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December 22, 2016
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August 24, 2011
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June 29, 1954
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Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 LANGUAGE Economic - Party line, theory, fiance, bu et, aEriculture, domestic trade, ~ petroleum, planning Monthly periodical PUBLISHED Bucharest DATE PUBLISHED Dec 1953 SUBJECT HOW PUBLISHED WHERE CLASSIFICATION CONFt~,}? CENTRAL INTELLIGENCE AGENCY FOREI^.N DOCUMENTS OR RAD O BROADCASTS COUNTRY Rumania P,EPORT CD N0. DATE OF INFORMATION 153 DATE DIST. 019 Jun 1954 SUPPLEMENT TO REPORT N0. THIS IS UNEVALUATED INFORMATION) RUi+LWIAN PARTY LINE SHIFT'S ECONOMIC EMPHASIS [Comment: The followtng article in Lupta de Clasa organ of the Rumanian's Party, written-'a ' theoretical St. Arlene, gives reasons for the nex economic J P rty theoretician and discusses certain shifts.] pc.. icY ir. Romanis;, Under the present regime of the Rumanian People's Republic significant Progress has been made in the development of the national econoB>,y on the road to socialism. The volume of industrial production has surpassed the level. Heavy industry, particularly the machine building industry, is coot ally or. the increase. Followin t Prewar Moldavia and the discove ~ E he development of the petroleum basin ininu- of the count ~' f new oil strata in Oltenia and in other regiunes ry, the production of crude oil (titeiu) reached 9.3 million tons, compared to 8.6 million tons produced in 1936. At the end of 1953, the produc- tion of coal had increased 2.4 times over 1938 production; that of steel, 4 times; and that of cement, 4,5 times. Production of eiects?ic enerEy and chemi- cal industries have increased greatly. The production of cotton cloth in 1952 was 90 percent greater than i~ 1938; wool cloth, 110 percent; rayon, 40 percent; shoes, 167 percent; and cotton underwear, 110 ner,;ent. Successes have been obtained in agriculture as a result ^r aid received from the people's democratic state. More than 200 MTS have bean set up. More than 280,OOp i'amilies of peasants have united in about fa,000 collectives and TOL, the majority obtaining significant results in productivity per hectare and in raising their standard of livin3? State farms, with more than 4,100 tractors and agricultural machines, ha~oe achieved large yields of ,-rain per hectare. The amount of goods distributed by state and cooperative stores to workers in 1953 is 50 percent greater than iu 19j0. ;SIR IJIS?RIB UTION FBI -.--~`I I _..~ .ix?' -.:... :. .:: .. ... - .. - .-.. .:'f Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 - 1 - CONFIDI:tamr qT, Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 Private Enterprise During the period of transition from capitalism to socialism there Ere in the Rumanian People's Republic, in addition to socialist formations, sou producers of goods. In agriculture they constitute the large majority and will continue to be the principal producers of agricultural products for a long time. In trade and production, they constitute tha private capitalist formation. In these two sectors, the economic law governing capitalist production and the small-scale production of goods prevails. $ere the law of value is the re ing force. $owever, this role is limited by the existence of the socialist sector and the laws 6ulat- democrstic state. governing it, and by ttie political economy of the pecple's The socialist formation has the directing role in the over-all economy. As a result, the effect of the economic laws governing the private sector is limited by the action of the socialist economic laws. The people's democratic state can check these laws and use them in the interest of building socialism. Peasants with small and medium farms are interested in increased industrial and agricultural production. They are interested in producing more agricultural goods to satisfy the need for industrial rax materials and for food for tl,e urban population, for they in turn benefit from the expansion of industry. The people's democratic state, properly balancing the general interest of the state xith the interests of the private sector, can attract indeuendent producers along the road to socialism. The private capitalist sector, formed for the most_Pgrt of kulaks o the socialist sector. There is an acute struggle between them. The democratic state is carrying out a , PPoses the only correct policy durin +, policy of fencing in the kulaks. Thisliss of the economic law of the pr~vate sectort s~ge and limits the damaging action means limiting the abilit o: Policy of fencing in the kulaks but permitting them to exy the kulaks to exploit and to enrich themselves, goods as pand their production and increase their exchange of provided by law and under the control of state agencies. It is in the interest of the national economy that in the present stage kulaks increase agricultural production, deliver assigned quotas to the state, and bring prod- ucts to the market. Because the state cannot directly plan production 1. the private capitalist sector, it has set up a series of economic levers which permit it to exercise a poxerful re3ulating influence on thi, [sector) as well as on the socialist sector. Economic Balance The development of the socialist formation is taki.,~; place in the Rumanian People's Republic amidst a sharp class struggle, The op?ping of an ever large. field of action for the fundamental economic laws of socialism and of propor- tional planned develo went of the national econo on the part of the capitalist elements and their~oolssandaasentso~uresistance by the imperialists. These persons have recourse to mqn g ' PPorted our forward march. y methods to impede The continued sharpening of political vigilance, thorouga study of the ection of economic laws, and their application in the building of socialism are the chief tasks of party and state cadres. The principal requirement of the laws of planned Proportional development in the national econoaty is the establishment of a proper ratio between .economic branches in conformity with the requirements of the fundamental economic law of socialism. The ratio_axisting between the various branches of the socialist econo~r are not fixed. They can and must change in accordance with the economic Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 conditions and historical objectives in every period. Changes in this ratio cannot be spontaneous, but must be planned by the people`s democratic state. Thus the forward mr.rch of a socialist society leads to expansion of production and to greater fulfillment of the material and cultural needs of the workers. Taking objective necessities into account, the socialist state plans the ratios between capital goods and consumer goods, between the mining industry and the processing industry, between the accumulation, consumption, and re- serve funds, the proportion of labor force to be assigned to various branches of the economy, etc. Of special significance is the establishment of a proper ratio between industry and agriculti?^e, and between mining and processing. A sure supply of raw materials must be set up for heavy industry through the expansion of present sources and the discovery of new ones. To assure the proportional harmonious development of the national economy it is necessary to liquidate the territorial division of productive forces, a remnant of,capitalism. For this purpose the Five-Year Plan provides for the allocation of industries, sources of raw materials, and of consumer centers, and the development of the economies of regi.unes which suffer from the ararchic localization of industry left by the previous regime. Ttie task of building socialism requires the liquidation of the dispropor- tions between economic branches of the national economy and the establishment of new proportions to assure the wealth of Products necessary for the maximum satisfaction of the material and cultural needs of the country. The plenum of the Central Committee, held 19-20 August 1953, revealed that forcing the rate of industrialization and establishing an improper ratio between the accumulation fund and the consumption fund has resulted in an unsatisfactory standard of living among workers in cities and villages, in comparison with the level of the national econoulY. The rate of industrialization was forced by the allocation of too great a fund for heavy industry while not enough was granted to overcome the lag in agriculture, and the consumer goods industry did not receive investments in line with other branches of the economy. Financial ?lapping The plenum fixed the accumulation fund for 1953-1955 as 27.8 percent of the national income and the consumption fund at 72.2 percent. The accumulation fluid will increase annually "in a special manner" during 1953-1955, and will represent a smaller percentage of the national income, because the national income will rise more rapidly than the increase in the accumulation fund. At the same time, the consumption fund will increase each years both in absolute figures and in percent. The rate of increase of the consumption fund will be more rapid than the rate of increase of the national lncome. The plenum established a proper distribution of the accumulation fund between the branches of the national economy. This distributlon takes into account the lag in agricv't.,:ra1 production, in the output of consumer goods, and in the building o" dwellings. It ^=tr~blishes a h..^.mnnirn~s ratio, and pro- vides for the m:forced development of heavy ,.ndustry, without which the develop- ment of the economy and the building of socialism would not be possible. Thus the volume of investments provided for heavy industry ::nd certain large con- struction pro3ects for the period of 1953-1955 were reduced 15 to 17 billion lei. Of this fund, 10 to 12 billion lei remain in the consumption fluid; and about 5 billion lei are designated for the development of agriculture, for. the production of consumer goods, for the construction of dwellings, and other social-cultural work. The level of investments for heavy capital goods and for large-scale constructions of transport [pro,jects] will decrease proportion- ately, those for agriculture and consumer goods industry will double. At the same time, investments for social-cultural work and especially for the building of dwellings will increase. I _ :.: _. b.:,.. Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 Under the peoples democratic regime wide action has been taken to present xorkers and to mobilize new xorkers. Wages are being based on and quality of work. train of traini This system is a powerful stimulant to quantity ng and to increasing labor productivit raising the level more than 2ppe than 1~'~ workers; in 1951, more thany170,0001nand inhools ,~0 workers and masters. 1952 However, ccrta?u imbalances developed in the labor field. to unequal wage scales in various bra scales checked the increase in trainedcworkerstin some brancheso ese were due cree of the Council of ?~'? These wage particularly in those bManchesrs seeks to stimulate the traini A recent de- force. The decree i of industry which are most in needoofwlabors~ and sets u a mproves~?the wage system, stimulates the trainin and labor p graduated wage scale providing for higher B of workers, prod tivity of each worker increases. pay as qualifications Balance Between Indust and A riculture The law of the planned proportional development o: thc~ national economy places greatest emphasis on the establishment of a proper balance between indus- try and agriculture. The plenum of 19-20 August showed that an oped in the republic as a result of the great lag in a This lag has been dete imbalance devel- has been socialized rmined and fixed b Bricultural production. y objective causes. In industry, which ress. In a ' planned development assures proportional griculture, however where the overwhelmin ma and sustained prog- are owned by small and medium independent g ,jority of the farms of production remained behind. Peasants, the development of the forces The fact that the law of planned proportions. devel? socialist part of the rational econo~., and has a in agriculture Pment affects orly the tionate rate of development of industive factor which limited field of action pendent farm exists the Z'Y and agriculture~ndgsilor. the dispropor_ rational or Possibility of introducing hex techni ue, as the inde- tion c ganization of production are very reduced, and a q and of the annot keep pace with socialist industrial 8riculturel techniques on an ever increasing scale. Produc- Agricultureuwillnbehableutossatisfy fully the requirements of industry and of the urban pop,ylatinn onl full socialization and mechanization. y after the However, the socialist transformation of agriculture cannot be nchieved without some effort. It requires the necessary equipment and the free consent of peasants in ,joining collectives. It would, however, be a great mistake to attribute the culture behind industry exclusively *.o the existence of independent ownership, for independent Brest lag of agri- Production. peasants in Rumania today have a potential for greatly increased I.~denendent Peasantry and m a - - uuian In tie present stage of the development of agriculture, when independent farms provide approximately 75 percent of the Brain supply, lar er of raw materials for industry and food for the urban tamed by stimulatin g fluantities of goods between city andsvillage?ingorathihheir Population could be ob- production and the exchange granted stronger supports to the individuals lloandtmediumn~ of A crease production in conformity with the needs of the national econ ugust 1953 combine more strop 1 peasant, to in- g y the interests of the state wtth the interests ~deto Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 farms. Thus, individual small and medium farms will receive granter credits to procure more tools buildin , g materials, selected seeds, and to breed and fatten animals, At the same time, MTS will be directed to Ptve them technical aid. Instead of drawing up plans for individual farms, plans which would not take into account objective economic laws governing independent small producers, the plenum directed its attention toward creating a common interest between the state and the peasantry in increasing production. Attempts in the past to fix plans for individual farms were not successful, for they could not take into account particular conditions on t`~e more than 3 million individual farms. Plans actually caused production to decrease. Individual producers were required to cultivate many crops which would not grow in their areas. The crop distri-. button broughF about lower yields per hectare. Although the state cannot plan agricultural production in the private sector, it can orient and direct thi's production in the interest of building socialism by using a series of economic levers such as the collection of mandatary quotas, contracts, procurements; prices, credits, etc. It is necessary to point out that the proper use of these economic levers, in strict conformity with economic ob~ec- tive law, permits the people's democratic state to exercise n regulatory influ- ence on the prodv^.tion and circulation of goods produced independently, to cause producers of these goode to serve in the national economic interest and in the building of socialism, and to "fence in" tide exploitation potential of the pri- vate capitalist sector. Free trade is necessary to raise considerably the volume of goods which enters into the central state stockpiles. A recent decree of the Council of Ministers organized this type of trade so that it will contribute more and more to the intensification of the exchange between city and village. Up to the pres- ent time [December 1953], the agriciiltura] producer has had to sell specified quantities to cooperatives from a very restricted list of agricultural products, in order to have the rip~t to :,~-y certain industrial products which figured in another list, s?milarly restricted. On the other hand, only the sale of grain and wool gave the producer the right to buy arty kind of industrial product from the same list. For other agri- cultural products such as milk, beans, potatoes, and poultry, he could buy only certain industrial products. He could buy nc lursber at all. When a producer needed lumber, but had no wool or grair. to sell, he was forced to sell milk and vegetables on the free market to bqy grain or xool. Re sold these commodities to a cooperative in order to be eligible to buy lumber. As a result money lost its role as an equivalent general value in this type of trade. This situation made the exchange between city and village difficult and diverted to the free market a number of agricultural products such as potatoes, milk, vegetables, etc., which are extremely important for socialist industry and for the urban food supply. The new system remedies the situatien and strengthens the exchange between city sad village. In the present period, socialist trade cannot azure the variety and quan- tities of food products needed, because the greatest amount of commodities are produced by the private sector. Prices By withdrawing from socialist trade ever larger quLntities of food products obtained from contracts, purchases, mandatory 3elivery quotas, the free market, and from the socialist sector of sgricultui?e, the state can influence prices on the free market, making them higher than those charged for goods sold by the state. This position has not been understood by some agencies of the Ministry I J M. Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 of Domestic Trude and by some of the people's councils. In violation of the directives of the Central Committee and of the d ing for limiti e To establish 8~more proper ratio between industry and agriculture, the plenum of the Central Coaunittee prepared a series of measures to stimulate the development of agriculture, measures which were made concrete in various state and party decrees. Important +ax reductions were granted to individual peasants, collectives, and TOZ (agricult,,-41 cooperatives) on income from young fruit trees, vines, bees, geese, ana .:+tk worms, In addition, taxes were reduced oa income earned b - erived farms, during the first 2 Y collectives establio:ing new stock percent were Years of such farms, Income tax decreases of 20-30 delivered thegentire h~rvest fromwho drew up delivery contracts and then the contract areas to the state. A powerful stimulus to increase per hectare productivity is the decrease in income tax for collectivists and TOZ members who sell products excess of the avera6e per hectare norm for a Given area, produced in The plenum of the Central Committee revealed the existence of between the various branches of agriculture, particu'ar v a animals and animal Podder. It is an imbalance by direct state plannin clear that this imbalance cag in raising peasants. Si because the vast majority of annot be overcome The plenum planned t?o encourage by eve Producers are individual of animals ii, collectives, TOZ, state farms, and independent holdingse r0aising special interest in this regaiYl is a decree, recently voted by the Grand National Assembly, providing for increased animal raising In 19 4- decree sets up a program which will stimulate and su animals so that attar 2- 5 1956. This in the food and raw materialasu a significant ppO~ the raising of Pply improvement will be brought about All these economic measures of the government and the party show that the attraction of small and medium peasants to socialises is not done b but by giving them state aid. The transition co socialism b s peasants is done b Y ruining them, tion Y improving their economic status Y mall and medium and sale of products to the state, and b ~ by increasing their produc- technical level. In such a case the Y raising their organizational and of the advantages of workin peasant is convinced by his own e a result he x111 turn voluntaris soil by machine and by advanced methodser~p9ce sized that one of the most important dutiesiof agriculture. The _ constant or { Pa= t;; and State organs~se~ea existing ones. Ban_zation of new collectives and TOZ, and the consolidation .of To overcome the lag in agriculture the plenum devoted special attention to state farms and hLPS, where the state is able to plan 9irectly the distribution of goods. The plenum discussed the existence of the organization of state farms Produc,;ion ana: errors xhich serious errors in PlsI'ms?haThelpoor organization of malty. state faprevent them from becoming model owered their T?m and their lack of long_rar;e productivity in crops and animal husbAndry, 1"~~y of the mistakes cited are due to insufficient machine force. To overcome these errors the plenum took a series of measures tc aseure more agricultural machine and a 2'Y and labor Properly trained technicians. p rmaueat cadres of workers, functionaries, and Support for IL riculture ng but not liquidatin crees of the state, provid- virtually eliminate private trade, inh bated thedexchange betweentcity and village, and curtailed the supply of food to the xorking population. Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3 The plenum took a series of measures to assure that existing deficiencies in DPfS be overcome. The present lack of spare parts and certain types of machines will be overcome by the assignment of the tractor plant in Stalin to produce other machines in addition to the KD-35 and Belarus, tractors. Speci- fied enterprises will make enough spare parts and drawn machines to establish a better ratio between tractors and tractor equipment. Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190141-3