(SANITIZED) ECONOMIC PLANNING IN POLAND

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00246A048200230001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 22, 2016
• Document Release Date: September 16, 2010
• Sequence Number: 1
• Publication Date: May 4, 1959
• Content Type: REPORT

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CENTRAL INTELLIGENCE AGENCY
This material contains information affecting the National Defense of the United Si ates within the meaning of the Espionage Laws, Title
18, U.S.C. Secs. 793 and 794, the transmission or revelation of which in any manner to an unauthorized person is prohibited by law.
REPORT
DATE DISTR. 4 MAY 1959
NO. PAGES 1
REFERENCES RD
DATE OF
INFO.
PLACE &
DATE ACQ.
Economic Planning in Poland
SOURCE EVALUATIONS ARE DEFINITIVE. APPRAISAL OF CONTENT IS TENTATIVE,
a report
on economic planning
A
50X1-HUM
ENCLOSURE ATTACHD
Fit p (%r.'. RCU S E
STATE Y ARMY X NAVY Y AIR X Val AEC
'(Nets: Washington distribution indicated by "X"; Field distribution by "#".)
50X1-HUM
VV
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The problem of proportions between accumulation and consumption 50X1-HUM
The process of investing which was not based upon any rational economic
basis created the need of cont-inuously neater financial and material
means at the expense of the consumption of the whole population! Therefore
the 'rowt h of accumulation and the relative fall. of consummption halted
only in 1954, the first year after the th'sth of Stalin!
The part of xwxx*=Wtixww accur>ul ati nn anO net investments in the
National Income of Poland (evaluated in wholesale prices of 1956)
i1949 i1951) 11951 i1972 i1953 i 1954 1 1955 i1956 i1957 1 1958
Accumulation% 15,6 20,7 2o,3 22,8 27,9 23,2 22,2 20,2 19,3 21,0
Net investments 11,4 13,4 13,8 15,5 16,7 16,1 15,4 14,6 14,6 15,5
%
1959 1960 1956-60 1961-65 1961-75
Accumulation% 22,7 23,4
Net investments 16,4 16,7 18,8 20,0 19,3
%
A At the same time the high proportion of nr'euactive investments (the
data above concern productive investments only) had limited profoundly
the possibilities in investments in the non-productive spheres such as
social. investments, dwellings, so-called cultural investments and others
which in its turn created contradictixonss between porductive and non-pro-
c?active investments!
The last barrier of tt~is ntocess was represented in due time $1956) by
the man alive itself and the discontent of the society, manife*ked openly,
created the growth of consumption at the expense of accumulation.
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This reasonkng might have an extreme bearing in forej}ud!ment of the
future contentment or discontentment? brewing or tranquillity of the
Poland society, of the population as a whole ! The problem will be treated
elsewhere, on the hard-fact basis of the short-and long run plan
forecasts (some of the datas mentioned above).
Moreover this being not a problem of internal situation, but more broadly-
problem of the relations Russia-Poland. As this represents the question
of current tarrets and long-run tarsrets reflected in the relation
accumulation/consumption, the questions whAchh cannot be solved
simultaneously. Gomulka during the filsagt years represented the current
of thought leading to ad u.usti'ents of the sitiiatton at the expense
of diminishing of accumulation. The Russian point of view (except the
short time of Malenkov's power) was the contrary!
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Wke problem of the fault y plan-ing
This problem is reflected in almost a'l of these separate noted
F1,nwe er the majortiy of question treated elsewhere has the more
organizational or calculus' meaning. This note would bear conceptual
meaning and the "voluntary" basis of planning will be treated.The basis Aii'r
which comported total abstraction not only from economic datas and
from people but form the forces of natnnre as well. Therefore the targets
of plans could not be fulfilled for the purely objective reasonsl
As examples can be cited here:
_ Agriculture. In the Six- ear elan the growth of a-ricuultural production
was indicated as 50% for the period without any poss$bil.it,y of
extensive growth, i.e. including the virg in lands into areable lands
(as has been done in Russia). Therefore the real growth attaine only
20%, and the calculus of the sneci;ilists which followed afterwards has
shown that theoretically the highest rrowt h attainable could be
not more than 30%
- The extractin industry; The
fwtit target posed exceeded the real
fulifiilment about twice. This was the reason of disproportions
between manulacturinf and raw material basis mentioned elsewhere.
fuels
targets of
Six_year plan
for 1955
Real production
in 1955
Fulfillment of
Six ,year plan
targets
Coal (million tons)
100,0
94,5
94,5
Oil (thousand tons)
480,0
179,8
45,6
Iron ore (million tons)
3,0
1+- 5
61,9
Copper ore (million tons)
3,25
1 0
Phosphoric fertilizers
in terms of pure ingredients
'
31,0
(thousand tens) 125,0 37,2
29.8
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Electric power
Foreseen power stations with Fulfilled
power of Six year plan targe
i s i n ?,u%
2.600 MW
1.451 "M 56,0
In the light of these dntas the endo and exogenic contradictions
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Problem-of -econo-7-ic-growth -and-irks irtern+l -porportions
-------------------------------------------- ------
.5'
The economic growth is neasiired in the indexes of so-called :1obal
production which in the long run gives the results rather distotted
as
a- the method of global nroduction renresents za a firm-method in which
the inductrial production of the courtrv as a whole is the aggregate
sum of the production of all industrial enterprises. As the interindustrial
cooperation develops in time this method leads toward multiple accounting
of the same production as every enterpriseconsider as its own production
everything which has been sold outside
b- comparability of the global production indexes was undermined by the
irregularity of appliea tion of the :indexes of constant prices, which
had been originally approved ix *nd :included into one single catalogue
b ut with launching of new nroddcts and wid-ning of assortments these
prices had been constantly changed without any control
c- into the global production such nositions among other had beeen
included : the value of industrial services, repairs, semi-finished goods,
tools and implements etc. It seems therefore impossible to evaluate
the absolute mass of economic ,rrowrth, taking moreover into conddderation
that (in the example of Poland in pru ticul.ar, and in the case of other
communist countrie especially in the point 2&3 ) in the discussed period
the following circumstances took place and contributed to the growtn of
global production hndexes :
1. A coriparatively high fulfillment of tar"ets in small industrgxt sector
(handicraft industry, cooperatives etc, small enterprises of below
50 workers in non-basic industries)
2. Introduction of items of big h value in the defence industry sector
3. An imnortant development of cooperation which artificially developed the
volume of production (without real growth) as the result of multiple account,
of the same items!
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The Six-Year Plan (metallurgy of irort,energetic power and some branches
of chemical industry excluding) grog ramm was xx as the whole the
closed-circuit programme, meaning that the basic effects of newly
built ent erppises had t o be shown already in the period of the realization
of the plan itself. However during t. his very period a necessity
of stopping some investnents,mostlv the leabt advanced,was painfully
manifested. Therefore the plan has been transformed into the open
circuit programme and the sonstruction of some branches of industry
was more advanced than others, which were cooperating with these.
The time period of construction of investment objects in some chosen
branches of production ill comparison wit h the same in 'Western Europe
is following
Poland 50X1-HUM
(years of construction)
4 years
Special steel
metallurgical plant
(production 5000 tons/24 hours
(3 shifts) F
13-15 years
Meat products plant
3-4 years
It is worthy to mention that the reasons of this state re rather in the
~~
econou'ic and not technical factors (Poland dseace- the perfect cadre of
engineers-constructors, desiTners and huge, well organited projecting
institutions) The following factors can be here enumerated as
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most important :
dispersion of expenses (insufficient concentration of means)
method of reduction of investment preliminary expenses (cutting
of important sums during construction and versing them to other
investment objetc, more near realization (completion)
binding of investors with detailed and kzxxt bureacratic instructions
and planning
lack of construction and building materials and the low level of xz
or;ranization
Therefore the process of economic growth, based on these facts
(partly as a result of faulty Planning, partly as a result of retardation
in construction)brought unnroportional development of some branches
of production in relation t o others, which reflected itself in
x:wpxrvt apparent economic growt h. The systematization of these dispro-
portions can be done in three goups
a. Disproportion between the development of industry and development of
productions endogenizally conditioning its development
The flagrant example of these disproportions is supplied by the electric
power generation. The rate of growth of the electric power production
which in most countries on the way to indiustria'ization or already
heavily industrialized takes over the rate of growth of the industry
as a whole, in Poland was left f'r hehing the rate of -rowth
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in t his
The average rate of
grpwth of the industry
Rs a whole in t he years
1950-1955
in this:
Electric rower production
Mining4coal)
Iron metallurgy
Metal industry
Building materials
Chemical industry
r'oland 50X1-HUM
Disporoportion between the dr??velownent of industry and the development
of the extracting and raw-material nradw- tion, which condition
exogenously its work
ere the proof lies in the quicker eevelopment ,f the manufacturing than
raw material industries (generally the quicker development is justified
from both economic and technical points of view, but certainly not in such
degree )
1195o 1951.
Rate of growth
in %%
t o the preceding
! 1952 #
1953I1P 4 11955 1
195
0! 1956 1
year
Extracting
+4,4
industry +5,8 .5,9
Xf;
+5,5 +3,9 +3,6
+32
,7 +1,2 -0,5
Manufacturing
industry +34,1 +26,1 +20,6
+18,7 +11,8 +11,4
+2
01,3 +12,1 +9,4
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c.Dispronortion among the internal development of different branches of
industry.
As best example here the machine industry c-n serve. The total development
of machineindustry in the six-year plan was planned to reach 362% in
comparison with the initial basis, and for example the growth of the
electric machines industry, which condition functioning of all machines and
in other countries take over the average growth of machine industry, was
planned as 358%. The lack of xx electrical machines (narallel to other
factors liste before) created a serious obstacle to the full capacity
utilisation of the newly created industries.
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