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East Germany ECONOMIC SECTORS
Mining, Energy, and Industry
Industry is the dominant sector in the East German economy
and is the principal basis for the relatively high standard of
living (see
table 10, Appendix A). East Germany ranks among the
world's top industrial nations, and in Comecon it is second in
total industrial output only to the Soviet Union.
East Germany has an abundance of lignite, of which it is the
world's largest producer. Reserves of lignite that can be mined
with up-to-date technology are estimated at 24 billion tons, of
which 92 percent is suitable for open-pit mining. The major
portion of the workable reserves is located in Cottbus and
Dresden districts adjoining the Polish frontier. Other important
deposits are located in Halle and Leipzig districts. In 1985
production of raw lignite was 312 million tons, up substantially
from 267 million tons at the beginning of the five-year plan in
1981.
Lignite is used primarily as a fuel for thermal-electric
power stations, for the production of coal gas, and as a raw
material for the chemical industry. In 1985 approximately 72
percent of domestic energy demand was met by this source. It is
inferior to hard coal, crude oil, and natural gas and is less
economical to use than those products. Because of lignite's high
moisture and low caloric content, it is also costly to transport.
The bulk of the output is therefore consumed close to the mining
centers. A portion of the lignite output is converted into
briquettes to improve its heating qualities and to reduce the
cost of transportation.
Reserves of hard coal have always been relatively
insignificant. After having declined steadily during the previous
20 years, in 1978 mining of East Germany's very small reserves of
hard coal had virtually ceased by 1978; reserves were becoming
depleted, and in 1979 only 50,000 tons were mined. As a result,
East Germany imported the bulk of its yearly requirements for
hard coal, primarily from the Soviet Union, Poland, and
Czechoslovakia.
As of 1985, East Germany possessed only one functioning
nuclear reactor for production of electricity--in Lubmin near
Greifswald--despite earlier more ambitious plans. Nuclear energy
played a relatively modest role in the country's energy supply
situation. In 1985 only about 10.5 percent of East Germany's
electricity needs were met by nuclear energy, which represented a
decline from 12 percent in 1980.
East German iron ore deposits are widely scattered, and the
seams are expensive to mine because of their relatively low ore
content. In the 1980s, annual output of iron ore fell far short
of the country's industrial needs; thus East Germany imported
large amounts of this material. The country also imported
virtually all its requirements for manganese, chrome, and other
ferroalloys. Nonferrous metals, including copper, lead, zinc, and
tin, were mined in small quantities. To supplement the limited
domestic production, East Germany imported substantial quantities
of nonferrous metals from the Soviet Union.
Before World War II, the area that later became East Germany
was not well developed industrially. Because this area lacked raw
materials, heavy industry was generally located in other parts of
the German state. Compounding the problems for the newly created
East German state in 1949 was the massive destruction during
World War II of the industrial plant that had existed there and
the subsequent Soviet dismantling and removal of factories and
equipment that had survived the war. After Soviet demands for
reparations ended, construction of an industrial base for the
country began in the early 1950s. However, East Germany's
industrial "economic miracle" did not begin until after the flood
of emigration had been halted in 1961. Given a base of 100 in
1980, the official index of gross industrial production increased
from 10 in 1950 to 32 in 1960, 58 in 1970, and 122 in 1985.
Obviously the country's industry had come a long way from its
shaky beginning four decades earlier.
According to official sources, as of 1985 chemical products
and machinery were the most important groups in industrial
production in East Germany, providing 19.7 and 18.9 percent of
the value of total industrial output, respectively. They were
followed by the agricultural and food-processing industry at 13.5
percent, the energy and fuel industry at 12.2 percent, light
industry (excluding textiles) at 9.5 percent, metallurgy at 9.4
percent, and electrotechnical and electronic equipment at 8.5
percent. Other significant groups were the textile industry (5.8
percent), the construction materials industry (2.0 percent), and
the water supply/conservation industry (0.6 percent).
As of 1985, about 3.2 million, or 37.9 percent of the
approximately 8.5 million persons in the labor force, were
employed in the industrial sector, according to official
statistics. Their efforts produced 70.3 percent of the country's
net product.
Data as of July 1987
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