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East Germany The Economy
THE ECONOMY of the German Democratic Republic (East Germany) has
developed impressively since its founding in 1949. By almost any
indicator, it stands at the top of the socialist world in
economic development and performance. The country has the highest
per capita income, the greatest number of automobiles and
hospital beds per 1,000 inhabitants, the highest labor
productivity, and the highest yield in the agricultural sector
per agricultural worker. It uses the most electricity and has the
greatest number of television sets and radios among member states
of the Council for Mutual Economic Assistance (Comecon), all on a
per capita basis. East Germany is a major supplier of advanced
technology to the other members. In short, it is the most modern
and industrialized socialist state.
The condition of the economy is all the more remarkable when
one considers the circumstances under which it has developed. The
country was devastated during World War II. Subsequently Soviet
occupation of East German territory placed heavy burdens on the
population and resources. In addition, the partitioning of the
German lands after the war seriously disrupted the economy. East
Germany's heavy industry capacity was very low, and its raw
material supplies, except for lignite (low-grade) coal and
potash, were almost nonexistent. The fact that the country for
many years lacked international recognition as a sovereign state
certainly did not contribute to economic growth, and its
population loss before construction of the Berlin Wall was a
significant drain on labor resources.
Explaining the relatively successful economic record achieved
by
East Germany after these early troubled years is not as easy
as many assert. It is clear, however, that the previous level of
German industrialization and the existence of a trained and
diligent labor force have been important factors in the success
story. To this East German leaders themselves would add two other
explanations: the socialist character of their system and the
help they received from the Soviet Union, particularly after
1953, the year of Joseph Stalin's death.
The differing statistical concepts and procedures used by
communist and noncommunist economists, both of which have
drawbacks, result in differing images of East Germany and the
functioning of its economic system. Data calculated on the basis
of noncommunist concepts will be identified by the use of such
Western terms as gross national product; East German
statistics will be called official data or identified by
such terms as gross social product or national
income.
Data as of July 1987
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