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Czechoslovakia The Economy
Facets of the Czechoslovak economy
IN THE MID-1980s, Czechoslovakia was one of Eastern Europe's
most
industrialized and prosperous countries. Although levels of
consumption were well below those common in Western Europe,
inhabitants of Czechoslovakia enjoyed a standard of living
generally higher than that found in most other East European
countries. Heavily dependent on foreign trade, the country
nevertheless had one of Eastern Europe's smallest international
debts to noncommunist countries.
The Czechoslovak economy had serious problems, however.
Investments made in industry during the late 1970s and early
1980s had not yielded the results expected. Consumption of energy
and raw materials was excessive. Czechoslovak leaders themselves
decried the economy's failure to modernize with sufficient speed.
According to many Western analysts, other constraints were
inherent in the communist system imposed in the late 1940s; yet
the cautious Czechoslovak leadership of the 1980s appeared
reluctant to make major changes.
The differing statistical concepts and procedures used by
communist and noncommunist economists make assessment of the
status of the Czechoslovak economy complicated. In recent years,
some Western economists have been especially vexed by what they
consider to be official Czechoslovak manipulation of economic
statistics. Various studies of the official industrial production
index have suggested several biases, the most important of which
appeared to be the inclusion of new products at increased prices,
although a given product may have been almost unchanged from one
manufactured a year earlier. This kind of bias could accentuate
fast-growing industrial branches and sectors as opposed to slower
growing ones or those that produced a standardized product, and
thus the statistics could lead to a skewed picture of overall
industrial growth. Foreign trade statistics are particularly
difficult to assess because a variety of currency conversion
methods are employed to calculate trade turnover value. Data
calculated on the basis of noncommunist concepts will be
identified here by the use of such Western terms as gross
national product; Czechoslovak statistics will be called
official data or identified by such terms as net material
product or national income.
Data as of August 1987
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