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Germany (East)

 
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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

Germany [East] - TABLE OF CONTENTS

  • The Economy


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