A BERLIN WALL LIVING STANDARDS IMPROVE ON THE EAST GERMAN SIDE

Press, Volume CIII, Issue 30562, 3 October 1964, Page 12

A BERLIN WALL LIVING STANDARDS IMPROVE ON THE EAST GERMAN SIDE

I By

MICHAIL CONNOCK,

. Bait Kuropean Cormpondent of th* “Financial Tim*i"J (Reprinted t>V arronpem«ntJ

The Berlin Wall is as harsh a reality as ever in Eas * regime even adopts an attacking line—last week, on a , tou^^ i E _ a Jis n the I was taken to see it at the Brandenburg Gate. An Anny P ’ •press officer of the commanding general, described it in t r i a ; m phrase as an “anti-fascist protective wall and repeated that it is designed to keep out “agents and provocateurs. e» g .. statistics for the number of “provocations instigated by shooting or even throwing stones across it, but claimed no many of his own people had been shot trying to escape across it. Yet behind all this, there is a great improvement in the mood of the East German people, for the economic situation has become better.

Two years ago, during the fair, the shops in Leipzig were stocked up to impress West Germans and foreigners but even a taxi-driver made a point of telling one that elsewhere, in East Germany there was no meat to be bought, no green vegetables, often no milk.

Now, no-one bothers to make such complaints. If asked, people say that the only food shortages are of oranges and bananas. The shops, not only in Leipzig in fair-time but in other towns as well, look reasonably wellstocked with the ordinary food items and also with household goods. People are tolerably dressed in clothes which, while certainly not the last word in elegance, match the standards of the cheaper West German department stores. Reduced Population The waste lands of East Berlin, whose contrast with West Berlin often causes observers to exaggerate the difference in living standards between the two parts of Germany, are still largely untouched, as are those of Dresden. But a few minutes spent at the morning or evening “rush-hour” in East Berlin give much of the explanation. The streets are half-empty; in fact, there would not be enough people to live in the city were it reconstructed. East Berlin’s population of 1.3 m is less than half the prewar total for that part of the city. This is not to say there is no housing shortage. But there are certainly many new blocks of flats (of the Soviet industrial-building style, with 50 flats built from prefabricated parts in 42 days by 16 meh, according to official figures) both in East Berlin and in Dresden. Dresden, with some 500,000 people, claims to be building 3000 flats a year. These improvements have been achieved by an economic policy which, in contrast to the country’s rigid political line, is as liberal and pragmatic as anywhere in the Soviet bloc. The overambitious attempts at planfulfilment over a wide range of investment projects, which threatened to lead to an

economic standstill two years ago, were abandoned. Investment plans were pruned and the current fiveyear plan was dropped. Industrial undertakings now quote their targets for the comfortably distant year of 1970 and meanwhile, one suspects, concentrate on sound development without too much regard to the longterm targets. Flexible Planning This has been made possible by the new and more flexible planning system, brought in mainly last year. Factories in any given industry are united in combines known as V.V.B. (Vereinigungen volkseigener Betriebe: union of people’s own concerns). The managements of these V.V.B. operate much like large companies in capitalist countries. They deal directly with foreign customers, thus eliminating the specialised foreign trade corporations which in other Communist countries make foreign trade a cumbersome affair. The- V.V.B. also pay managers according to the general quality of their work, rather than for the achievement of pre-determined plan figures. This acts as an incentive to maintain high production quality levels, a smooth flow of goods etc. There seems little doubt also, that the large private sector helps greatly to fill but the gaps in the economy. Of some 15,000 industrial concerns, about 5000 are private, a further 5000 private with State participation, and only the remaining 5000 fully State-owned. These last, of course, include all the biggest factories, so that the number of workers in State industry is some 2.4 million to only 500,000 in private and semiprivate industry. But the private industry tends to satisfy demand for all the small items such as nails and screws, electric plugs or bath stoppers, whose absence often plagues "planned” economies. Small private concerns have been given greater freedom to obtain supplies and to sell them around the country. These liberalising measures have enabled production to continue moving forward. In 1963 industrial output rose by 4.9 per cent, which was probably seen as a surprisingly good increase although the original target was 6.4 per cent. In the first half of this year a 7 per cent growth rate was claimed. Farming Troubles Only the farms seem to. present a wholly intractable part of the economy because of the labour shortage as well as the troubles of collectivisation. All students have to “volunteer” for three weeks of paid potato picking this month, while people in factories or offices must do a token Sunday morning. The overall impression of East Germany now certainly confirms the often-repeated statement that this is the country with the highest average standard of living of the Communist world. An East German skilled worker earns about 600 East German deutsch marks (D.M. Ost). At the D.M. 11.20 to the £1 rate of exchange for the West German deutsch mark (D.M. West) to which the D.M. (Ost) is theoretically equal, this makes £53 10s. Nearly all women in East Germany work, so that a family income is generally D.M, 1000 or so. Professional incomes range mainly between about D.M. 900 and D.M. 1400, but with

factory directors earning D.M. 2000 or more. Food price levels, mark for mark, are not much higher than in West Germany, apart from some highly-taxed items like coffee. Clothes are considerably more expensive, with a man’s suit which might cost D.M. (West) 200 in Bonn, costing D.M. (Ost) 350 in East Berlin. Consumer durables such as television seta (D.M. 1400 to D.M. 2000) are much more expensive in East Germany than in Western Europe. Cars sell at prices accessible only to highly-paid executives. The 1000 c.c. Wartburg, now costing £5BO in Britain sells after a two-year wait for D.M. 16,000 (£1430) in East Germany. . . u, Rent is the most notably cheap item, at about D.M. 50 a month for a flat, including central heating. But people renting new flats now generally have to pay D.M. 2500 as a contribution to the housing co-operative. This is returnable if the tenant moves out, and in fact constitutes a sort of key-money. Capital For Chemicals What of further progress? Like all the other Communist countries, East Germany is now developing her petrochemicals industry. Planned investments in this sector of D.M. 20,000 million by 1970 are the biggest single item of intended development expenditure. In this connexion, the £3.7m and £4.7m chemical plant contracts given ten days ago to Humphreys and Glasgow and to the French company Ensa are highly important. The significant point is that the credit terms for these contracts are long-term (it is in fact the first time that a French company has definitely been known to conclude an East bloc contract giving credit for more than five years). The scarcely disguised hope of the East German authorities is that the West German Government will be provoked into offering competing terms to keep foreigners out of the German market. Certainly massive capital aid from West Germany might be one way to “normalise” the situation in East Germany. For as long as the East German standard of living remains behind that of the West, the East German Government will feel unable to remove the Wall for fear of losing many of its already scarce key workers. Imports Of Workers There is perhaps one other solution. This would be for East Germany to import “guest workers” from Poland and Hungary where there is a disguised labour surplus, in the same way that West Germany imports workers from countries of under-employ-ment in Southern Europe. This idea goes flatly against current official thinking in the Soviet bloc. But it might not always do so. Communist Jugoslavia already allows workers to go even to capitalist West Germany. Many of East Germany’s new economic principles are strikingly similar to those applied in Jugoslavia for some tiine: movement of workers could become respectable, too.

Prize Sow.—A Landrace sow bred by D. W. McFadden and Sons, of Wellsford, won first prize and was awarded the junior sow champion ribbon at the Perth Royal show last week.—(PA.)