East Germany Table of Contents
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