2248 1949
1950
1951
1952
23
Bulgaria
4
2
4
58
2
57.7
57
9
.7
USSR and China 36.0 3
5.
.
.
8
Rest of Sino-Soviet Bloc 13.2 42.2 47.3
-43.7
33.8
31.1
.1
2
4
Non-Bloc area 86.8 21.8 18.0
11.1
8.0
11.2
.0
1
Czechoslovakia
USSR and China 3.0
15.8
25.1
30.9
34.2
43.1
45.6
4
Rest of Sino-Soviet Bloc 14.4
14.4
20.4
23.8
26.2
27.9
32.
Non-Bloc area 82.6
69.8
54.5
45.3
39.6
29.0
22.0
East Germany:
USSR and China 5.3
33.0
38.0
36.0
48.0
48.9
51.0
8
Rest of Sino-Soviet Bloc 10.9
30.0
20.0
29.0
33.0
26.3
25.
Non-Bloc area 83.9
37.0
42.0
35.0
19.0
24.8
23.2
Hungary
USSR and China 0.2
18.0
17.7
23.0
29.0
30.9
37.1
Rest of Sino-Soviet Bloc 19.0
16.1
28.8
38.5
38.3
40.3
39.9
Non-Bloc area 80.8
65.9
53.5
38.5
32.7
28.8
23.0
Poland
USSR and China 1.6
21.7
22.3
-27.3
27.9
35.0
32.7
Rest of Sino-Soviet Bloc 10.7
19.2
21.0
32.0
30.3
32.0
37.3
Non-Bloc area 87.7
5:3.1
56.7
40.7
41.8
33.0
30.0
USSR and China
0.2
22.7
46.9
59.7
53.5
58.0
54.5
Rest of Sino-Soviet Bloc
25.5
48.2
35.1
23.2
25.3
26.7
29.5
Non-Bloc area
74.3
29.1
18.0
17.1
21.2
15.3
16.0
European Satellites J
USSR and China
2.8
21.0
27.7
33.3
37.0
42.7
43.9
Rest of Sino-Soviet
14.1
21.2
24.5
29.8
30.4
30.2
32.5
Non-Bloc area
83.1
57.8
47.8
36.9
32.6
27.1
23.6
a. The percentages are based on data presented in Appendix A, Table 52. The
percentages shown for "Rest of Sino-Soviet Bloc" are derived from values which
are residuals;-that is, which equal the value of total trade minus the sum of
the values of trade with the USSR and China and with the non-Bloc area.
b. Excluding Albania.
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SECRET
0
193(
EUROPEAN SATELLITES*
GEOGRAPHIC DISTRIBUTION OF TRADE TURNOVER
1936-38 Average and 1948-53
(In percent)
1 1
38 '48 '49 '50 '51 52 '53
ALL SATELLITES*
1936-38 '48 '49 '50 '51 '52 '53
POLAND
1936-38 '48 '49 '50 51 '52 '53 1936-38 '48 '49 '50 '51 '52 '53
EAST GERMANY HUNGARY
SECRET
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FigureM7
USSR and China
Rest of Sino-Soviet Bloc
Non-Bloc
KI
1936-38 '48 '49 '50 '51 '52 '53
RUMANIA
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S-E-C-R-E-T
evidence exists in Communist theoretical writings which have espoused
a reappraisal of foreign trade policies.
Although the postwar developments of the trade pattern of each
Satellite generally displayed a trend toward a greater proportion of
trade with the USSR and Communist China and with the other European
Satellites, with a resulting decline in the share of trade with countries
outside the Bloc, there was little uniformity. The most rapid redirection
occurred in Bulgaria, Rumania, and East Germany, where a tremendous change
was obvious as early as 1948. The first available postwar data for Bul-
garia and Rumania indicated that the initial shifts in their trade patterns
were more predominantly in favor of greater trade with the other Satellites
and to a much greater extent at the expense of the non-Bloc area than was
the case in the more northern Satellites. This was followed by a second
reorientation in the Bulgarian and Rumanian trade pattern, which greatly
increased the proportion of trade turnover accounted for by the USSR and
Communist China at the expense of both intra-Satellite and extra-Bloc
commerce. The trade of East Germany and the other Satellites, however,
showed an almost continuous movement in the direction of more commerce
with both the USSR and Communist China and with the rest of the Satel-
lites.
In the postwar period the USSR and Communist China had a greater
proportion of the trade of Bulgaria, Rumania, and East Germany than of
the other European Satellites. In 1953, the latest year for which infor-
mation is complete, commerce with the USSR and Communist China contributed
over 50 percent of the trade turnover of Bulgaria, Rumania, and East Ger-
many, while the proportion was about 46 percent for Czechoslovakia and
less than 40 percent for Hungary and Poland. As might be expected, the
non-Bloc area shared least in the trade of Bulgaria and Rumania (14 per-
cent and 16 percent, respectively, in 1953) and most with Poland (30
percent in 1953). Intra-Satellite trade was greatest in the case of
Hungary and Poland (40 percent and 37 percent, respectively, in 1953)
and least in the case of East Germany, Bulgaria, and Rumania (all be-
tween 26 percent and 30 percent in 1953). Thus the geographical pattern
of European Satellite trade as of 1953 was as follows: Bulgaria and
Rumania and, to a lesser degree, East Germany were most completely tied
by trade bonds to the USSR and Communist China and least tied to the
other Satellites and non-Bloc countries. Hungary and Poland had the
smallest proportions of trade with the USSR and Communist China and the
largest proportions with other Satellites and non-Bloc countries. Czecho-
slovakia occupied an intermediate position in all respects.
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S-E-C-R-E--T
1. Distribution of Trade within the Sino-Soviet Bloc.*
The USSR, in 1953, was far and away the most important intra-
Bloc trading partner of each of the European Satellites. The value of
trade between the USSR and even the smallest (measured by the value of
trade turnover) of its-Satellite trading partners, Bulgaria, was barely
exceeded by the value of trade between the two most important intra-Sat-
ellite traders. During most of the postwar period the USSR's share of
the Satellites' commerce has been growing steadily. There have been
fluctuations, however. Between 1950 and 1953 the USSR's share of total
Rumanian trade vacillated between 53 and 60 percent; between 1951 and
1953 itsshare of Bulgarian commerce remained constant at about 58 per-
cent; and its share of Polish trade turnoverfell in 1953 (see Figure
7**) -
Communist China, whose prewar trade with the European Sat-
ellites was, with the exception of East Germany, of relatively minor
importance, has been gaining an increasing share of the total Satellite
trade turnover. In 1953, Communist China was a more important trading
partner of Czechoslovakia, East Germany, and Poland than was Hungary,
Rumania, or Bulgaria; it had become Czechoslovakia's third (after the
USSR and Poland) and East Germany'-s fourth (after the USSR, Poland, and
Czechoslovakia) most valuable intra-Bloc trading associate.
Measured by the value of trade turnover, the most important
bilateral relationships among the European Satellites in 1953 were be-
tween East Germany and Poland and between Czechoslovakia and Poland.
These were followed by the value of the trade of Rumania and Hungary
with Czechoslovakia. The relatively low volume of trade between such
highly developed countries as Czechoslovakia and East Germany is signi-
ficant. It highlights an already known fact: neither country has an
outstanding raw material to trade, and the economic structures of the
two countries are too similar to complement one another very -effectively.
A striking development of the period since 1948 has been the
rapid increase in the trade volume of East Germany, which now has the
largest total trade turnover among the Satellite countries. Next to Com-
munist China, it is the USSR's largest trading partner. In terms of its
prewar status inworld trade, however, East Germany is still trying to
* The discussion in this subsection refers to Table 46, which follows
on p. 105.
** Following p. 102.
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S-E-C-R-E-T
Geographic Distribution of the Trade Turnover of the European Satellites
with the Rest of the Sino-Soviet Bloc a/
1953
Bulgaria
Czechoslovakia
East Germany
Hungary
Poland
Rumania
Million
Million
Million
Million
Million
Million
Percent
US
Percent
US
r'ercent
US
Percent
US
Percent
US
Percent
US
Sino-Soviet Bloc
100
339
100
1,455
100
1,549
100
745
100
1,396
100
493
USSR
66
224
47
684
59
915
43
319
42
594
65
320
Communist China
1
4
11
166
7
113
5
40
4
59
N.A.
N.A.
Albania
N.A.
N.A.
N.A.
N.A.
4
N.A.
N.A.
6
N.A.
N.A.
Bulgaria
4
59
3
40
N.A.
N.A.
2
27
N.A.
N.A.
Czechoslovakia
17
59
8
119
18
137
16
219
28
138
East Germany
12
4o
8
119
10
76
16
228
10
48
Hungary
N.A.
N.A.
9
137
5
76
2
33
N.A.
N.A.
Poland
8
27
15
219
15
228
4
33
8
40
Rumania
N.A.
N.A.
9
138
3
48
N.A.
N.A.
3
40
-4
-15
-5
-67
6
19
140
14
190
-11
-53
a. Data are from Appendix A, Table 52.
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catch up. Even if allowances are made for the usual sharp differences
in the relative intensity of intranational and international commerce,
it seems likely that this rapid postwar trade expansion has only incom-
pletely compensated East Germany for the violent drop in interzonal ex-
change of goods. J
Czechoslovakia's intra-Satellite trade was most nearly equally
distributed. In terms of the percentage of trade turnover of each of the
other Satellites it ranked as the premier trading partner of every country
except East Germany. Poland's intra-Satellite trade was highly concentrated
with East Germany and Czechoslovakia, as was the intra-Satellite trade of
Bulgaria. Rumania heavily emphasized its trade with Czechoslovakia, whereas
in Hungary the role given to trade with Czechoslovakia was important but
less dominating. Therefore, on the basis of volume only, the maintenance
of open trade channels with Czechoslovakia is an important aspect of Sat-
ellite trade policy, although it is overshadowed completely by Soviet-Sat-
ellite trade relationships.
2. Distribution of Trade with Non-Bloc Countries.*
Table 47 shows the geographical pattern of European Satellite
trade in 1953 with countries outside the Sino-Soviet Bloc. As in the
past, Western Europe continued to absorb the greatest share of Satellite
trade with non-Bloc areas. In 1953, Western Europe's trade with the
Satellites constituted about 81 percent of their total non-Bloc trade.
Western Europe's share of the imports of the European Satellites as a
whole has risen significantly since 1948, while its share of the Satel-
lites' exports has fallen moderately. Within this general movement, how-
ever, Western Europe's share of Czechoslovak imports has fallen by more
than 16 percent; its share of Polish imports has increased by about 14 per-
cent; its share of Rumanian imports has more than doubled; and its shares
of the imports of the other Satellites have remained about constant. On
the export side, the most -significant decreases in Western Europe's shares
were -observed in its trade with Hungary and East Germany. Nevertheless, in
the postwar period the European Satellites as a whole maintained a favorable
balance of trade in regard to Western Europe owing mainly to the excess of
;:.exports over imports in Czechoslovak, Rumanian, and'Polish commerce.
The next most important Satellite trading area was the Near
East and Africa, with which the Satellites have been able to maintain a
* The discussion in this subsection refers to Tables 47, 48, and 49,
-which follow on pp. 107, 108, and 109, respectively.
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rather large favorable balance of trade. Seven percent of total Satel-
lite trade was transacted with this area in 1953. As a source of imports,
the Near East-African area was especially valuable to Hungary, Czechoslo-
vakia,, and Bulgaria. As a field for exports, the area was most important,
in percentage terms, to Rumania, followed closely by Hungary, Czechoslovakia,
and Bulgaria. In 1953 the Far East and the Latin American countries each
participated to the extent of 3.6 percent of the Satellites' non-Bloc trade
turnover. Satellite trade with Latin America was favorably balanced, while
trade with the Far East showed an unfavorable balance. Figures for 1954
show that a change was occurring: an unfavorable trade balance had developed
in regard to Latin America, and Satellite trade with the Far East was almost
balanced. Oceania's share of Satellite non-Bloc imports in 1953 was 5.6 per-
cent, significantly larger than in 1948. Nevertheless, its 1953 share of
Satellite non-Bloc exports, less than 1 percent, was less than 1948. This
change in the structure of trade gave rise to a large import surplus in
the balance of trade with Oceania.
Table 47
Geographic Distribution of the Total Trade Turnover
of the European Satellites with Non-Bloc Countries a/
1953
Country
Value
(Thousand US $)
Percent
United States and Canada
31.7
2.1
Western Europe
1,203.2
80.7
Near East and Africa
103.8
7.0
Far East
54.0
3.6
Oceania
44.7
3.0
Latin America
53.2
3.6
1,490.6
100.0
a. Data are from Appendix A, Table 53.
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Table 48
Geographic Distribution of the Trade of the European Satellites
with Non-Bloc Countries a/
1948, 1952, and 1953
1948
1952
Value
(Thousand
US $) Percent
Value
(Thousand
Us Percent
Value
(Thousand.
4)
Percent
,-_
US and Canada
124.5
13.4
1.7
0.2
2.2
0.3
4
Western Europe
649.6
70.1
527.2
78.4
553.7
80.
Near East and Africa
36.3
3.9
49.0
7.3
39.3
5.7
4
4
Far East
35.1
3.8
55.5
8.3
30.4
.
Oceania
8.6
0.9
.
18 3
.
2 7
38.7
5.6
6
Latin America
73.2
7.9
20.5
3.1
25.0
3.
27
3
0
100
672.2
100.0
689.3
100.0
Total
9
.
.
Exports
US and Canada
34.6
3.6
27.7
3.6
29.5
3.7
Western Europe
823.2
84.4
627.1
8o.4
649.5
81.2
Near East and Africa
52.1
5.3
63.4
8.1
64.5
8.0
Far East
19.3
2.0
20.9
2.7
23.6
2.9
Oceania
16.2
1.7
11.5
1.5
6.o
.7
Latin America
29.1
3.0
28.5
3.7
28.2
3.5
974.5 100.0 779.1 100.0 801.3 100.0
a. Data are from Appendix A, Table 53.
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Table 49
Geographic Distribution of the Trade of the Individual European Satellites
with Non-Bloc Countries J
1948 and 1952-54
1948
1952
1953
1954
1948
1952
19
Bulgaria
US and. Canada
13.4
J
J
b/
12.8
1.6
1.2
1.1
Western Europe
85.2
87.4
89.9
9V.7
74.4
89.0
85.9
92.3
Near East and Africa
J
11.0
7.4
4.4
11.8
9.3
12.4
6.5
Far East
Oceania
1.2
J
Y.
3.5
J
J
N.A.
1.0
J
J
J
J
J
J
Latin America
J
J
J
J
J
J
J
Czechoslovakia
US and Canada
8.9
6.4
2.2
2.4
2.1
Western Europe
74.0
65-1
61.8
63.3
74.0
66.3
70.8
59.9
Near East and Africa
5.5
14.4
9.9
11.7
7.8
16.6
14.0
15.6
Far East
4.3
10.9
11.9
6.9
3.6
5.6
5.2
6.5
Oceania
0.8
2.6
8.6
3.2
3.5
3.6
1.9
2.4
Latin America
6.5
6.7
7.7
14.2
4.7
5.9
7.2
13.5
East Germany
US and Canada
N.A.
V
N.A.
6.3
4.4
1.9
Western Europe
100
9
7
9 ?9
97.7
100
90.3
90.9
92.6
Near East and Africa
N.A.
bJ
1.9
J
N.A.
1.1
J
1.9
Far East
N.A.
J
J
1.0
N.A.
1.5
3.6
2.7
Oceania
N.A.
J
J
J
N.A.
J
J
J
Latin America
N.A.
N.A.
N.A.
J
N.A.
N.A.
N.A.
A.A.
Hungary
US and Canada
9.9
J
b
2.0
1.9
3.9
2.9
1.7
Western Europe
82.5
82.2
83.2
79.0
89.8
74.8
70.3
71.6
Near East and Africa
5.2
10.1
11.5
6.4
7.0
8.4
14.4
u.6
Far East
1.5
2.2
1.1
2.4
0.5
3.9
5.8
4.1
Oceania
J
J
1.2
J
Y.
1
J
J
Latin America
0.9
5.3
2.9
10.0
bJ
7.6
5.8
10.2
Poland
US and Canada
19.7
J
J
J
V
3.8
5.6
8.4
Western Europe
63.9
73.5
72.8
67.7
2
9
91.3
90.6
75.9
Near East and Africa
2.3
5.1
4.5
4.9
1.0
2.9
3.9
5.1
Far East
4.3
13.8
5.7
5.2
0.9
1.0
1.1
b
Oceania
1.5
5.8
11.9
9.0
J
J
J
b
Latin America
8.3
1.6
4.8
12.4
1.4
2.2
2.6
9.6
Rumania
US and Canada
17.3
J
J
b/
1.1
b/
b,J
J
Western Europe
43.6
91.5
92.4
73.4
79.4
79.3
76.3
80.6
Near East and Africa
2.1
3.4
2.9
12.7
11.4
17.3
19.2
10.7
.
Far East
2.5
3.3
J
J
J
J
J
J
Oceania
Latin America
3 4
J
1.6
J
3.4
N.A.
13.1
J
7,7
/
.It
bJ
2
J
7.6
a. Based on data in Appendix A, Table 53.
b. Less than 1 percent.
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For the Satellites as a whole, the least significant non-Bloc
trading area was the US and Canada. These two countries in 1953 contributed
only 0.3 percent of Satellite non-Bloc imports and purchased 3.7 percent of
Satellite non-Bloc exports. This is in sharp contrast to 1948 when the share
of non-Bloc imports of the Satellites from the US and Canada was in excess
of 13 percent, and the purchases of US and Canada were 3.5 percent of non-
Bloc exports of the Satellites. This drastic drop in import shares is a
measure of the effectiveness of the US embargo on trade in strategic goods
with the Satellites. However, Satellite trade with the US was greater in
1954 than it had been in other recent years.
The increased European Satellite activity in concluding trade
agreements with non-Bloc areas, evident in 1953 .and 1954, is, perhaps,
indicative of future trends. Before 1953, most of these agreements were
concluded with Western European countries; in 1953 and 1954, however, the
Satellites greatly increased the number of commercial -agreements with the
countries of the Near East, Asia, and Latin America. Hence, it appears
that the Satellites have undertaken to amplify their trade with the more
underdeveloped areas outside the Sino-Soviet Bloc. A further development,
which may be of some economic significance to the Satellites depending on
the nature of the particular trade agreements, has been the renewal of
Satellite-Yugoslav commercial relations.
C. Commodity Composition of Trade.
As with the geographical pattern of trade, the commodity composi-
tion of Satellite trade has been extensively transformed in the postwar
period. This transformation has taken on the following characteristics:
(1) The importance of trade in machinery and. equipment has expanded along
with the increaaed development of heavy industry and the growth of both
the demand for and the ability to supply these goods. (2) While there
has been a continuing demand for semifinished materials and raw materials
for consumer goods production (especially for textile fibers), semifinished
-manufactures and raw materials to satisfy industrial needs (particularly
metals and minerals) have been increasingly required. (3) Fuel resources
have been consumed in growing quantities leading to new international flows
of coal and petroleum. (4) The Satellites, as a group, are now net importers
of grain and perhaps of foodstuffs-in general.
In the case of Czechoslovakia and East Germany, the above changes
were only extreme accentuations of the previously existing product-mix in
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foreign trade. Bulgaria and Rumania displayed a contrasting commodity
configuration in the prewar period, exporting chiefly foodstuffs and raw
materials and importing mainly manufactures. In Bulgaria the prewar
pattern has been essentially maintained, although with two important
exceptions: the share in exports of tobacco, fruits, and vegetables has
increased, whereas machinery and equipment have overwhelmingly replaced
consumer goods in Bulgarian imports. In Rumania, also, imports of invest-
ment goods have largely superseded imports of consumer goods; exports of
industrial products have now assumed some importance, while the large
prewar exports of grain have now become of only occasional and marginal
significance. Poland and Hungary have had the most sweeping changes in
the commodity composition of their trade. Poland now imports rather than
exports grain and Hungary is only a sporadic grain exporter. In both
countries, the products of heavy industry enter much more heavily than
before the war into both imports and exports.
1. Commodity Pattern of Intra-Bloc Trade.
In the postwar period the commodity pattern of the trade of
the European Satellites developed into one which was largely geared to
feed their rapidly growing industrial sector with raw materials and to
provide markets for the output of their enlarged industrial capacity.
Raw materials, industrial machinery, heavy equipment, fuels, transportation
equipment, and agricultural products constituted the bulk of intra-Bloc
trade. Among the Satellites, the three northern countries were major
suppliers of industrial and heavy equipment, in addition to providing
fuels and raw materials. The other Satellites were major sources of
agricultural products and crude materials. The USSR provided a market
for the machinery, transportation equipment, and raw material surpluses
of the more industrialized Satellites. The less industrialized Satellites
supplied the USSR with foodstuffs, raw materials, and some transportation
equipment.
On the import side, the Satellites absorbed mainly foodstuffs,
industrial equipment, agricultural equipment, and industrial raw materials
from the USSR. Communist China provided the Satellites with foodstuffs
and metallic ores, in compensation for which it received industrial machinery,
heavy equipment, raw materials, fuels, and some consumer goods.
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S-E-C-R-E-T
a. Trade in Machinery and Equipment.
Trade in machinery and equipment amounted to about one-
third of the tot-al exports of goods moving within the Sino-Soviet Bloc,
as compared with a share of about one-seventh in the exports of the non-
Bloc area. The major exporter of capital goods within the Bloc was East
Germany. Over one-half of its exports of machinery and equipment went to
the USSR, by-far the largest Bloc importer of this line of goods. Czecho-
slovakia and Hungary -al-so exported substantial quantities of their produc-
tion of capital goods to other Bloc countries, especially to the USSR.
Poland and Rumania exported some capital equipment, but, on balance, they
were substantial net importers of these products, with Poland being the
second largest buyer within the Bloc.
Electrotechnical equipment formed an important commodity
-group in intra-Bloc trade. East Germany, the major exporter of these
products, sent electrical, electronic, and communications equipment to
all other countries of the Bloc. Hungary and Czechoslovakia exported
appreciable quantities of this group of products but also imported
supplementary items from East Germany and from each other. Poland-sup-
plied some electrical equipment to the USSR and Communist China.
All the European Satellites, with the exception of Bul-
garia and Albania, produced some form of wheeled vehicle that was ex-
ported to another Soviet Bloc country, especially Communist China. East
Germany and Czechoslovakia both exported passenger cars, trucks, and
tractors. Poland and Rumania_produced various types of tractors for
export but satisfied nearly all of their requirements for other types
of vehicles by imports originating within the Bloc. Hungary's exports
included considerable numbers of buses and one type of tractor; these
were imported mainly by East Germany, Czechoslovakia, and Communist China.
Nearly all types of railroad equipment were.exported by
Hungary, Poland, Czechoslovakia, and East Germany. In each case, the
USSR was the major recipient of the rolling stock, but there was also
considerable trade-among the Satellite producers. Bulgaria and Albania
fulfilled almost all of their needs for-railroad equipment by imports
from other Bloc countries.
East Germany and Poland were suppliers of the larger
types of seagoing shipping. -Seventy-six percent of Soviet imports of
ships originated from yards in these two countries. The other Satellites
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S-E-C-R-E-T
provided the USSR with vessels of other types, mainly for fishing and
use on inland waterways. Hungary, for instance, has contracted to
build 11 large river and oceangoing barges for the USSR.
Other types of capital equipment exported in significant
quantities by the Satellites were machine tools by East Germany and
Czechoslovakia; mining machinery by Poland; and oil drilling equipment
and pipes and tubes by Rumania. Czechoslovakia was the sole Satellite
exporter of aircraft; something like 22 percent of its domestic output
has been shipped to other Bloc countries.
b. Trade in Crude Materials and Semifinished Goods.
Until recently the USSR has been the major source of iron
ore for the European Satellites, supplying more than one-half of the to-
tal requirements of their steel industries. Bulgaria was the only Satel-
lite country exporting iron ore in any appreciable amounts. Its exports
found markets mainly in Hungary, Czechoslovakia, and East Germany, which
were also major importers of iron ore from all sources.
The Satellites, collectively, were net importers of steel
material. Most of this came from the USSR in the form of scrap, pig iron,
and crude and semifinished steel but did not represent a drain on the
Soviet economy, because the materials usually were reimported into the
USSR in a more finished state of production. Czechoslovakia delivered
considerable quantities of semifinished steel products. Poland and Hungary
were also net exporters, but the potential Satellite surplus provided by
these three countries was overbalanced by the large deficit of East Ger-
many and the smaller ones of Bulgaria and Rumania. The status of pig iron
in Satellite trade was similar to that of steel -- though not significant
exporters, Czechoslovakia and Poland were at least self-sufficient, and
the other Satellites all imported large quantities.
Although the USSR was the chief supplier of most other
types of industrial raw materials, some of the Satellites had important
exportable surpluses. Bulgaria, Hungary, and Rumania were major Satel-
lite sources of manganese ore; Poland, Czechoslovakia, and East Germany
were major importers. Hungary and Rumania were the sole exporters of
bauxite; East Germany was the major Satellite importer. Albania, Bul-
garia, and Rumania were suppliers of pyrites ores; the other Satellites
consumed the bulk of the exports of this commodity. Raw concentrates of
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zinc and lead moved from Bulgaria to Poland, Czechoslovakia, and the
USSR; refined zinc and zinc products moved from Poland, Rumania, and
the USSR to the other Satellites. Hungary was the major Satellite
source of finished aluminum; the USSR and East Germany were the main
recipients of this product. Also, Albania, Bulgaria, and Rumania were
totally dependent upon foreign supplies of aluminum, whereas Czecho-
slovakia and Poland were able to meet their own requirements internally.
In addition, Albania exported chrome ore; Bulgaria was an important
Satellite source of hides and leather; and Rumania was a major supplier
of timber. With the exception of materials useful to the ceramics in-
dustry, the raw material exports of Czechoslovakia were of minor import-
ance.
All the Satellites produced and exchanged chemical
compounds. East Germany was the predominant chemical supplierfor
Czechoslovakia, Hungary, Poland, and the USSR. East Germany and the
USSR were important markets for the Polish chemical industry. Czecho-
slovakia had a large exportable surplus of sulfuric acid and coal tar
derivatives, which was absorbed by all the other Satellites, except
Poland, and by the USSR.
The Satellite needs for textile fibers were satisfied
mainly within the Soviet Bloc. The USSR provided approximately three-
quarters of the Satellite consumption of raw cotton, but there was -still
a shortage-of the long-staple variety. The bulk of the wool requirements
was supplied by Bloc countries or neighboring countries such as Afghanistan,
but imports from Commonwealth countries were important as a source of high-
grade apparel wool.
c. Trade in Fuels.
Poland was the major exporter of coal and metallurgical
coke. Almost all of these exports, which represented about 30 percent
of Polish production,: went to other Sino-Soviet Bloc countries. The
USSR took about 9 million tons, but East Germany was also an importer
of -substantial amounts, as was Czechoslovakia, although the latter was
also the second most important Satellite exporter of these products.
Polish and Czechoslovak shipments satisfied. nearly all of Hungary's
coal and coke requirements. The USSR exported increasing quantities
of coke to the Satellites, but at the same time it was a net importer
of hard coal. East Germany was the leading exporter of brown coal
briquettes.
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The major Satellite source of petroleum and petroleum
products was Rumania, which exported most of its domestic production.
In 1954, Rumania shipped approximately 5 million metric tons to other
Sino-Soviet Bloc countries -- 87 percent went to the USSR, 11 percent
to other Satellites, and the rest to Communist China. About 750,000
metric tons of Hungarian and East German petroleum products entered
into intra-Bloc trade. Albania, too, exported sizable quantities of
petroleum to the Bloc. The Satellites also absorbed petroleum products
from the USSR, which was the major supplier of aviation fuels and gen-
eral lubricants.
d. Trade in Foodstuffs and Consumer Goods.
Certain changes which have occurred in trade in food-
stuffs within the Sino-Soviet Bloc have been, at least partly, a re-
sultant of the program ofrapid industrialization undertaken by the
Satellite regimes. In the prewar period, the Satellites produced a
surplus of grains. In recent years the USSR has had to supply the
Satellites with between 2 million and 3 million tons of grain annually,
making it the main grain exporter within the Bloc. Of the traditional
prewar Satellite grain exporters -- Bulgaria, Rumania, Hungary, and
Poland -- only Bulgaria still has a reliable, though small, export
surplus. In the last few years, Poland has become a heavy buyer of
grain; Hungary and Rumania have been only erratic exporters of grain
to other Bloc'countries.* East Germany and Czechoslovakia, importing
about one-third of their grain requirements from other members of the
Bloc, have become more dependent upon foreign-grown food than before
the war. In Czechoslovakia, for example, food accounted for about 13
percent of total imports in 1937 whereas in 1953 it accounted for
almost 30 percent.
Intra-Bloc trade in other foodstuffs and consumer goods
also has grown in importance. Most of these commodities were shipped
to the USSR, which in 1953 had planned to import about 2.7 billion rubles
* In the immediate prewar period, Hungary and Rumania were able to
maintain a net export of grain even though harvests were bad. In the
postwar, period, until the implementation of the "new course," a surplus
of grain exports was continued, often at the expense of internal supplies.
Since the "new course," however, the countries have been net importers
of grain in years when harvests were poor.
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worth of foodstuffs: and consumer goods-from the countries of the Bloc.
Thus substantial amounts of sugar from the Satellites, chiefly from
Poland, East Germany, and Czechoslovakia, went to the USSR and the
other Bloc members.. Bulgaria exported significant quantities of tobac-
co and also fruits and vegetables. Both Poland and Hungary supplied
the Bloc with meat and poultry products.
Among manufactured consumer goods, Czechoslovakia,
Hungary, and Poland:were sources of textiles, shoes, glassware, pottery,
and furniture. Bulgaria exported certain lines of textiles and cigarettes.
Rumania's main exportable consumer good was textile products. In East Ger-
many, consumer goods accounted for a relatively small share of exports,
but efforts were being made to develop an export line in ceramics, toys,
and textiles.
2. Commodity Pattern of Trade with Non-Bloc Countries.
The product mix of the 1953 trade of the European Satellites
with countries outside of the Sino=Soviet Bloc is apparent from an examina-
tion of Figures 8 and 9.* Crude materials and manufactured goods made up
most of the Satellite imports from the non-Bloc area. Machinery and trans-
portation equipment and foodstuffs were also important categories of goods
moving into the Satellites from outside the Bloc. Among the Satellites,
Czechoslovakia, Hungary, and Poland were large importers of crude materials,
especially rubber, cotton, wool, and iron ore from Malaya, Indonesia, Turkey,
Egypt, Australia, Belgium, Sweden, and India. East Germany was highly
reliant upon non-Bloc food supplies, particularly upon the Scandinavian
countries for dairy and fish products. Manufactures from Western Europe
weighted heavily in the imports of Rumania and Bulgaria.
In order to pay for their imports from outside the Bloc, the
Satellites supplied chiefly foodstuffs and a group of products composed
of minerals, fuels, lubricants, and the :Like. Crude materials, manufactures,
and machinery and transportation equipment also were exported to the non-
Bloc area. Bulgaria's exports were largely composed of foodstuffs going
to Western Europe and Egypt. Foodstuffs and fuels were important groups
of exports from Poland and Rumania. The share of Polish exports contributed
by the coal industry declined, however, in 1953, while the proportion
* Following p. 116. See also Appendix A, Tables 54 and 55.
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SECRET
COMMODITY' COMPOSITION OF IMPORTS FROM THE WEST, 1953
(In thousands of current, U. S. dollars)
677,592 28,574
Other
13%
Machinery & Transport
Equipment
14%
Manufactured Goods
22%
Chemicals
7%
Crude Materials
30%
Foodstuffs
14%
Other
15%
Machinery &
Transport
Equipment
Manufactured
Goods
32%
Chemicals
14%
Crude
Materials
24%
135,607 159,426 81,484 209,530 62,971
Other
11%
Machinery &
Transport
Equipment
12% Machinery &
Transport
Manufactured Equipment
Goods Manufactured 13%
11% Goods - -
Other
19%
Other
18%
Chemicals 24%
Chemicals
12%
Manufactured
Goods
22%
Crude Crude
Materials Materials
41% 13%
Foodstuffs
18%
Foodstuffs
32%
Other
7% Other
11%
Machinery &
Transport
Equipment
24%
Machinery &
Transport
Equipment
25%
Manufactured
Goods
20%
Manufactured
Goods
45%
Crude
Materials
38%
Chemicals
6%
Foodstuffs
Crude
Materials
19%
0 5% 0
Crude
Materials
38%
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SECRET
COMMODITY COMPOSITION OF EXPORTS TO THE WEST, 1953
803,016 29,039 204,664 167,630
Other
166
Fats and Oils 1%
Machinery & Transport
Equipment 8%
Chemicals 4%
Manufactured Goods
13%
Other
11%
Manufactured
Goods
11% .
Other Other
24% 24%
Crude Materials Machinery & Machinery &
13% Transport Transport
Equipment Equipment
14% 14%
Manufactured
Goods
Crude Materials
10%
Minerals, Fuels,
Lubes, etc.
24%
Foodstuffs
24%
Manufactured
Goods
26%
Foodstuffs
65%
Crude Materials
14%
Minerals, Fuels,
Lubes, etc. 6%
Foodstuffs
16%
Chemicals
20%
Crude Materials
10%
66,342 270,657 64,684
Other 4%
Manufactured Other
Goods 5% 11%
Crude Materials
Other 7%
Crude Materials
33% 14%
Fats and Oils 5%
Machinery &
Transport
Equipment
12%
Manufactured
Goods
Minerals, Fuels,
Lubes, etc.
44%
Minerals, Fuels,
Lubes, etc.
43%
Foodstuffs
40% Foodstuffs
32%
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9rcAw
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attributed to foodstuffs increased. The petroleum industry's share of
Rumanian exports increased significantly over 1952 levels. Manufactured
goods bulked large in the export structure of Czechoslovakia and Hungary.
Of all the Satellites, only East Germany exported no foodstuffs to non-
Bloc countries. Its chemical industry, on the other hand, was a major
source of Satellite sales of chemicals outside of the Sino-Soviet Bloc.
D. Economic Interdependence and Plan Coordination.
Since the introduction of the "new course" in 195, there have
been several developments affecting the related matters of the economic
interdependence of the Sino-Soviet Bloc countries, Soviet control of
European Satellite economic development, and intra-Bloc coordination of
economic plans. Some of these changes have tended to reduce the degree
of direct Soviet control of the Satellite economies and, in a sense, the
degree of interdependence among the Bloc economies. Other changes have
had the effect of increasing the degree of coordination of production,
investment, and foreign trade plans. So far, however, this coordination
appears to be largely bilateral and, in the case of production and invest-
ment plans, selective and sporadic. Much uncertainty remains concerning
the degree of control exercised over the formulation of detailed Satel-
lite economic plans by the USSR or the Soviet-dominated Council for
Economic Mutual Assistance (CEMA). It seems clear, in any case, that
Soviet control over broad economic policies in the Satellites and thus
over major aspects of Satellite economic development is secure and
effective.
1. Interdependence of the Economies.
Although it is premature to speak of the USSR and the European
Satellites as constituting an economic unit, there has been a considerable
growth since the war in the degree of interdependence of the Soviet and
Satellite economies. Several familiar developments affecting the Satel-
lite economies have contributed to this increased interdependence: (a)
the postwar assumption of political. power by Communist regimes subservient
to the USSR and the resulting reorientation of economic relations toward
other Bloc countries; (b) the adaptation of investment and production
in some of the Satellites to meet Soviet demands for specific types of
goods as reparations payments; (c) complete or partial ownership by the
USSR of key enterprises in East Germany, Hungary, Rumania, and Bulgaria;
and (d) the growing dependence of the Satellites on the. USSR and on one
another for raw materials, certain types of capital equipment, and tech-
nical assistance as they undertook programs of rapid industrial expansion.
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The combined effect of these developments was a redirection
of each Satellite's trade toward the USSR, toward other European Satel-
lites, and, to a smaller extent, toward Communist China. Whereas non-
Bloc countries accounted for roughly 75 to 90 percent of the trade turn-
over of individual Satellites before the war, the proportions ranged from
about 15 to 30 percent in 1953. A large part of this shift had been accom-
plished by 1948 in Rumania, Bulgaria, and :East Germany. In all three
of these countries, the percentage of total trade turnover with the West
had levelled off or had begun to increase slightly 2 or 3 years before
the announcement of the "new course." In Czechoslovakia, Hungary, and
Poland, on the other hand, the reorientation of trade toward theBloc
took place more gradually but continued almost without interruption
until 1954.
The rapid growth in trade between the Bloc countries has,
of course, been paralleled by an -extension.of institutional arrange-
ments to promote such commerce and to gear the exchanges of goods into
the various national economic plans. Among these arrangements may be
mentioned the councils for economic and technical collaboration, some
inter-Satellite enterprises, commissions attempting to standardize
industrial specifications, and the Council. for Economic Mutual Assist-
ance. Soviet advisory groups, economic missions attached to the Soviet
embassies in the Satellites, and the Soviet corporations (in East Ger-
many) and the Joint Soviet-Satellite enterprises (in Hungary, Rumania,
and Bulgaria) also furthered the growth of trade in the more special
sense of insuring high priorities for Soviet reparations-deliveries,
transfer of Soviet profits in kind, and other exports to the USSR.
A major feature of the new course" policy was the intention
of the USSR and the Satellites to expand foreign trade considerably,
including some increase in trade with non-Bloc countries. As already
indicated, East-West trade has increased significantly since mid-1953,
probably more than total Satellite trade. The extent of the increase
in East-West trade in 1954 probably could not be expected to be repeated
year after year, even if the Satellites and the USSR continue policies
favorable to such exchanges. Moreover, slight changes in the presently
small proportions of total Satellite trade with non-Bloc countries have
limited significance from the viewpoint of Bloc interdependence and
cooperationbecause of the political relationships and international
economic institutions which have been established within the Bloc.
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2. Soviet Control of the Satellite Economies.
Since the beginning of the "new course," the USSR has relin-
quished its interests in certain enterprises in the Satellites and has
reduced the number of Soviet economic and technical advisers in the
Satellites. These moves, added to the previous cessation of Satellite
reparations payments, have somewhat reduced Soviet opportunities for
direct, detailed control of specific enterprises or industries in the
Satellites. At the end of World War II, Soviet negotiators insisted
that reparations payments by former enemy states be made in goods
rather than in currency. As a result, the USSR was able to command a
considerable voice in the determination of the pattern of investment,
production, and exports of East Germany, Hungary, Rumania, and Bulgaria.
With the discontinuance of reparations payments, this means of direct
Soviet control was eliminated. Because of the high priority which
exports to the USSR have in the Satellites, and because of Satellite
dependence on imports from the USSR, however, some of the same results
can be obtained in all of the Satellites through the regular Soviet-
Satellite trade agreements.
The extent of overt Soviet economic control has also been
reduced by the USSR's relinquishment of its interests in most of the
joint companies in Rumania, Hungary, and Bulgaria and by the return of
all of the Soviet corporations in East Germany with the exception of
the uranium mining enterprise. In general, however, the close Party
and government ties, Soviet dominance in Satellite trade, and the re-
maining economic institutions are sufficient to permit a large degree
of direct and indirect control. of over-all Satellite economic develop-
ment by the USSR. The degree of this control does not appear to have
changed significantly during the past 2 years.
3. Coordination of Economic Plans.
The nature and extent of plan coordination among the Satel-
lites and the USSR are of special interest at present because of the
above-mentioned instances of reduced direct Soviet control and, more
importantly, because of the approach of the next series of lo-term
economic plans, which will cover the same time period (19.56-60) in the
USSR and all of the European Satellites except Bulgaria. Information
on the subject of plan coordination, and particularly on the role of
CEMA. in such activities, is rather meager in amount and, in many instances,
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
is difficult to evaluate and interpret. Consequently, opinions concerning
the extent and significance of plan coordination and the nature of CEMA's
participation in such activities vary considerably.
The consensus of opinion in the intelligence community con-
cerning this matter is expressed in a recent publication by the Economic
Intelligence Committee. U 4J This report states that CEMA'-s "activities
have been conducted with great secrecy" and that information about
the organization is "extremely sparse," but that the broad purpose of
CEMA "-seems to-be the coordination of the economies of the member countries
within a general economic plan, and a harmonious specialization of the
Satellite economies within limits set by Soviet policies." More specifi-
cally, it appears probable that CEMA has assisted in arrangements for a
few inter-Satellite development projects, performed some coordinating
functions with respect to Bloc trade.plans, and exercised some functions
in the field of long-term planning and material allocation. While it
may supplement other, Soviet control mechanisms in conveying Soviet deci-
sions on economic policy to the-planning commissions in the Satellites
and observing their implementation, there is little information indicating
coordination by CEMA of over-all national production and investment plans.
There apparently area-some instances, however, of coordination of invest-
ment and production plans for -a particular commodity-or industry between
one or more pairs of Satellites. In almost allreports of CEMA activities,
its part in the proceedings is very uncertain. Interpretation is also
hampered seriously by the lack of information. regarding CEMA's relations
with Soviet governmental agencies.
Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
S-E-C-R-E-T
APPENDIX A
STATISTICAL TABLES
Table 50
Indexes of Gross National Product and Production
in Selected Economic Sectors for the European Satellites J
1938 and 1948-54
1953
= 100
Country
28
1949 1950
1951
j2
_
1953 1954
Gross National Product
European Satellites
95
69
74 83
88
93
100
105
Bulgaria
83
87
85 90
94
97
100
105
Czechoslovakia
82
76
81 85
86
93
100
103
East Germany
108
6o
64 76
85
94
100
106
Hgry
84
67
75 82
91
96
loo
lol
Poland
91
69
76 85
88
go
loo
l08
Rumania
106
88
89 93
102
93
100
103
Industry Sector
European Satellites
73
48
56
68
78
88
100
108
Bulgaria
51
52
57
69
79
92
100
log
Czechoslovakia
56
65
72
74
78
87
100
l04
East Germany
101
37
44
64
78
91
100
110
Hungary
55
48
58
69
82
93
100
103
Poland
56
49
59
68
76
83
100
111
Rumania
50
6o
71
81
90
100
107
a. Agricultural sector indexes appear in Section V.
- 121 -
Transportation and Communications Sector
European Satellites
6
6
57
66
73
81
90
100
106
Bulgaria
41
5
70
76
83
90
100
105
Czechoslovakia
45
62
70
77
78
93
100
105
East Germany
9
54
67
69
80
88
100
106
Hungary
2
67
75
84
92
100
100
Poland
58
55
64
74
83
89
loo
108
Rumania
56
56
63
72
83
89
100
100
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
S-E-C-R-E-T
Output of Selected Products in the European Satellites and the USSR
1954
Total
European Satel-
*
Czecho-
East
G
Hun
ary
Poland
Rumania
European
Satellites
USSR
lites as Percent
of USSR
Albania a
Bulgaria
Slovakia
ermany
g
d
t
66
14
000
0
45
uc
s
Energy pro
w
r
t
i
Million kilowatt-hours
90
1,710
13,800
26,000
5,100
,400
4,ooo
,100
2
7,
10
0
.
244
9
e
c po
Elec
r
Lignite and brown coal
Thousand metric tons
303
8,360
37,740
180,722
15,100
5,900
600
4,550
450
5
257,0
248
119
,95
243
050
.
49.1
Thousand metric tons
440
21,560
2,648
2,550
,
,
8
8
4
31
Hard coal
li
Thousand metric tons
5
N.A.
260 b
770
270
230 J
2,800
4,335
2
6
0
13,
88
.
26
6
ne
Gaso
l fuel
Di
Thousand metric tons
5
N.A.
220
730
320
180
1,200
,
55
12
2
9,9
600
53
.
22
9
ese
Crude oil J
l
Thousand metric tons
260
50
135
0
1,118
230
10,500
4
93
,
8
422
,
100
32
.
26
2
Meta
s
hed steel
i
Fi
Thousand metric tons
40
3,000
1,786
756
2,300
0
5
,
718
,
800
29
.
25.9
n
s
n
i
Pi
Thousand metric tons
0
2,800
1,318
700
2,400
500
7,
6
,
404
8
16
ro
g
i
d
Thousand metric tons
2.5
o.6
42.3
0
20.0
1.0
6
7.9
6
880
.
5
154
copper
ne
Ref
Bauxite
Thousand metric tons
0
0
0
1,300
0
0
2
2
0
1,3
80
7
440
.
18.3
imar
aluminum
P
Thousand metric tons
0
20.0
24.0
32.b
2.5
.
2
.
13
7
70
20
y
r
Secondary aluminum
Thousand metric tons
o
1.5
10.0
1.5
0.5
4
0.
0
10
.
118
0
193
.6
20
Lead
Thousand metric tons
47.0
10.0
19.6
0
31.
.
0
.
3
2
6
53
Antimony
Thousand metric tons
0
3.0
0.2
0
0
0
0
0
250
.
200
1
32,000
3
Mercury
ti
Flasks (34.5 kg)
Thousand metric tons
0
1,000
n
n_6
o
0
0
6
,
0.6
4
13
213
.8
89
4
n
Primary
Zinc
Thousand metric tons
24.0
0
3.8
0
157.0
5.
190.
.
Chemicals
0
11
0
453
6
58
545.0
1
3,150
49.0
Sulfuric acid
Thousand metric tons
i6.o
367.1
531.3
6
9.
4
0
.
1
96
.
12
0
,
548.4
1,420
38.6
Nitric acid
Thousand metric tons J
48.0
90.3
8.0
2
0
3
.
16
0
.
110
0
.
0
9
508.1
588
86.4
Synthetic ammonia
Caustic soda
Thousand metric tons J
Thousand metric tons
19.6
o
43.5
48.9
310.
222.2
.
13.2
8
o
.
85.5
6
0
.
27.9
19
5
397.7
276.2
533
296
74.6
93.3
Chlorine
Thousand metric tons
o
36.5
206.2
.
8
.
200
0
.
24
7
101.4
1
372
296
Calcium carbide
Refined benzol
Thousand metric tons
Thousand metric tons
7.2
o
92.0
63.7
769.0
10.9
.5
o
0
.
95.0
13
5
.
1.7
3
0
,
171.3
26.7
335
104
51.1
25.7
Toluol
Thousand metric tons
0
9.2
3.7
.
1
.
0
05
18
7
34
55
Refined phenol
Thousand metric tons
0
4.4
11.0
0.2
8
3.
26
2
.
0
5
.
51.6
105
49.1
Naphthalene
Reclaimed rubber
Synthetic rubber
Thousand metric tons
Thousand metric tons
Thousand metric tons
o
0.2
o
18.7
9.5
2.0
5.4
5.5
66.3
0.
Negligible
o
1
0
.
6.0
5.5
420
.
Negligible
0
145
21.2
73.8
854
3
66
213
11,350
32
34.6
34.0
Rubber tires
Thousands
no
1,850
1,139
9
,
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
Table 51
output of Selected Products in the European Satellites and the USSR
1954
(Continued)
J*
Czecho- East
Germa
m
l
ki
Hungary
Poland
Rumania
Total
European
Satellites
European Satel-
lites as Percent
USSR of. USSR
Units Albania
~
a
ova
Bulgaria s
Building materials
t
C
Thousand metric tons
900 2,400 2,621
1,160
3,600
2,000
8
12,726
8
19,000
16
300
67
63
1
emen
Bricks
Millions
690 1,945 2,146
1,420
3,294
1
7
9
10,2
,
.
Forest products
28
5
165
17.3
Fuel wood
Million cubic meters 1.8
7.5 2.5 3.5
4
2.0
1
0
3.7
6
10
7.5
9
9
.
43.0
245
17.6
Industrial wood
Million cubic. meters 0.9
9.
3.2 8.0
.
.
.
and equipment
Machiner
200
60
92
000
65
y
Machine tools
Units
100 18,500 28,000
3,400
9,000
1,200
b
,
40
000
,
000
313
13
Trucks
Units
0 12,000 11,000
5,500
11,500
le
Negligi
,
8
200
,
500
146
26
1
Tractors
Units
0 14,000 7,500
4,000
7,700
5,000
3
,
8
80
,
000
75
.
51
er cars
Passen
Units
0 20,000 16,000
0
2,380
0
3
,3
28
600
,
160
000
18
g
arin
s
B
Thousands
111800 12,500
1,000
2,100
1,200
4
,
10
,
500
182
g
e
Steam locomotives
Units
0 300 Negligible
150
300
1
0
9
Freight cars
Units (2-axle
t
i
l
)
800 15,500 12,300
8,000
16,500
7,000
60,100
131,000
45.9
Railway passenger cars
Turbines
en
equ
va
s
Units
Thousand megawatts
Negligible 480 1,020
Negligible 1,090 590
440
120
700
100
225
40
4
2,865
1,944
610
6
2,880
4,500
000
11
99.0
43
60
ic motors
El
t
Thousand kilowatts
450 2,300 1,750
800
970
0
3
,
,
600
40
ec
r
Generators
Thousand kilowatts
16 900 890
260
15
150
2,231
5,
Electrical wire
6.4
18.5
3.9
75.8
90
84
and cable
Shipbuilding
5,300
0
0
0
5,300
158,000
3.4
Naval vessels
Oceangoing and
33,482
9,600
71,000
6,300
120,782
137,000
88.2
harbor vessels
Inland vessels
d
ower
Horse
1,014 19,200 9,000
91000
N.A.
2,000
40,214
66,3oo
48
6o.6
4
8
Self-propelle
elled
ro
N
f
p
Deadweight tons
11,463 2,400 0
0
N .A.
22,000
35,863
4
,000
7
000
48
.
98
p
onsel
-p
Fishing vessels
Gross register tons
0 0 37,250
0
9,800
0
7,050
,
Military end items
Aircraft
Units
0 855 0
24
125
24
1,208
000
5,649
7
15
18.2
14
Tanks
Units
0 500 0
0
4
500
000
1
0
0
000
10
1,
395
E
0
,
400,000
99
S-a11 arms
Pieces
0 170,000 20,000
5,000
5
,
,
,
1
200
278
660
.6
Ammunition
Short tons
900 10,000 200
3,000
2,000
1,100
7,
,
- 123 -
S-E-C-R-E-T
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
S-E-C-R-E-T
Output of Selected Products in the European Satellites and the USSR
1954
(Continued)
Units
Albania 1
Bulgaria
Czecho-
slovakia
Germany
Htw
ar
P
l
Total
European
European Satel-
lites as Percent
g
y
o
and
Rumania
Satellites
USSR
of USSR
Tndustrial crops
Cotton, ginned
W
l (
a
Thousand metric tons
4.3
18.5
0
0
2.5
0
7.5
8
32
1
410
oo
gre
se basis)
H
fib
Thousand metric tons
2.6
13.6
2.0
4.5
3.3
4.6
24.3
.
54
9
,
2
2.3
emp
er
Flax (s
ut
h
d b
i
)
Thousand metric tons
Th
m
6.o
4.1
2.5
16.7
6.2
31.4
.
_66.9
35
178
30.5
c
c
e
as
s
S
b
ousand
etric tons
1.0
13.0
8.0
3.9
38.1
6.4
70
4
400
37.5
ugar
eets
Thousand metric tons
50
425
4,430
6,000
1,866
6,565
862
.
20,198
19,000
12
106
Food crops
Wheat
Thousand metric tons
112
2,000
1,295
848
1
452
1
939
058
2
4
6
4
Rye
Barley
Thousand metric tons
Th
u
d
t
i
4
264
1,071
1,835
,
444
,
5,932
,
120
9,70
9,670
,
3
00
20
200
26.6
47
9
Oats
o
san
me
r
c tons
Thousand metric tons
8
10
419
130
1,054
1
008
535
4
457
1,o94
360
3,927
,
7,100
.
55
Corn
Th
,
1,0
3
252
2,093
312
4
848
12
700
38
2
Rice
ousand metric tons
Th
d
120
808
N.A.
N.A.
1,793
N.A.
2,890
,
5
611
,
800
3
.
148
Potatoes
ousan
metric tons
Th
d
7
25
0
0
40
0
48
,
120
,
400
30
ousan
metric tons
4
85
5,100
11,700
1,548
30,375
800
49,612
67,200
73.8
Processed foods
_..
Fiour 'wueat and rye)
A
i
al f
Thousand metric tons
94
1,207
1,603
1.900
1,462
159
4
1
250
11
675
40
000
n
m
at
V
tabl
Thousand metric tons
2
23
114
187
81
,
319
,
40
,
766
,
4
29
6
ege
e oils
S
(
)
Thousand metric tons
3
32
16
38
50
50
63
252
75
1
80
1
1
8
ugar
raw
Thousand metric tons
6
55
642
685
265
950
2
,3
1
.3
Meat
Thousand metric tons
16
114
48
57
' 715
3,300
82
Milk
Th
3
534
203
766
2
2
238
950
3
6
56
ousand metric tons
438
3,574
4,644
1,115
9,010
1,790
,
20,571
,
27,000
.
76
Shoes and textiles
Leather footwear
Cott
n f
bri
Million pairs
1.4
34.7
19.3
10.5
22.6
10.3
98
8
280
o
a
c
W
l f
b
Million linear meters
124
355.0
222.8
258.1
523.0
238
7
.
1
721
6
60
35
oo
a
ric
a Wh
Million linear meters
11.3
47.0
31.7
29.6
71.2
.
22.2
,
.
213.0
5,
0
242
31
88
.
ere a figure is not given, output is either negligible or zero.
b. Including refined.benzol.
C. Including bitumen.
d. 100 percent acid base.
e. As nitrogen.
f. Copper content.
Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
S-E-C-R-E-T
Table 52
Geographic Distribution of the Trade Turnover
of the European Satellites a/
1936-38 and 1948-53
Million Current US
Area
11936-38
1948
1949 1950 1951
1952
1953
Bulgaria
240
261
311 261 263
331
394
Non-Sino-Soviet Bloc
208
57
56 29 21
37
55
Sino-Soviet Bloc
32
204
255 232 242
294
339
USSR
94
108 118 153
187
224
China
4
4
Albania
1
2
N.A.
Czechoslovakia
6
27
21 33 38
41
59
East Germany
13
1
6 12 21
21
40
Hungary
2
3
17 20 10
N.A.
N.A.
Poland
6
12
26 24 18
N.A.
27
Rumania
6
4
8 4
N.A.
N.A.
63
69 25 -3
39
-15
Czechoslovakia
692
1,505
1,588 1,417 1,815
1,753
1,866
Non-Sino-Soviet Bloc
572
1,050
866. 642 718
508
411
Sino-Soviet Bloc
120
455
722 775 1,097
1,245
1,455
USSR
11
237
399 416 520
629
684
China
9
1
21 102
126
166
a. For the methodology and general statements on the sources for this
table, see Appendix C. The discrepancies between the figures in this
table and those given for 1953 in other tables are also explained in
Appendix C.
- 125 -
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
S-E-C-R-E-T
Table 52'
Geographic Distribution of the Trade Turnover of the European Satellites
1936-38 and 1.91+8-53
(Continued)
Million Current US
Area 1936-38 191+8 129 1950 1951 1952 1953
Czechoslovakia
Sino-Soviet Bloc
(Continued)
Albania
Bulgaria 5 27
East Germany 28 20
Hungary 14 43
Poland 16 94
Rumania 36 53
World 1,011
Non-Sino-Soviet Bloc 847
Sino-Soviet Bloc 164
USSR 25
China 28
Albania
Bulgaria 13
Czechoslovakia 28
Hungary 23
Poland 20
Rumania 27
N.A. N.A.
21 33 38 41 59
35 72 93 100 119
72 70 137 137
93 146 172 186 219
75 82 78 138
27 -65 172 -52 -67
East German
305 614 971 1,143 1,6oo 2,017
112 255 338 214 397 468
193 359 633 929 1,203 1,549
102 236 348 512 716 915
32 66 113
3 3 4
1 4 8 20 21 40
20 35 72 93 100 119
2 8 33 38 61 76
68 74 166 212 207 228
2 6 19 28 48
- 126 -
1 6
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
S-E-C-R-E-T
Table 52
Geographic Distribution of the Trade Turnover of the,Earopean Satellites
1936-38 and 1948-53
(Continued)
Million Current US $
Area
1936-38 .
194+8
1949
1950
1951
125;2
1953
H
ry
World
289
330
564
64o
782
875
967
Non-Sino-Soviet Bloc
234
218
302
247
256
252
222
Sino-Soviet Bloc
-55
112
262
393
526
623
745
USSR
59
100
147
227
254
319
China
16
40
Albania
N.A.
N.A.
Bulgaria
2
3
17
20
10
N.A.
N.A.
Czechoslovakia
12
42
72
70
137
137
East Germany
23
1
8
33
38
61
76
Poland
3
9
14
52
59
N.A.
33
Rumania
15
7
26
30
N.A.
N.A.
Errors and. omissions
-9
27
41
192
155
140
World
438
1,055
1,258
1,298
1,686
1,650
1,994
Non-Sino-Soviet Bloc
384
624
714
529
705
544
598
Sino-Soviet Bloc
54
431
544
769
981
1,106
1,396
USSR
5
229
280
346
422
528
594
China
2
8
49
50
59
Albania
3
3
4
N.A.
6
Bulgaria
5
13
24
24
17
N.A.
27
Czechoslovakia
17
96
93
146
172
186
219
East Germany
20
68
74
165
224
207
228
Hungary
3
8
14
52
59
N.A.
33
Rumania
3
11
25
25
23
N.A.
40
Errors and omissions
-1
6
31
11
135
190
- 127
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Table 52
Geographic Distribution of the Trade Turnover of the European-Satellites
1936-38 and :L918-53
(Continued)
Million
Current
US $
Area
1936-38
119+8
19+9
1950
1951
1952
1953
World
309
220
1+01
469
523
509
587
Non-Sino-Soviet Bloc
230
64
72
80
111
78
94
Sino-Soviet Bloc
79
156
329
389
412
431
493
USSR
50
188
280
280
295
320
China
N.A.
N.A.
Albania
N.A.
N.A.
Bulgaria
1
1+
8
4.
4
N.A.
N.A.
Czechoslovakia
33
53
75
82
78
138
East Germany
27
2
6
20
28
118
Hungary
11+
6
20
30
N.A.
N.A.
Poland
4
11
25
25
23
N.A.
40
Errors and omissions
32
11
-38
85
30
-53
- 128 -
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S-E-C-R-E-T
Trade of the European Satellites with the Non-Bloc Countries a/*
1948 and 1952-54
1948
1952
1953
122L1
1948
1952
1953
1954 1
Bulgaria
US and Canada
2,429
26
8
13
3,040
278
358
311
Western Europe
15,455
13,901
25,379
19,735
17,726
15,410
24,810
27,052
Near East and Africa
16
1,751
2,119
907
2,801
1,618
3,591
1,919
Far East
214
217
1,006
128
N.A.
6
163
20
Oceania
12
6
238
1
3
5
Latin America
22
7
5
59
25
1
2
2
Czechoslovakia
US and Canada
36,070
450
165
1,311
27,988
5,116
4,898
4,916
Western Europe
300,182
110,872
82,546
117,80+
322,745
157,096
142,790
142,785
Near East and Africa
22,354
24,479
13,222
21,770
34,157
39,428
28,984
37,240
Far East
17,377
18,720
15,940
12,912
15,518
13,186
10,712
15,622
Oceania
Latin America
26,578
East Germany
US and Canada
N.A.
662
1,079
599
N.A.
7,621
7,438
4,539
Western Europe
12,170
112,889
153,803
246,868
33,667
109,027
152,646
217,942
Near East and Africa
N.A.
721
3,114
2,187
N.A.
1,264
199
4,575
Far East
N.A.
91
425
2,518
N.A.
1,806
6,108
6,382
Oceania
N.A.
2
152
394
N.A.
871
1,286
1,867
Latin America
N.A.
181
N.A.
Total
12,170
114,325
158,573
252,747
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Trade of the European Satellites with the Non-Bloc Countries a/
1948 and 1952-54
(Continued)
1948
1952
1953
1 4 b
19448
1952
1953 1224 !
R-gary
8
.
2 1
0
US and Canada
734
1'
152
57
2,512
1 725
3,19
.
1,90
,55
Western Europe
Near East and Africa
81,304
5,082
66,865
8,257
78,596
59g
9,448
96,913
6
91
7,901
81,725
6,
6
61 9
,
6,936
,93
64
,308
1,902
9,343 10,420
Far East
1,432
1,815
933
2,986
,
66
3,192
3 732 3
,662
Oceania
72
983
70
307
1,121
507 736
Latin America
906
4,295
2,462
12,260
461
6,266
3,723 9,177
Total
98,530
81,384
92,473
122,642
93,148
82,216
64,743 89,853
Poland
US and Canada
67,454
357
809
2,164
67,454
10,816
14,543 21,988
Western Europe
218,391
174,820
155,105
168,297
218,391
257,712
235,127 198,958
Near East and Africa
7,810
12,051
9,554
12,141
7,810
8,191
10,095 13,415
Far East
14,847
32,918
12,060
12,844
14,847
2,738
2,844 2,260
Oceania
5,049
13,890
25,384
22,337
5,049
953
95 211
Latin America
28,198
3,954
10,158
30,853
28,198
6,528
6,868 25,218
Total
341,7 49
237,990
213,070
2.j636
343,11
286,938
Rumania
US and Canada
8,780
46
104
1
8,780
696
379 385
Western Europe
22,087
47,861
58,286
48,696
22,087
26,308
48,618 70,610
Near East and Africa
1,073
1,781
1,839
8,406
1,073
5,948
12,258 9,347
Far East
1,277
1,731
54
373
1,277
8 537
Oceania
6
36
665
6
12
3 3
Latin America
17,455
860
2,125
8,709
17,455
1,511
2,686 6,683
Total
50 6 8
52,315
63,073
66,326
44,532
34,475
63,952 87,565
a. Excludes Albania. Figures showing total Satellite trade with non-Bloc countries in 1953
are presented in Table 47. For the methodology and general statements on the sources for this
table, see Appendix C. The discrepancies between the figures in this table and those given for
1953 in other tables are also explained in Appendix C.
b. Data for 1954 are estimates effective as of 11 July 1955 and are subject to revision.
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S-E-C-R-E-T
Table 54
Commodity Composition of Imports of the European Satellites
from Non-Bloc Countries /*
1953
Importing Country
Bulgaria
Thousand Percent
US of Total
Crude materials
6,723
24
Chemicals
4,053
14
Manufactured goods
9,250
32
Machinery and transportation equipment
4,385
15
Other
4,163
15
28,574
100
Foodstuffs
24,598
18
Crude materials
55,129
41
Chemicals
9,254
7
Manufactured goods
15,382
11
Machinery and transportation equipment
16,466
12
Other
14,778
11
135,607
100
East Germany
Foodstuffs
50,238
32
Crude materials
20,188
13
Chemicals
19,139
12
Manufactured goods
39,021
24
Other
30,840
19
Footnotes for Table 54 follow on p. 133.
159,426 100
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Table 54
Commodity Composition of Imports of the European Satellites
from Non-Bloc Countries a*
1953
(Continued)
Importing Country
Hungary
Thousand Percent
US of Total
Foodstuffs
7,197
9
Crude materials
31,449
38
Manufactured goods
17,527
22
Machinery and transportation equipment
10,566
13
Other
14,745
18
81,484
100
Foodstuffs
11,410
5
Chemicals
12,997
6
Crude materials
77,866
38
Manufactured goods
40,897
20
Machinery and transportation equipment
50,827
24
Other
15,533
7
209,530
100
Crude materials
11,89C
19
Manufactured goods
28)656
45
Machinery and transportation equipment
15,461
25
Other
6,964
11
62,971
100
Footnotes for Table 54 follow on p. 133.
-132-
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Table 54+
Commodity Composition of Imports of the European Satellites
from Non-Bloc Countries a/
1953
(Continued)
Importing Country
European Satellites jJ
Thousand Percent
US . of Total
Foodstuffs
Crude materials
Chemicals
93,443
203,2+5
45,41+3
14
30
7
Manufactured goods
150,773
22
Machinery and transportation equipment
97,705
14
Other
86,983
13
677,592
100
a. For the methodology and general statements on the sources
for this table, see Appendix C. The discrepancies between the
figures in this table and those given for 1953 in other tables
are also explained in Appendix C.
b. Excluding Albania.
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S-E-C-R-E-T
Table 55
Commodity Composition of Exports of the European Satellites
to Non-Bloc Countries a/*
1953
Exporting Country
Bulgaria
Thousand Percent
US of Total
Foodstuffs
18,909
65
Crude materials
3,723
13
Manufactured goods
3,249
11
Other
3,158
11
29,039
100
Foodstuffs
32,982
16
Minerals, lubricants,-and related products
11,804
6
Crude materials
28,274
14
Manufactured goods
53,732
26
Machinery and transportation equipment
29,287
14
Other
48,585
24
204,664 100
Crude materials
16,099
10
Minerals, fuels, lubricants, and related
products
35,605
21
Chemicals
32,895
20
Machinery and transportation equipment
24,326
14
Manufactured goods
18,181
11
Other
40,524
24
Total
167,630
100
* Footnotes for Table-55 follow on p. 136.
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S-E-C-R-E-T
Table 55
Commodity Composition of Exports of the European Satellites
to Non-Bloc Countries W*
1953
(Continued)
Exporting Country
Hungary
Thousand Percent
US of Total
Foodstuffs
15,473
23
Fats and oils
3,177
5
Manufactured goods
17,661
27
Machinery and transportation equipment
8,217
12
Other
21,814
33
66,342
100
Foodstuffs
106,887
4o
Crude materials
19,874
7
Minerals, fuels, lubricants, and related
products
119,182
44
Manufactured goods
14,643
5
Other
10,071
4
270,657
100
Foodstuffs
20,612
32
Crude materials
8,829
14
Minerals, fuels, and related products
28,414
43
Other
6,829
11
64,684
100
* Footnotes for Table 55 follow on p. 136.
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S-E-C-R-E-T
Table 55
Commodity Composition of Exports of the European Satellites
to Non-Bloc Countries of
195:3
(Continued)
Exporting Cqjjptr,
European Satellites
Thousand Percent
us $ of Total
Foodstuffs
194,863
24
Minerals, fuels, lubricants, and related
products
195,005
24
Crude materials
76,799
10
Manufactured goods
107,466
13
Chemicals
32,895
4
Machinery and transportation equipment
61,830
8
Fats and oils
981
130
16
Other
,
803,016
a. For the methodology and general statements on the sources for
this table, see Appendix C. The discrepancies between the figures
in this table and those given for 1953 in other tables are also ex-
plained in Appendix C.
b. Excludes Albania.
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 Approved For Release 1999/09/26 : CIA-RDP79-01093A001100030001-3
S-E-C-R-E-T
APPENDIX B
ILLUSTRATIONS
Figures 10 - 19
European Satellites: Percentage Distribution of Output
of Selected Products, 195+ (Maps)
Figure 20
European Satellites: Geographical Distribution of Trade 'turnover,
1936-38 Average and 19+8-53 (Chart)
- 137 -
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SECRET
FLUFRAL
REP i UBLIC OF
GERMANY
4LIECHT. ?
swrrz. .. J:. S
Halle
26.7X
Borna
22.6%
Senftenbergt
\ 20.9%
North -
Bohemia
20.31
3.7%
8
2.35
Scattere Locations
3.45
Hard coal
(anthracite and
bituminous)
Brown coal
ED (lignite)
I ~.
STRIA
The sizes of the circles are proportional to the percentage of the
total European Satellite output of each commodity produced at the
given site or area.
Aggregate
7.5% ,
POLAND
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Coal
1954
SECRET
o.z }
Aggr gate ~.
ALB4kNIA
M A NJ A
S. S. R.
Figure 10
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URKEY
 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
EAST
7 Vrn%1vLL-tj' I '
r
- /
1 16%
// 2eitz-
! Dresden-
resden
Leipzig-Mersa rg
11
Zeitz-Dresdeno1
5 Merseburg?
/I -Leipzig
SECRET
Figure 11
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Crude Oil
and
*Refined Petroleum
1954
100 200
c
~..,.,~DIStriet y 77% 1 63%
C Z E IC H.
`,?Melacky l _
` 2S I.J
!8ratislava
.. i ~.._- ioBudan st-KomSrom
Crude oil
^ 'Refined petroleum
0
A A L T I C
SEA.I
1% `-..`
Zilina-Nodonin- ?2dina
'Vala Fields
'includes synthetic petroleum
The enure output of synthetic petroleum is produced in East
Germany, the Most area in Czechoslovakia, and at Odertal and
04wiecim in N.A.
The heights of the graphs are proportional to the percentage of
the total European Satellite output of each commodity produced
at the given site or area. The given percent is rounded to the
nearest full percent.
13814 8.55
SECRET
u I
A Bac Area U M
N
%
Orqul Stalin-
l
1 '
'
P
oe
_
I
Orepul Stalin -` l-%~?Buzlu
Mi,"
106 200
Kilometers
SECRET
TURKEY
ttaundones we not nCCesmdty 4
rec
oynized by the U.S Garerrvm
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
SECRET
GERMANY
20
5 B A I TIC SEA
Berlin
gr
/ /
Brande g Berlin-NiEder choneweide
tl~etpuiL 3z ez `
?rz t
~Bitterfeld Riesa 1
tered Locations
Klad
\._ HUNGARY X05
0 Copper
VA Lead
Zinc
Aluminum
Steel
The heights of the graphs are proportional to the percentage of
the total European satellite output of each cornmudily produced
at the given site or area. The given percent is rounded to the
nearest full percent.
Liegnilz
Strzybnica-
Rozdzieli- 8`izozowice Stalinagla'd
SECRET
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Steel and Selected
Nonferrous Metals
1954
100 200
22
Orapl Stalin
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
EAST
Isen
Eisenach
/ t
"""" . Hai.Otoherl-Werdau-
Ickyu?'~emnitz-Zschopau
~`S:i
FEDERAL
P
RE
UBLIC OF
Prague
lIE
yy
CHT.
i e
45TAL
Buda
H U N G A R
I Automobiles
The heights of the graphs are proportional to the percentage of
the total European Satellite output of each commodity produced
at the given site or area. The given percent is rounded to the
nearest full percent.
Brno
^??.-ZECHO
`ALB NIA
GREECE
SECRET
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Automobiles, Trucks,
and
Tractors
1954
0 00 zoo
Mlle
0 ]00 200
Kil~iiirters
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
SECRET
SECRET
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~~ yx % cI
*Grunberg
'lot a Ammen'O'f ,e''~' i
,,CC ,~iesky
AmmeregorfGot Waimar"Dessau
?Waimar Bautzen-G litzlGor1ltz
1- Botha
19% Njesk
F t 1;x AI.,
RE'PIrg7 ii ~r
GERMANY
:aLiECNT, -
I
Strals
izenburg
EAST
GERMANY
l8randen rg Berlin
Pra jr, Sz 5%--l
gue x
,Plzen OPraguipa Stud e nka
8%
CZE-CH.
\. Brno.
AiJSTIR
HUNGARY
T12TESTE
. r~ I
Locomotives
Freight cars
Passenger cars
Shipbuilding (including barges)
The heights of the graphs and the sizes of the circles are propor-
tional to the percentage of the total European Satellite output of
each commodity produced at the given site or area. The given
percent is rounded to the nearest full percent.
l
I I Poznan
20%
p 1
Gdansk
lox
Studenka-Koplivnice
Komarno . J R
/
Kopiivmc: L~ _ l
tLBANIA)
5%
am
arnd. p-i .
`fir GREECE
4.3
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Railroad Equipment
and
Shipbuilding
1954
M !es
0 100 200
K ilometers
RUMNIA
SECRET
3%
Orapl-Stalin
4%
j

ssz
GERMANY I l
5sx~ ~~ ~ sX
e
Aream \
\I
PA, P61,0
S 3 1-1-.11 1
.Wittenberg
M W, 740 M-22 *Om ' j
Magdeburg. fenberg-Leipzig Area 3%
ALBSNIA }
Figure 17
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Selected Chemicals
,"qn.+.d br
'2
40
t3RKEY
not .cettonly those I
echo U.S.
Soremment.
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
Jena
4.5%
x/) V 1.4%
f OBunzlau
6xRete ice ~?'~
OI2kovice o0gue hosudov
vae 1. l
0.7% o _."`~P
Wejherowo-Gdansk
Oppeln
6.8%
Ostrava
Yrako ce
zz o.ax
~ . Brno
ci
gdzin
Isnowiec-
alinogrbd
z 7%) r.sx GoJe bw
0 otwaldov 1.JJ
I
;en
n (Lx C Z
IE C H l
tosx J ^'....~
The sizes of the circles are proportional to,the percentage of the
total European Satellite output of cement produced at the given
site or area.
Berlin
5.5%
Fdrstenberg
Halle-Leipzig
YUGOS
SECRET
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Cement
1954
Ora;ul Stalin O
Tar ovis - Braila-Gal al --
e_ - .
B_
0.
Pleven5x 0
BU GARIA
Sofia
,4.zx
TV V,KEY
~^y so9n~gd 6yetro
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
SECRET
I'Suhl
[ -~
pD } ra-gue
? 20%
tERAL
REPUBLIC op k.. \
Strakonice
\.
GERMANY :~
1, HT.
swiTZ
~\ Small arms
K15 Mortars
Artillery
Tank guns
Tanks
Military aircraft
0%
IVA
1
.50%
E CH'\ `//J
? .f > Laband .
%
15%
/
PovaIsk3 Bystrica
BrnD 2%
Dubnica nad VSoly`
;?-.i '-.._..~ ko"
~ iDX
(c B dapest ~.
\H UNGARY
The heights of the graphs ere proportional to the percentage of
the total European Satellite output of each commodity produced
at the given site or area. The given percent is rounded to the
nearest full percent,
SECRET
Figure 19
EUROPEAN SATELLITES
Percentage Distribution
of Output of
Selected Military
End Items
1954
too goo
nl
100 200
Kilometers
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 Approved For Release 1999/09/26 : CIA-RDP79-01093AO01100030001-3
OJ~~
o~'~`P~t~O~o d 14
~~~ `w ode
V O~a~ elt fk, ~SSd
Q~`19 b~3 ~ S??
5IV I
Siac~?6i o ea~,~i'e ~ a& e~?~tR~ iae.e'~na~i" .~ V9~,',~e aai cis ti~ies? 00'6` of
ifc i?n~ cc? its .?e Y,ea uri ~ en in
r
.
`
e ~
~
O
0
,
i
i
yeti
0?a c? dii
'
?ri
is " is " n~ e'S' ioi ? a Q? i? f ti 0e ? i0i
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APPENDIX C
METHODOLOGY
1. Com utation of Gross National Product and Sector Indexes
(Sections III and V).
The method employed in computing the GNP figures and the indexes
of the various sectors is the same as that used in previous reports
and described in CIA/RR PR-111, Construction of European Satellite
Gross National Product Accounts, 15 April 1955, S/NOFORN, with the
following major exceptions:
a. Use of 1953 as the Base Year.
For the purposes of the present report it was decided that
indexes with 1953 = 100 would lead to greater ease of comprehension.
Consequently, the indexes were constructed using 1953 as the base year.
b. Inclusion of Additional Items for East Germany.
In view of the importance of potash and uranium mining in
the East German economy, it was thought that the industrial sector
index would be more accurate if these items were included in the esti-
mates. Therefore, value-added weights for these two mineral industries,
derived by using wage-bill figures, were added to the value-added weights
of the energy and mining subsector of the industrial sector. The effect
of this adjustment has been to raise the industrial sector index, especial-
ly for the period since 1950, when the mining of uranium was first under-
taken, relative to the sector index shown in CIA/RR PR-99, Economic Con-
ditions in the European Satellites, 11 February 1955, p. 1i1, SUS ONLY
and to raise the absolute value of the East German GNP relative to the
GNP's of the other Satellites.
c. Use of Officially Announced Industrial Increases for 1954.
Officially announced rates of increase in gross industrial
production were used in deriving the 195+ index number for the indus-
trial sector of each of the European Satellites. Furthermore, in Hungary
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the official announcements of the change in the amount of construction
activity for 195+ were also employed. Since indexes of industrial pro-
duction are a basic element in constructing the GNP estimates, the indexes
of Satellite GNP's for 195+ and also the absolute values of the GNP's and
the component sectors in that year are partially based upon official
Satellite figures.
2. Notes on the International Trade Statistics (Section VIII).
The data presented in Section VIII show several rather serious
deficiencies. Trade values compiled from Communist sources have been
converted to current dollars at official exchange rates. In view of
Communist exchange -control-s and methods of pricing goods on the inter-
national market, such a simple conversion can only be considered as
being very tenuous. Nevertheless, it was thought that dollar figures
would be of more value to the reader, and, therefore, the tenuous con-
version was made. Furthermore, it should be remembered that the values
are given in current dollars. Because of this, comparisons over long
periods of time are not too meaningful unless deflated by a price index
of goods entering into foreign trade. Such a deflator is not available.
The degree to which clandestine trade is included in the estimates
is to some extent indeterminate. Insofar-as the figures are derived
from Western data, covert trade is excluded. It has been impossible
-for the most part to discern the extent to which Communist sources
include a coverage of covert trade or, for that matter, whether such
trade is included in their reports at all.
Most of the tables in Section VIII are based on the detailed trade
statistics presented in Appendix A, Tables 52-55. The handling of the
statistics and their sources are as follows:
a. Appendix A, Table 52.
With the exception of East Germany, figures for 1936-38
are from the Foreign Commerce Yearbook for 1939. For the purposes of
this report, however, Soviet figures have been increased so as to in-
clude the trade of Estonia, Latvia, and-Lithuania. The prewar figures
for East Germany-are derived from trade statistics for Germany as -a
whole for 1936-38, using information in Table 1, p. 26 of UN, ECE,
Economic Bulletin for Europe, vol. 1, no. 3, third quarter 1949. This
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table indicates that in 1936, 26 percent of imports and 21 percent of
exports of the whole of Germany were destined for or originated in the
areas now included in East Germany and the Soviet Sector of Berlin.
These percentages were applied to German trade statistics for 1937 and
1938 as well, to obtain values for East Germany.
Again excepting East Germany, the postwar data in Appendix
A, Table 2, are based predominantly upon Communist statistics. In
general, the amount of trade with the non-Sino-Soviet Bloc has been
computed as the difference between reported figures for intra-Sino-
Soviet Bloc and total trade. Reported figures on trade between indi-
vidual countries do not add up to the independently reported intra-
Sino-Soviet Bloc totals In some instances, leaving the unclassifiable
residuals shown in the table. To some extent these residuals are the
result of gaps in information. They are also partly the result of
statistical discrepancies involved when two countries have reported
on the same flow of trade. Insofar as possible, all figures for trade
between each pair of countries have been reconciled to eliminate any
dissimilarity in the data reported.
Intra-Bloc trade turnover figures for East Germany in the
postwar period were based upon official sources. In instances where
official data were not available, mainly for East-West trade, US Depart-
ment of Commerce compilations were relied upon. Unlike the derivation
used in the other Satellites, total trade turnover for East Germany is
the sum of Sino-Soviet Bloc and non-Sino-Soviet Bloc trade.
b. Appendix A, Table 53.
These statistics were compiled from a table prepared by
the International Economic Analysis Division, Office of International
Trade, US Department of Commerce. This is the most complete tabulation
available on the geographic distribution of Satellite trade with non-
Bloc countries. These data, however, are subject'to a serious limit-
ation: no attempt is made to estimate the volume, composition, or
direction of clandestine trade. Since the data in this table are
from non-Bloc sources and the statistics in Appendix A, Table 52 are
from Bloc sources, discrepancies between the two sets of data are
bound to arise. It has been impossible to reconcile these discrepancies.
Therefore, the figures presented for East-West trade in this table are
not consistent with the figures in Table 52.
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c. Appendix A, Tables 54 and 55.
This material is based upon statistics prepared from offi-
cial Western sources by the International Economic Analysis Division,
Office of International Trade, US Department of Commerce. The same
source was used in the compilation of Appendix A, Table 53, but there
are some discrepancies in the values of imports and exports for 1953
because these tables include information which is more up to date than
that appearing in Table 53.
These data suffer from a further limitation. Not all
countries of the non-Sino-Soviet Bloc :report their trade with the
European Satellites in terms of a commodity breakdown. This has
made it necessary to add the value of their trade with the Satel-
lites to the "other" category in the tables rather than to distribute
it among commodity groups.
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APPENDIX D
GAPS IN INTELLIGENCE
Gaps in intelligence on the subjects covered by this report are
generally the same as those outlined in an earlier publication, CIA/RR
PR-99, Economic Conditions in the European Satellites, 11 February 1955,
S/US ONLY.
The information used in calculating gross national product and its
major components is still seriously deficient. Further improvement in
the accuracy of production estimates is needed, and an expansion of the
number of products used in the computations probably would make the
sample more representative. Suitable indicators of the trend in econo-
mic activity in the trade and services sectors are also needed. Lists
of local prices which can be used to value the estimates of physical
output are not available at present for Poland, Rumania, and Bulgaria.
More accurate and comprehensive data on the distribution of the labor
force are required in order to weight the sector indexes properly and
to estimate changes in labor productivity. Further information is also
needed in order to break down gross national product by end use.
The usefulness of official statistics concerning planned or actual
production and investment is limited by important gaps in the informa-
tion. The coverage of the statistics is frequently spotty, and there
are also difficult problems of comparability of official figures for
various years. In the case of investment data, for example, it is
important to know whether the figures relate to actual or planned invest-
ment; to gross or net investment; and to budgetary, state, or total
investment. Breakdowns of production and investment data by major
economic sectors and within the industrial and agricultural sectors
are essential in appraising trends in national economic policy. There
are many gaps in the published material of this type. Changes in the
coverage of budget categories and lack of information for a given
category have also handicapped analysis of Satellite economic plans
and policies.
Available data on various aspects of consumer welfare in the Satel-
lites are sufficient to indicate general trends but do not in most cases
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permit quantification of changes in living standards. Such analysis is
dependent on more adequate information concerning trends in wages, the
cost of living, and the availability and quality of consumer goods. The
relationship between production and consumption of different types of
consumer goods is uncertain because of deficiencies in the foreign trade
statistics. Other deficiencies and gaps in the foreign trade data are
outlined in Appendix C, above.
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APPENDIX E
SOURCE REFERENCES
In general, sources are not given for the ORR estimates in this
report. Consequently, only Section I, which is based largely on offi-
cial Satellite sources, is documented in detail. Sources for the data
in the other sections of the report are available in ORR files.
Evaluations, following the classification entry and designated
"Eval.," have the following significance:
Source of Information
Information
Doc. - Documentary
1
- Confirmed by other sources
A - Completely reliable
2
- Probably true
B - Usually reliable
3
- Possibly true
C - Fairly reliable
4
- Doubtful
D - Not usually reliable
5
- Probably false
E - Not reliable
F - Cannot be judged
6
- Cannot be judged
"Documentary" refers to original documents of foreign governments
and organizations; copies or translations of such documents by a staff
officer; or information extracted from such documents by a staff of-
ficer, all of which may carry the field evaluation "Documentary."
Evaluations not otherwise designated are those appearing on the
cited document; those designated "RR" are by the author of this report.
No "RR" evaluation is given when the author agrees with the evaluation
on the cited document.
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STATSPEC
25X1A
50.
STATSPEC
44. CIA. "Comment on Possible Alteration in East German Plans,"
STATSPEC Current Intelligence Digest, 12 Jan 55. S.
45.
25X1 A 46.
47.
48.
STATSPEC 49. Hungarian News and Information Service. Hungarian Production
25X1 C
STATSPEC
31. Die Wirtschaft, 24 Feb 55, p. 8. U. Eval. RR 2.
32- Neues Deutschland, 22 May 55, p. 3-4. U. Eval. RR 2.
33. Gesetzblatt der Deutschen Demokratischen Re ublik, no 42,
38.
1955, p. 354. U. Eval. RR 2.
34. Ibid., no 79, 1952, p. 483. U. Eval. RR 2.
35. Ibid., no 109, 1953, p. 1047. U. Eval. RR 2.
36. Ibid., no 23, 1954, p. 205. U. Eval. RR 2.
37. Ibid., Teil I, no 42, 1955, p. 345. U. Eval. RR 2.
39. Gesetzblatt der Deutschen Demokratischen Republik, no 102,
1954, p. 947- U-
40. Neues Deutschland, 2 Feb 55, p. 3. U.
41. Gesetzblatt der Deutschen Demokratischen Republik, no 22,
1953, p. 313. U. Eval. RR 2.
42. Deutsche Finanzwirtschaft, no 20-24, 1954, U. Eval. RR 2.
Ibid., no 1, 1955. U. Eval. RR 2.
43.
52.
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54. The Five-Year Plan of the Hungarian People's Republic, Budapest,
1950. U. Eval. RR 2.
Plani razvit a narodnogo khozyaystva stran narodnoy demokratii
(Plan for: the Development of the National Economy of the
People's Democracies), Moscow, nd. U. Eval. RR 2.
Or,V1 n 55. UN, ECE. Economic Bulletin for Europe, vol 7, no 1, May 55,
56.
57. Ibid.
58. Ibid.
59. Ibid.
STATSPEC6o. r
25X1A
Ibid., 20 Apr 55, p. II 1-10. OFF USE. Eval. RR 2.
61. Ibid.
62.
Ibid., 26 Apr 55,p. II 1. OFF USE. Eval. RR 2.
63. Ibid.
25X1 C199 64. Ibid.
65. ~
STATSPEC66.
67. NIS 14, Poland, sec 61, p. 61-1 and 61-13. C. Eval. RR 2.
68. CIA. CIA/RR PR-99, Economic Conditions in the European Satel-
lites, 11 Feb 55, p.. 68 . S/US ONLY.
69. CIA. FDD, Summary, no 85, 11 Mar 53. C. Eval. RR 2.
70. CIA. CIA/RR PR-99, Economic Conditions in the European Satel-
lites, 11 Feb 55, p. 32. S/US ONLY.
71. UN, ECE. Economic Bulletin for Europe, vol 6, no 1, May 54,
STATSPEC p ? 19. U. Eval. RR 2.
72. Ibid.
73.
25X1A
74. Ibid., 27 Apr 54. OFF USE. Eval. RR 2.
76. UN, ECE. Economic Bulletin for Europe, vol 6, no 1, May 54,
p. 19. U. Eval. RR 2.
75.
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152.
STATSPEC-153 ?
154.
STATSPEC
155.
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
168.
169.
170.
171.
172.
173.
174.
National Committee for a Free Europe, Inc., Mid-European Studies
Center. The Hungarian Oil Indus, New York, 1954, p.-64-76.
U. Eval. RR 3.
CIA. ORR Project 25.24 (DWP), Petroleum in the Soviet Bloc -- a
Summary, 7 Oct 53, Fig 2a. TS. (information unclassified
Petroleum, Jan 55, vol 18, no 1. P. 3. U. Eval. B-s.
STATSPEC For Re
Reeves, Frank. Petroleum Resources in Albania, Dec 52. U.
Eval. RR 3. (prepared for Petroleum Administration for Defense
CIA/RR PR-111, Construction of European Satellite Gross
National Product Accounts, 15 Apr 55. S NOFORN.
Ibid., p. 3.
FOA, Office of Research, Statistics, and Reports. Regional
Data Book -- Europe, 1 Sep 55, p. B-2. S.
Ibid.
Ibid.
CIA. CIA/RR PR-117., Construction. of European Satellite Gross
National Product Accounts, 15 Apr 55, p. 11. S/NOFORN.
CIA. CIA RR PR-9 , Development and Potential of the Textile
Indust in the Soviet Bloc, 5 Feb 55,_p? 6. SUS ONLY.
Ibid., p. 3'(. SOUS ONLY.
UN, ECE. Economic Survey of Europe in 1954, 1955, P. 55. U.
Ibid., p. 110-12. U.
A. CIA/RR IP-385, Soviet-Capabilities and Probable Soviet
Courses of Action, 1954-60, 7 Ma:r 55. S.
UN, Secretariat. Statistical Yearbook, 1954, 1954, p. 359-62. U.
FOA, Office of Research, Statistics, and Reports. Regional Data
Book -- Europe, 1 Jun-55, p. B-1. S.
Commerce, Office of Business Statistics. Supplement to theSurvey
of Current Business, National Income, 1954 Edition, p. 163. U.
UN, ECE. Growth and Stagnation in the European Economy, 1954,
p. 178-179, 182-183. U.
The Economist Intelligence Unit. quarterly Economic Review of
Eastern Europe, annual supplement, Mar 55, p. 11. U.
New York` Times, 6. Jun 55. U.
UN, ECE. Economic Survey of Europe in 1954, 1955,-p. 112. U.
Economic Intelligence Committee. ETC-SR-3, Institutions and
Arr, ements in International Trade and Finance within the
Soviet Bloc, 30 Jun 55. S NOFORN.
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