JPRS 72120

2 6 October 19 7 8

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TRANSLATIONS ON EASTERN EUROPE

ECONOMIC AND INDUSTRIAL. AFFAIRS

Mo, 1805

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4. Title and Subtitle

1. Report No.

JPRS 72120

TRANSLATIONS ON EASTERN EUROPE - ECONOMIC AND INDUSTRIAL

AFFAIRS, No. 1805

7. Author(s)

9. Performing Organization Name and Address

Joint Publications Research Service

1000 North Glebe Road

Arlington, Virginia 22201

12. Sponsoring Organization Name and Address

As above

3. Recipient's Accession No.

5. Report Date

26 October 19 78

6.

8. Performing Organization Rept.

No.

10. Ptoject/Task/Work Unit No.

11. Contract/Grant No.

13. Type of Report & Period

Covered

14.

15. Supplementary Notes

16. Abstracts

The serial report contains articles on economic theory, organization, planning

and management; major agreements on and development of trade within CEMA and

outside the Bloc; articles on all aspects of the materials, services, machine,

electronics, and precision equipment industries; and concepts and attainments

in agriculture, forestry, and the food industry.

17. Key Words and Document Analysis. 17a. Descriptors

x International Affairs

x Albania

Bulgaria

x Czechoslovakia

Economics

Technological

_x East Germany

_x Hungary

_x Poland

x Romania

_x Yugoslavia

17b. Identifiers/Open-Ended Terms

17c. COSATI Field/Group 5C, 131

18. Availability Statement

Unlimited availability.

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FORM NTIS-35 (10-70) USCOMM-DCAQE 40329-P71
JPRS 72120

26 October 19 78

TRANSLATIONS ON EASTERN EUROPE

ECONOMIC AND INDUSTRIAL AFFAIRS

No. 1805

CONTENTS PAGE

INTERNATIONAL AFFAIRS

Briefs

Soviet Minister Visits Czechoslovakia 1

CPCZ Delegation in SFRY 1

ALBANIA

Briefs

Dutch Trade Mission

CZECHOSLOVAKIA

Briefs

Update on Slovak Agriculture 3

Slovak Fieldwork Situation *+

New Large-Volume Food Warehouse • J+

Frult, Vegetable Consumption in Prague 4

EAST GERMANY

New Trends, Equipment for Data Processing Described

(B. Kurt, H.-J. Weinertj MILPTAERTECHNIK, 1978)

HUNGARY

Technical Development of Transport Facilities Outlined

(Gyorgy Onozo; KOZLEKEDESI KOZLONY, 20 Aug 78) 1^

[III - EE - 64]
COMTEMTS (Continued) ^S0

Improvement of Tourist Facilities Urged

(Zsuzsa Gal; FIGYELO, 13 Sep 78) • • • •

2

9

Plans, Projects, Achievements of Aluminum Industry

Highlighted

(Istvan Fodor; FIGYELO, 23 Aug 78) • 37

Possibilities of Increasing Food Industry Exports Explored

(Istvan Katona; FIGYELO, 23 Aug 78) ^3

POLAHD

Olszowski Comments on Socioeconomic Policy

(Stefan Olszowski; GOSPODARKA PLANOWA, Jul-Aug 78) .. 48

Politburo Examines Power Supply and Other Problems

(TRYBUEÄ LUDU, 10 Oct 78) 59

ROMANIA

Development of Industry, Labor Force Traced

(Grigore Valceanu, Elena Badea; REVISTA ECONOMICA,

k Aug 78) • •

6l

Bucharest Consumer Goods Fair Described

(R. Bujor; REVISTA ECONOMICA, k Aug 78) 68

Plastics Enterprise Workers Focus on Problems

(Dorin Constantinescu; REVISTA ECONOMICA, k Aug 78) . 72

YUGOSLAVIA

Budget for 1979 Debated in Federal Chamber of SFRY Assembly

(EKOWOMSKA POLITIKA, 25 Sep 78) 78

Dangers of Chronic Overspending at the Expense of the

Economy

(BORBA, 23 Sep 78) 80

Lack of Raw Materials in Nonmetals Industry

(PRIVREDWI PREGLED, 18 Sep 78) 82

Croatian Foreign Trade Shows Decline in First Half of 1978

(EKONOMSKA. POLITIKA, 18 Sep 78) • • • 83
COfflENTS (Continued) Page

Briefs

JAT Operations oilFall Planting ~ OilCost of Living 84

Port of Bar 84

Latin American Trade 84

Trade Union Reorganization 85

Inflation Data 85
IKTERKATIOKA.L AFFAIRS

BRIEFS

SOVIET MINISTER VISITS CZECHOSLOVAKIA—In Prague on 18 September, Jaroslav

Prokopec, Czech minister of health, welcomed Afanasiy Melnichenko, USSR

minister of medical industry, and his entourage. They have come for a week's

visit to intensify the mutual cooperation in production of medical supplies.

/Text/ /Prague RUDE PRAVO in Czech 19 Sep 78 p 2 AU/

CPCZ DELEGATION IN SFRY--A CPCZ study delegation, led by J. Kas, deputy

chief of the CPCZ Central Committee department of propaganda and agitation,

has arrived in Belgrade at the invitation of the LCY Central Committee

Presidium. On 10 October the delegation had talks with Zagar Primoz,

deputy chief of the LCY Central Committee's department of political propaganda and information, and paid a visit to the editorial office of the

party daily BORBA. [Text] [Prague RUDE PRAVO in Czech 12 Oct 78 p 7 AUJ

CSO: 2400
ALBANIA

BRIEFS

DUTCH TRADE MISSION—The Hague, 27 Sep—A Dutch economic mission will visit

Albania from 1-6 October to promote exports and imports of goods and services,

it was announced here today. The mission will be headed by Mr R. F. Zijlstra,

a director of the Netherlands Council for Trade Promotion. Dutch-Albanian

trade has been on modest scale so far. In 1977 Holland exported hides, oils,

textiles and chemicals worth 14 million guilders to Albania. It bought

a variety of products, including preserved vegetables, carpets and clothing

worth 12.7 millions. The visit will be in return for two Albanian trade

missions which have visited Holland. [Text] [The Hague ALGEMEEN NEDERLANDS

PERSBUREAU in English 28 Sep 78 p 2]

CSO: 3120
CZECHOSLOVAKIA

BRIEFS

UPDATE ON SLOVAK AGRICULTURE—Winter will be here before we know it and

there still remains much field work to be done. At the present, the most

important task is to finish preparing the soil and plant winter crops as

fast as possible. It is imperative to utilize every hour of sunshine.

In the Nitra Okres, [West Slovakia] farmers have harvested silage corn

and ploughed the fields for winter crops by 90 percent. At the moment

they are concentrating on planting winter wheat and fertilizing with barn

manure. From the planned area, winter wheat has been sown on almost half

of it. The percentage of completed seeding could be higher were it not

for the fact that in some agricultural enterprises the daily flowcharts

are not being realized to the full extent. The largest hindrance is the

shortage of qualified tractor operators and for this reason the machinery

is not being fully utilized. The rate of autumn work is also being slowed

down because of the lack of suitable, high-output technology. Barn manure

has been ploughed in on almost two-thirds of the planned area. The delivery

of 100,000 tons of the manure for the entire okres is to be accomplished

by the Agrochemical enterprise; so far, it delivered 68,500 tons. The

task should be accomplished by the middle of November. The Levice Okres

[West Slovakia] is also working at full speed and has only 1,400 ha left

to plough. Soon it will reach 50 percent in seeding winter wheat. From

the planned 20,000 ha they have so far ploughed in barn manure on 13,000

ha. In the East Slovakia Kraj, the potato harvest is in its second half.

Around 60 percent of the entire area has been gathered. Day by day they

are narrowing the gap in the delayed fieldwork, which, compared with last

year, represents more than 16 percent. After urgent reminders about better

utilization of potatoe combines, the situation has improved and there are

more than 220 machines in the fields now. A complicated situation exists

in the Presov Okres where particularly in the northern parts combine gathering is almost impossible. Here, brigade workers will have to gather the

potatoes manually. Sugar beet harvest is continuing at a good rate, according to a flowchart worked out by the Trebisov sugar refinery in cooperation

with the Okres Agricultural Administration and agricultural enterprises.

However, attention is more and more urgently being concentrated on the

preparation of soil and winter seeding. [Text] [Bratislava R0LNICKE

NOVINY in Slovak 11 Oct 78 pp 1, 2]
SLOVAK FIELDWORK SITUATION—In Slovakia, Cooperative and State farms have

so far lifted 80 percent of potatoes and harvested 90 percent of silage

corn. However, a very serious problem exists in the lag of winter crop

planting. In the West Slovakia Kraj, in the Trnava Okres there are problems with dry weather which makes preparation of soil for winter seeding

difficult. Of the planned 22,000 ha, farmers have planted 60 percent of

the area with winter wheat. Grain corn, which is grown on 9,745 ha has

so far been harvested from 2,000 ha and sugar beets from 40 percent of

the area. Some 14 drying installations are operating nonstop and so far,

4,200 tons of grain corn has been dried. Central Slovakia farmers are

concentrating on finishing the potato harvest. Still one quarter of the

total 16,000 ha remains to be done. In the southern okreses they are also

working on harvesting grain corn which, due to weather vagaries, is considerably late in ripening. Sugar beet fields are also very busy. In the

East Slovakia Kraj, they planted more than 20,000 ha of grain corn this

year. A biological inspection at the beginning of September showed that

expectations will have to be lowered and consequently about 10,000 ha

have been reclassified for silage corn. However, the last few weeks have

been kind to corn and 6 okreses in the kraj have reclassified corn back

to grain. Although the yield will not be as good as expected in some

instances, they will start harvesting by next week. [Text] [Bratislava

ROLNICKE NOVINY in Slovak 14 Oct 78 pp 1, 2]

NEW LARGE-VOLUME FOOD WAREHOUSE--Workers of the Ostrava Construction Works

are completing a large-volume foodstuff warehouse in Prague-Ruzyne. The

warehouse, which takes up more than 21,000 sq meters and whose storage area

comprises almost 18,500 sq meters will serve the Potraviny [Food] enterprise. [Text] [Bratislava ROLNICKE NOVINY in Slovak 11 Oct 78 p 3]

FRUIT, VEGETABLE CONSUMPTION IN PRAGUE--During the last 9 months, 73 freight

cars of vegetables and 156 freight cars of southern fruit more than last

year were sold in Prague. The Prague population also consumed more potatoes

than last year; however there was early fruit shortage of 11 freight cars

because of bad harvest. The Zelenina [Vegetables] Prague enterprise

announced that this year there will be plenty of all varieties of autumn

vegetables, including carrots, celery, parsley, onions, garlic, cabbage

and white cabbage. At the moment, cauliflower is most plentiful and is

being sold at temporarily lowered prices. It is anticipated that 35 freight

cars of tomatoes, 10 freight cars of paprika, 40 freight cars of bananas

and 20 freight cars each of oranges and grapefruits will be available from

import. At the present time, apples, grapes and pears are being sold in

quantities that should fully satisfy demand. Lemons are also plentiful;

however, there is a shortage of Italian prunes. As opposed to 1976, consumption of fruit and vegetables in Prague last year increased by almost

17 percent, fruit from milder climates by almost a quarter and southern

fruit by less than 7 percent. It is gratifying to watch continuation of

the upward trend this year as well. Everyone should take advantage of the

availability of vegetables and fruit and include them in their diet. [Text]

[Prague RUDE PRAVO in Czech 10 Oct 78 p 2]

CSO: 2400
EAST GERMANY

NEW TRENDS, EQUIPMENT FOR DATA PROCESSING DESCRIBED

East Berlin MILITAERTECHNIK in German No 5, 1978 signed to press 7 Jul 78

pp 262-264

[Article by Lt Col B. Kurt, engineer, and Maj H.-J. Weinert, engineer: "Effective Application of EDP Through Rationalization of Data Acquisition"]

[Text] In the directive of the Ninth Party Congress of the Socialist Unity

Party on the subject of the 5-year plan for the development of the economy

of the GDR in the years 1976-1980 the importance of data processing technique was emphasized insofar as it relates to the further rationalization

and intensification of processes of production, management and planning and

measures were agreed upon for the further development of systems documentation and equipment. The extensive use of electronic data processing (EDP)

makes it possible to save worktime, work forces and jobs in addition to reducing the time required for routine work besides making it possible to use

the time for creative activities. But this presupposes that the users make

a transition to new forms of organization, information acquisition and preprocessing. This total "data acquisition" complex has an essential effect

upon the full utilization of the electronic computers employed.

The ratio of the time required for data acquisition to that required for

data processing by computer amounts to about l6:l. Hence computers can be

fully utilized only if the data required for carrying out information processing and calculating tasks is made available promptly and correctly.

Data acquisition is the bottleneck in the employment of computers and annually the amount of data requiring evaluation increases by from 15 to 20 percent. This discrepancy must therefore be diminished or eliminated by measures of rationalization such as

a. the introduction of new forms of organization: "auxiliary" data acquisition and the acquisition of data at its place of origin without the employment of special work forces;

b. provision of equipment requiring less expenditure of work forces for

data acquisition and permitting faster acquisition.
1. The Status and Development Tendencies of Data Acquisition

1.1. Organization Forms of Data Acquisition

The principal form of organization at the present time is central data acquisition. Its characteristic feature is the delivery of forms filled out

by the users to central data acquisition offices.

The constant number of work forces available for data acquisition and the

constant level of technology available eliminate any prospect of increased

efficiency, that is, no further tasks can be taken over. Therefore it is

necessary to make data acquisition more effective through equipment development, but also especially through improved forms of organization.

Such an improved form of organization already being used to a limited extent

is decentralized data acquisition. In this system the data are acquired by

the user. Experienced work forces employ organizational accounting and

bookkeeping computers for the solution of specialized problems, with the

data being at the same time stored in data banks for further processing on

computers. This form of data acquisition is called "auxiliary" data acquisition. Its users will in future attach more importance to it because only

in this way can the data acquisition bottleneck be dealt with, thus making

it possible for the users to complete further projects. The following advantages justify an accelerated transition to this form of organization:

a. the security of the acquired data is enhanced because of the specialized

knowledge possessed by the work forces;

b. a second acquisition process, that is, transfer of the data from the

primary document to data banks, becomes unnecessary;

c. possible modes of programming and existing storage technology in the

equipment make it possible to partially automate the process of task performance;

d. the use of manual methods of data acquisition is reduced by employing

already available data banks (multiple use of the once acquired data) as input data banks in carrying out tasks on the available equipment.

By the use of "auxiliary" data acquisition there can be a saving of time,

work forces and material (especially paper) in the total data acquisition

complex.

A new decentralized form of data acquisition is the acquisition of data at

its place of origin without the employment of special work forces. In this

form of organization the computers accept the data directly from automatic

inputs or from manually operated special input equipment (subscriber points)

directly from the place of origin of the data. With the aid of this form of

organization time, work forces and material are saved since it is no longer

necessary to fill out a primary document.
To achieve this form of organization on the equipment side use is made, for

example, of the semiautomatic data acquisition system daro l600. In conjunction with various computers this equipment will he employed especially

wherever data are to be acquired at decentralized locations with subsequent

central processing and in certain cases with data being again immediately

returned to the decentralized locations [l].

Existing partial results of tests which have been conducted show that employment [of such equipment?] in this data-intensive domain is both possible and

necessary. The existing work forces in the storage sites will carry out

data acquisition in its "auxiliary" form.

In the following paragraphs two new data acquisition devices are described

which require less expenditure of work forces and permit faster acquisition.

Figure 1. Data acquisition device daro 1372.

1.2. Alphanumeric Data Acquisition Station daro 1372

The device (Figure l) is programmable via an input device for magnetic cards

or via a magnetic tape cassette. A microprocessor controls the central

unit. The data introduced by the operators can at any time be compared with

the numeric display and corrected. A rapidly operating printer makes it

possible to continuously check the sequence of operations. At the same time

this yields a reliable record. The data output is on punched tape (5- to 8-

track) for further processing or on a magnetic tape cassette. The magnetic

tape must first be converted for processing on a computer. However, this

converter is still in process of development.
Figure 2. Card reader daro 1375-

1.3. Card Reader daro 1375

By means of the card reader (Figure 2) large masses of numerical data can be

acquired. Using a lead pencil marks are placed on a formulary (original

voucher) at indicated places. This original voucher is readable visually

and by machine; it can be produced in the format Ak, A5 and A6.

The output of card reader data is on a magnetic tape cassette and is transferred through a converter to an ESER-compatible magnetic tape. This converter will be available after 1979-

2. Special Problems of Data Acquisition in Military Facilities

2.1. Equipment for Data Acquisition

For the tasks of day-to-day operations it is possible to employ commercially

available data acquisition equipment. For this purpose there are several

forms of equipment available in the GDR:

a.

d.

automatic booking equipment Ascota 071/100 LB/daro 1353;

accounting machine Soemtron 385;

organization equipment Optima 528/daro 1^15; and

data acquisition device Cellatron 8033/daro 1310.

What problems can be solved with these devices and how are the results further processed?
Bild 3 Buchungsautomat daro 1353

Figure 3. Automatic booking machine daro 1353.

The automatic booking equipment Ascota 071/100 LB and its successor daro 1353

(Figure 3) are employed inter alia in financial, inventory and capitalization

accounting and can also be used for data acquisition in other areas. Day-byday task performance is supported by programmable functions. The output of

the results is via a printer and on a punched tape (5- to 8-track) for further processing on computers.

Figure h. Soemtron 385 accounting equipment.

The Soemtron 385 accounting machine (Figure k) is used as an organization,

booking, accounting and invoicing machine for the solution of complicated

tasks in stockpile maintenance, planning and accounting in various areas of

insurance, wage and income and cost accounting as well as for producing procurement and inventory surveys. It can at the same time be used for the acquisition of alphanumeric data. Since the program cassettes can be used interchangeably many programs can be processed. Data requiring processing can

be introduced not only via a keyboard but also through punched tape (multiple use of once acquired data). The output is both via printout and via a

punched tape (5- to 8-track) for further computer processing.

9
Figure 5. Organization equipment daro lUl5.

The organization equipment Optima 528 and its successor model daro lUl5

(Figure 5) are employed for invoicing, producing and filling out complicated

forms, the repeated writing out of large quantities of relatively constant

information, including amongst others documentation and information for filing, inventory maintenance, contract and commitment control as well as for

correspondence. With this device at the same time it is possible to acquire

alphanumeric data for further computer processing.

The lettering of complicated forms is automatically controlled by a program

cassette or by a controlling punched tape. The output is via printout and

can at the same time be stored on punched tape (text storage) for repeated

printout or for correction (changes and extensions) of the information as

well as being stored on a punched tape (8-track) for computer processing.

The Cellatron 8033 data acquisition device and its successor model daro 1310

(Figure 6) are employed for the primary acquisition of alphanumeric data in

the form of tables, forms and vouchers with punched tape being prepared simultaneously for processing on computers. In addition these devices can be

used for writing electronic computer programs and programs for numerically

controlled tool machines.

The tape punch can be turned on and off via a control bar on the typewriter.

This makes it possible to select specific columns of a form for simultaneous

recording on punched tape. The punched tapes produced (5- to 8-track) can

also be read into and processed on accounting and organization equipment.

The successor models have a higher level of operating convenience and can

also in part carry out functions ranging beyond the tasks which it was previously possible to deal with. Because of their improved technical parameters they contribute to the rationalization of data acquisition.

10
Figure 6. Data acquisition device daro 1310.

2.2. On the Organization of Data Acquisition

Improved performance in data acquisition can be achieved through new forms

of organization. The central data acquisition capacity corresponding to the

equipment and staff being employed is for the most part being fully utilized

by the projects currently requiring processing. But to a small extent some

users are already acquiring in their own area the data needed in working up

their projects.

The continuous expansion of the areas of application of electronic data processing imposes higher demands on data acquisition for with each newly arriving project there arises a need for data acquisition capacity. In order

to cope with these demands the effectiveness of the data acquisition must be

enhanced through complex measures in the engineering and organizational domain .

2.3. Rationalization of Data Acquisition Enhances Its Effectiveness

The rationalization of data acquisition is the only accessible path toward

an enhancement of the effectiveness of data acquisition. The number of persons employed for data acquisition can be increased only within limits.

Therefore it is necessary to better exploit the available equipment by means

of improved organization.

11
Higher effectiveness of data acquisition is achieved by meeting the following demands:

a. minimization of the expenditure of work force;

b. minimization of data movement;

c. prompt ["time-optimal"] and correct preparation of data;

d. continuous data acquisition; and

e. low costs (at present up to two-thirds of the cost of data processing is

attributable to data acquisition alone).

How can these requirements be met?

Minimization of personnel use is attainable by "auxiliary" data acquisition.

All those devices briefly described under item 2.1 are usable for this organizational form of data acquisition. Colleagues responsible for invoicing,

booking and accounting can in a short time learn to operate and program these

devices and are then in a position to more rapidly collect the information

and data requiring evaluation for a particular task in the form of tables,

forms and vouchers. At the same time in consequence of the technical capabilities of these devices data output on punched tape is possible which at

any time can be employed for further evaluation on a computer or for the input of data in other areas—instead of the time-consuming input by means of

an operator at a keyboard. Thus no additional work force is required for

data acquisition since the data are being acquired by the "auxiliary" process.

The minimization of data movement can be achieved by a one-time primary acquisition of data followed by the multiple use of such data. The traditional

mode of data acquisition—filling out of a primary form by the user, punching

of machine-readable data banks in data acquisition offices or in computer

facilities, requires much time. Mistakes, changes or supplements necessitate repeated transfer and return, that is, the data movement can become extensive.

One-time initial acquisition of data through a colleague of the user in the

primary processing process makes it possible to reduce the traditional form

of data acquisition to the work of punching out the data onto machine-readable data carriers. The data carrier thus produced can subsequently be employed in multiple processing of these data or in making changes or supplements. Repeated data acquisition is not necessary.

At the same time in this way support can be given to prompt and correct

preparation of data.

12
Frequently computers are unable to complete the processing of projects on

schedule because the data were not promptly supplied or was erroneous when

it was supplied. If data acquisition is carried out by specialized colleagues of the user then schedules can be more successfully met and the

probability of error reduced.

Of importance for rational data acquisition is continuous acquisition. By

this means peak loads for the staff engaged in data acquisition are reduced

and it thus becomes possible to employ such staff continuously. In addition

the available equipment can be better utilized and the quality of data acquisition enhanced.

Meeting these requirements will also reduce the cost of data acquisition.

Even in the phase of problem formulation while setting up a project designed

to solve informational or computational problems the user must make clear

and realizable decisions regarding the organization, acquisition and preprocessing of information as well as with regard to data storage and data exchange .

Previous forms of organization of the manual processing of information cannot be carried over to machine processing. The condition of strain in which

our available data processing capacity now finds itself and the new technology which has already begun to come into use require that all users make the

transition to new forms of organization. There is also a need for the users

to review the contemporary relevance of projects which are currently pending.

8008

CSO: 2300

13
HUNGARY

TECHNICAL DEVELOPMENT OF TRANSPORT FACILITIES OUTLINED

Budapest KOZLEKEDESI KOZLONY in Hungarian No, 34, 20 Aug 78 pp 604-609

[Lecture by Gyorgy Onozo chief Main Technical Department, Ministry of

Transportation and Postal Affairs: "Technical Development in Transportation"

delivered at the Summer University of Shippers in Kecskemet on 14 July 1978]

[Text] Main Trends and Aims in the Development of Transportation

The technical system of transportation is the most expensive part of the

infrastructure, its technical standard has a long-range influence on the

development of settlement systems, as well as on the production, distribution and consumption systems.

Currently transportation controls about one-quarter of the fixed assets

of the national economy. Transportation structures and equipment have a

useful lifespan of several decades and many years are needed for their

construction. This explains why its technical development requires longrange planning and the material resources must be made available in a

proportionate and concentrated manner.

In Hungary the technical standard of transportation is generally lower than

desirable (in certain areas our backwardness is estimated to be about 15-to20 years).

This backwardness is relatively small if compared to our national income and

standard of living, and shows up mostly in the technical level, in the

quality of output and in the lack of unit and reserve capacity in certain

branches (especially the railroads).

In the last decade the technical development transportation in Hungary—

primarily due to the gradual implementation of the aims of the 1968 transportation policy directives—greatly contributed to the solution of international and domestic transportation tasks. The simultaneous application

of both the new and the old technologies, however, has created increasing

tension and caused a number of problems.

14
We must proceed from the following natural endowments In selecting the

directions of the technical development of transportation in Hungary:

—Our country is landlocked, thus, surface transportation will remain the

main means of passenger and freight transportation;

—The main direction of freight transportation is East-West; our existing

waterways are not following this direction but the currently ongoing and

planned canal-constructions steadily improve the outlook of river shipping

and this outlook should be better exploited in the future;

—Our country's central geographic location enables us to handle an increasing volume of transit traffic; the share of international traffic

(exports, imports) in the performance of our transportation industry is

substantial and still continues to increase due to our open economy and

our expanding international cooperation;

—Budapest is the center of our centric railroad and highway systems and it

is considerably greater than any other town in Hungary;

—Our highway density equals the European average, our rail density is

above average; most of the passenger and freight traffic runs over a smaller

part of the network, thus, it is concentrated and a further increase in

concentration can be expected.

—Travel and transportation distances are relatively short due to the small

area of land;

—Within the transportation branches the development of motorization may

be influenced by political and economic factors; pipeline transportation is

developing in a dynamic manner; there are further possibilities in the use

of domestic waterways, in aviation by developing the airport; nevertheless,

the railroads will remain the backbone of the transportation industry. Proper

planning of the long-range division of tasks influences radically the technical

development of the individual branches of transportation, the determination of

individual capacities and beyond that the efficient cooperation of the entire

transportation system, the relative proportions of branch developments and

the factor of concentration of the material means.

Based on the foregoing, the following tasks may be foreseen in the technical

development of the Hungarian transportation industry in the next two decades:

—Counting on increasing transportation (communications) needs, capacity

reserves must be provided to eliminate shortages, particularly to eliminate

major bottlenecks, by the more efficient use of modern management, information- and data-processing methods;

—The speeding up of freight and passenger transportation should be achieved

primarily by reducing idle-times, by reducing or by improving the low-level

handling operations, and, to a smaller degree, by increased the technical

(base) speed;

15
—The main network routes (trunk lines) that handle most of the traffic,

including those in Budapest, should be rebuilt to meet international

engineering parametric requirements—to achieve a harmony of standards

among transportation centers and over interconnecting lines—the systems

handling medium and small traffic but large volumes should be renovated

and maintained by using parameters involving the possibility of large-scale,

low-cost and simple but safe and acceptable applications from the point of

view of transportation;

—Vehicle load and volumetric capacities, or axle load and load-bearing

capacity of the roadways should be coordinated;

—Vehicle stock should be developed in a manner to reduce the number of

types and the principle of "vehicle interrelationship" should be applied;

energy and environmental factors should be taken increasingly into consideration in the engineering parameters of vehicles;

—Freight handling should be modernized by mechanical loading/unloading,

by containerization and by other unit-handling methods, by developing

transportation procedures which are coordinated within the national economy,

by increasing special shuttle-train service (it is expedient to develop

containerization especially with 5-to-40-ton containers but taking into

consideration the receiving, loading and handling capacity of the shippers

and carriers);

—Heavy physical work and the possibility of human errors must be reduced

in the field of transportation; automation should gradually replace human

work; the standard of management and operation within the transportation

industry should be raised by using modern information systems and computers;

—The up-to-date structure of the transportation system should be achieved

primarily by a more advanced cooperation between the railroads and the highway

transportation industry, for this purpose the technical development of these

two branches must be coordinated at meeting points, at the district railroad

terminals;

—Standard designs should be used more extensively during the construction

of transportation facilities, especially buildings; latest technological

developments should be implemented during the construction of transportation facilities and during the designing process of engineering objects to

substantially reduce construction time; the system of investment activity

should be shaped accordingly;

—In conventional transportation the application of the latest scientific

and technological achievements must be speeded up.

The following should be taken into consideration in the development of the

individual transportation industry branches:

In the coming 15 to 20 years there is no need for a substantial change in

the structure of the railroad communication network. However, the building

16
of a bypass railroad line south of Budapest is a long-range task. It is

necessary to coordinate the order of priority for the modernization of the

railroad stations and terminals in Budapest and in the major provincial

railroad junctures also taking into consideration ways to increase the

transit capacity of the lines involved. When the program is completed by

1980 to close down low-volume lines, further closings and diversions should

be judged individually following economic and political scrutiny and only

after the necessary prerequisites had been provided in time. In the longrange plan period, beginning with the 1980's, plans must be drawn up, in

cooperation with the owner-enterprises, to improve the technical and operational standards of the industrial tracks.

On the basis of a thorough examination of the approximately 3,000 kilometers

of trunk lines, to meet domestic demands on some selected sections, a speed

of 120 to 140 kmh, and a speed of at least 160 kmh on some of the international trunk lines should be attained. For this purpose, realignment of

the lines must be improved during roadbed and superstructure reconstructions,

and heavier rails (54 kg, 60 kg) will be needed; up-to-date rail ties must

be used extensively and continuous rails should be used everywhere.

In addition to increasing the speed, travel and freight transportation times

may be greatly reduced (with little investment) by proper organization; by

running (nonstop) direct trains, by increasing train frequency and by expanding the system of shuttle trains. Increased safety and higher speed

on the trunk lines should be attained by using automatic electric block

systems as well as ramps and centralized traffic control. So-called single

traffic control centers and automatic terminals and yards should be used

to modernize yard switching equipment. The modernization of traction and

switching will be completed in 15 years. It is expedient to make decisions

now about the long-range program of electrification and about the priority

of lines.

Proper organizational and technical development methods must be used to solve the

raising of the standard of suburban railroad service in the capital's agglomeration.

In highway transportation, the number of vehicles will continue to increase

at a fast pace and there is going to be a further change in the structure

of highway transportation. The number of passenger cars will increase at

a much greater rate than that of buses and trucks.

We should also expect an increase in the number of foreign vehicles—primarily

in transit traffic and tourism.

The average engine size of motor vehicles will be about 1,200 to 1,300 cubic

centimeters. Specialization of the truck stock will expand and there will

be an increase in the proportions of automotive, heavy duty, self-propelled

transporter-loader (construction industry, agriculture, etc) vehicles. These

factors demand the coordinated development of the highway/road network,

of operating and maintenance standards, and the expansion of the service

industry and spare parts supply.

17
Increased traffic and heavy vehicles will require the continued regulation

of axle loads so that they be in harmony with the load-bearing capacity of

the roads. Current reinforcement requirements on about 15,000 kilometers

of our road network limit axle load to 10 tons. The basic program of highway

transportation development includes the modernization, reinforcement and

widening of the highway network. Implementation of the already prepared

superhighway and highway construction program is necessitated by the increase

in domestic long distance and tourist traffic, and by our integration into

the European highway network. The construction of a beltway around the

capital creating connections between incoming superhighways and highways

is of great importance to reduce traffic congestion in the city. Territorial as well as settlement development demand the drafting and the gradual

implementation of a long-range coordinated program—similarly to the program

of high-speed roads—to build interconnecting roads as well as roads linking

the various settlements, and of council-controlled roads outside inhabited

areas, and of agricultural and forestry service roads.

In order to provide greater safety on the highways, the 1,800 or so level

rail crossings should be equipped with safety devices and the crossings on

heavily traveled roads (a minimum of 25 to 30 in 5-year periods) should be

elevated.

Implementation of the road construction programs demands the expansion of

the capacity of the road-bridge building industry, the stepping up of prefabrication, of new technologies and mechanization.

Beginning with the new plan period, it will be necessary to install automatic

traffic signal control systems on the major arteries of the national road

network where the danger of accidents is great. Thereafter, it will be

necessary to install automatic traffic control on high-speed roads. The

imposition of speed limits will still be necessary to increase highway

safety.

Measures that have already been taken to develop the national bus and truck

stock structure must be kept in force. Aspects of efficiency, energy and

environmental protection will increasingly require the development of proper

operating and maintenance methods.

It will still be necessary to devise and execute a national program for the

coordinated development and modernization of the vehicle stocks of public

transportation enterprises involved in scheduled mass transportation.

In navigation, the putting into operation of the Danube-Main-Rhine-Canal

will substantially stimulate the growth of our river freight traffic.

The currently ongoing canalization projects on the country's waterways (the

Tisza and its tributaries, the Danube and the Drava River) will greatly improve shipping conditions. Suitable programs have been developed to increase freight transportation on the rivers. In the first phase of their

execution the construction and expansion of existing public and industrial

18
port facilities must be solved. The continued expansion of tonnage capacity

and increasing modern self-propelled and tugboat shipping is included in the

aims of ship stock expansion. Trade-policy decisions will continue to influence the expansion and development of the deep sea ship stock.

In aviation, the key is the modernization and expansion of Ferihegy Airport,

which is now in progress, to meet international air-traffic requirements.

The program, executed in three stages, includes the modernization of its

technical, safety and passenger facilities, its link with the center of the

city and the setting up of a terminal in the center of the city. The task

of our aviation industry is to handle medium-range international passenger

flights and our airplane park should be adjusted accordingly. The growing

number of supersonic and intercontinental flights—as far as can be seen—

will not affect our country directly, nevertheless, we will have to provide

flight connections to the European airports that are able to handle such

planes.

Pipeline Transportation

The share of pipeline transportation will increase from the current 8.5

percent to 20 percent by the turn of the century.

In the long-run, the transportation of hydrocarbons can only be solved

through the use of pipelines.

Petroleum products, fuels and low-viscosity fuels move almost exclusively

in pipelines to distribution points.

Fifty to 60 percent of the imported petroleum may come from the Soviet Union

(25 to 30 million Mp/year), or from the Adriatic Sea—40 to 50 percent—

(25 to 20 million Mp [expansion unknown]/year).

According to estimates, the pipelines will handle about 12 million tkm

domestic and 5 billion tkm petroleum in transit by the year 2000.

The annual volume of petroleum products shipped through the pipelines is

estimated at billion tkm [kilometer tons].

Natural gas imports are expected to be about 30 billion cubic meters per

year, half of which would come from the Soviet Union and the other half

from the Adriatic Sea. In addition to domestic needs, we can expect the

transit of about 10 billion cubic meters of natural gas a year, most of

which would be going from the Soviet Union to Yugoslavia and souther Austria.

Pipeline Transportation of Other Materials

The traditional piping of drinking water to settlements will further increase

and there will also be a need to use pipes to link up the individual water

supply systems. The transportation of originally solid materials through

pipelines, waterways or in the air, by air stream, will develop in the coming

decades but not to the extent that it will affect the performance of the other

basic transportation branches.

19
By the year 2000, the length of single-purpose pipeleines built to transport

solid materials will be less than 200 km.

In Hungary, pipeline transportation will be the branch of the transportation

industry whose technical and technological development will be the closest

to the world standard. The application of the most modern equipment and

technologies will be made possible by the relatively late construction

deadlines and by the great performance.

Development of the Industrial and Construction Industrial Infrastructure

of Transportation

Industrial development at home and in the CEMA countries provides the industrial basis for most of the development of the transportation industry.

Most of the traction vehicles of the railroads, and all the bus needs would

come from domestic industry. In the long-range, the domestic production of

trolley-buses may come about if CEMA and other export possibilities are also

considered. Railroad car, truck, airplane and aviation control equipment

needs should be met from CEMA countries. Ship needs are to be met jointly

by the domestic industry and by the industries of the socialist countries

so that units for inland waterway transportation will be provided partly

by the domestic shipbuilding industry and partly by the maintenance shops

of the domestic shipping enterprises. Maritime navigation units would be

provided exclusively from socialist import. Container needs are to be met

almost completely through domestic imports, most of the lifting-transporting

facilities for containers and unit-loads would come from socialist countries,

but a considerable share of these facilities must also come from capitalist

imports.

The domestic supply of railway tracks, rolling stock, the most important

construction materials requires the adequate development of the affected

branches of industry.

In municipal transportation, socialist imports of equipment for subway

trains and of trams will remain a steady trend even for long-range planning.

Rapid-transit motor-train needs can be met partly from socialist imports and

partly from domestic production. The large-scale development of automated

transportation, safety equipment, telecommunication, computer systems requires the continued development of domestic industry and the exploitation

of import possibilities.

Enviornmental protection, power management and increased output, as well as

safe-operating requirements, the development of type groups according to

efficiency will continue to require the meeting of transportation needs

partly through domestic production and partly through industrial-trade

cooperation within CEMA. In addition to meeting the transportation industry's

vehicle and machinery needs, the supply of spare parts and the development

of service facilities will have considerable importance.

Basic material (stone, gravel, bitumen, etc) requirements for the construction of the national highway network and railroad lines will grow considerably

20
and it will necessitate the continued dynamic development of the domestic

construction industry. The use of large-scale industrial production

methods and stepped up mechanization are needed in the transportation

construction industry for increased construction capacity and for the

expansion of technologies. Prefabrication must be further increased and

assembling activity expanded within the transportation construction industry.

No domestic industrial base has developed for the transportation construction

industry. Because of the increased volume of construction projects it is

necessary to develop, as much as possible, the domestic production of

construction machinery and to speed up wide-ranging socialist integration.

In order to provide all the needs of transportation in time, import activity

and the domestic supply distribution system must be further developed.

Power Management Tasks in Technical Development and Transport Organization

Transportation and telecommunications are important energy consumers within

the national economy. Their power requirement is considerable and it is

steadily increasing. The importance of material and energy conservation

demands proper economy in power consumption at all levels and in all areas,

as well as the working out of proper users' guidelines.

Energy efficient assignment of transportation tasks, methods of transportation and fuels are a must. Highly efficient transportation, handling and

office equipment must be used. In developing the network systems and traffic

control which influence transportation energy consumption must be kept in

mind.

Faultless mechanical condition, transportation management and operation

methods which reduce specific energy consumption, computed regulation of

specific power consumption should be guaranteed in operation.

Modernization of railway traction—with the complete elimination of steam

traction—will reach an important stage in the next 5 to 6 years. The

proper selection of the trend in modernization requires transportationpolicy decisions whose effects will determine the economic character of

railway transportation and the proportion of fuel resource usage.

Increased traffic density guarantees a faster return of investment in

electric operation requiring greater input of means but which is also

able to provide greater performance, and which, therefore, encourages the

development of electrification.

Because of the energy crisis in the capitalist world, investment in

electrification was stepped up. It stressed the expansion of electrification in our country. The greater role of the railroads grows parallel

with the growth of electric traction.

In Hungary, steam traction will end in the Fifth and Sixth Five-Year Plan

periods during which first steam locomotives, then obsolete diesel and

electric locomotives will be eliminated in accordance with the pace of :

21
electrification so that the number of diesel locomotives purchased for

the purpose of modernizing traction does not slow down the optimal pace

of electrification. The results of a recent analysis indicated that electric

traction is more advantageous on an additional 1,400 km of MA.V lines than

diesel traction (at present the total length of electrified railroad lines

is 1,200 km)

According to the long-range program of electrification—calling for the

electrification of 350 to 400 kilometers of lines in 5 year periods until

1995—the total of electrified lines will be about 2,600 kilometers. This

will guarantee a unified, economical and modern traction system for about

3,000 km of trunk lines in accordance with the long-range energy usage

structure of the national economy.

It is an important long-range task of highway transportation to influence

the trend of transportation needs.

Efforts must be made to reduce transportation needs and optimal transportation

conditions must be provided. The most economical modes of transportation—

providing favorable energy usage—must be determined through a complex study

of the transportation tasks involved and proper incentives should be applied

for their use. In these studies, total energy needs must be taken into

consideration, including the energy usage of service facilities and of the

elements of the transportation chain.

Urban mass transit development is necessary because of the more favorable

specific energy usage versus performance. This type of transportation must

be made more attractive by increasing its accessibility, speed, and cultural

standard. It is necessary to use new forms of mass transportation, e.g.,

cabs running on fixed routes, car pools, etc, in order to reduce private

passenger car traffic in the cities.

The share of fixed-line electric vehicles should be increased in urban mass

transportation also because of environmental considerations. The study of

vehicles driven electrically or by mixed power sources should be undertaken

in order to see their long-range applicability taking into consideration

engineering possibilities and their infrastructural effects. In the longrange, the possible use of vehicles running on various kinds of special

fuels should also be considered.

Efforts must be made to use more efficient vehicles. In all transportation

fields, efforts must be made to use vehicles of the highest capacity which

may be operated with greater efficiency by using transportation organization,

mechanization of loading/unloading, and by using trailers, etc. In the

operation of private cars where the utilization ratio is small, it is desirable to increase the share of small and 4-stroke engines. This is also

supported by environmental considerations. Efforts must be made—within

the framework of CEMA. cooperation—to increase the share of more efficient

diesel vehicles in freight transportation.

22
It is necessary to have systematic maintenance and maintenance practice in

the entire country to guarantee impeccable mechanical conditions. The

necessary maintenance capacity must be guaranteed in all vehicle sectors.

It is necessary to reconstruct maintenance capacity because of the limited

character of manpower. It is necessary to solve the problem of highstandard maintenance on a large scale. Technologies of consumption control,

repair and adjustment must be centrally solved and made available.

In order to reduce specific energy consumption the great reserves hidden

in proper management must be fully utilized. Organizing of routes on the

enterprise level must be general and the limitations of ownership in setting

up trips must be removed through central action. Establishing of methods

of trip organization should be helped by providing central guiding material.

Driver taining should include the teaching of energy-efficient motor

vehicle operation.

Norm discipline must be strengthened in highway traffic.

Summing up the foregoing and taking into consideration the requirements the

following development priorities must be assured in the 6th Five-Year Plan

period:

—Speeding up the development of railroad lines and junctions, conditions

for the modernization must be assured so that at least 350 km of lines be

modernized every year; special attention must be paid to Budapest, the

development of the transfer district of Zahony must be particularly emphasized; quality and traffic-safety considerations must be fully met

during the modernization of passenger terminals by providing elevated and

wide platforms, underpasses and roofs over the platforms;

—Speeding up of railroad electrification and to achieve it, the electrification of about 350 to 400 km of lines should be completed in the Sixth

Five-Year Plan period;

—Accelerated elimination of dangerous level-crossings of highways and

railroad tracks; development of the (national and council-controlled)

highway networks by coordinating the rate of motorization and the availability

of material means; reduction of serious bottlenecks in urban traffic;

—Continued development of transportation methods on the basis of national

coordination and unified chain of transportation, modernization of mechanization of loading/unloading at the junction points of several modes of

transportation;

—Development of the Budapest-Ferihegy airport for traffic safety and

increased volume of traffic;

—Priority of mass transportation in urban traffic by developing both

traffic management means, primarily in the capital and in the other large

cities; and the solution of parking problems particularly in the hearts of

the cities.

23
The Role and Results of Scientific Research in the Technical Development

of Transportation

About 1,300 people—including 400 scientific researchers—work in our three

research institutions (VATUKI [Railway Scientific Research Institute],

KKTKI [Scientific Research Institute for Highway Transportation] POKI

[Postal Experiment Institute]) and seven enterprise research facilities.

In the current five-year plan period, 2 billion forints are earmarked for

research and development (R & D) purposes of which 57 percent is provided

from enterprise and the rest from central funds.

Transportation and telecommunications development is also assisted by

research projects in the other economic branches (industry, machine

industry, construction industry, etc) and this is of great importance.

The research and development possibilities in the transportation and

telecommunications branches are not less than in the other branches. Both

manpower and expenditures are sufficient to perform research emanating

from the expectations of the national economy and of science policy aims.

It can be seen that in recent years the principles of selectivity and

concentration have prevailed.

In the coordination process, trusts and large enterprises involved in the

application of research results must be given a substantially greater role

in order to increase the efficiency of research and application activity.

The following list gives the most important research and subsequent technical

development results in connection with the railroads, highway and urban

transportation as well as telecommunications and road construction:

Railroad Transportation

Hungarian equipment was developed in connection with the ballast density

testing that substitutes the subballast and ballast edge compactor machines

coming from capitalist import.

Thus, instead of the import machinery costing 5.7 million forints, domestic

machinery may be purchased for 2.3 million forints.

To increase infrastructure, load-capacity parameters for the use of plastic

textile materials were worked out and savings of more than 5 million forints

achieved so far by using plastic fabric in the tests.

Travel safety research resulted in ä

;>16-percent increase in the hauling

capacity of the V43 series locomotives.

With the introduction of principles of operation and train-running methods

developed to reduce the energy consumption of diesel and elctric locomotives

2k
energy worth 10 to 20 million forints, brake shoes and wheel rim materials

worth 4 to 5 million forints can be saved annually.

On the basis of extensive research, recommendations were worked out for the

modernization of the railroad vehicle maintenance system, for engine

diagnosis without disassembling and for a procedure that reduces by 50

percent the run-in time of engines. Due to this research, the capacity

of railroad rolling stock can be generally increased, thus yielding savings

amounting to millions and the pollution by railroads may be reduced.

Several information systems and subsystems were worked out for the introduction of cybernetics in railroad operations, e.g., for keeping records of

breakdowns in traction equipment, for forecasting scheduled repairs and

for the mechanization of dispatching.

On these bases, well-founded decisions can be made at the proper levels to

make operation safer.

Methods and equipment for machine testing of locking frames were worked

out (in cooperation with the Technical University of Budapest) and they

were first used at the Szolnok railway station. Thereby working time was

reduced by 25 percent, in the given case by 5,000 working hours, and the

possibility of human error was eliminated.

Highways Transportation

In order to increase highway safety, the accidents were investigated for

road, vehicles and human factors. The overall lowering of the speed limit

was based on scientific research—even before the introduction of the new

KRESZ [Traffic Regulations for Public Thoroughfares]—and it favorably

influenced the trends in accident statistics. Up-to-date testing equipment

was developed for the tribologic studies of road surfaces; the computer

used with this equipment provides fast evaluation and the sections to be

repaired have already been pinpointed on several important roads.

The requirements for the engineering parameters of commercial vehicles

(buses and trucks) were worked out and standard testing methods were

determined and introduced for the various vehicles. Cybernetic methods

were used to design the car service network and model plans for small

service stations prepared for use in the country. Research relating to

the engineering requirements of service and garage equipment will be

utilized in CEMA.-level production specialization agreements.

Measuring procedures, instruments, adjustment methods and diagnostic

equipment were developed to reduce air pollution caused by motor vehicles.

They make possible the determination and reduction of exhaust fumes. A

standard was worked out for exhaust testing. Due to the application of

research results, the number of cars rejected during official inspections

because of excessive exhaust fell by 15 percent and some conservation of

fuel was also accomplished.

25
Engineering and traffic organization research for the purpose of energy

management in highway transportation led to a 5 to 6 percent reduction of

fuel norms. Consequently, 40,000 tons of fuels were saved in 1976 as

compared to 1975.

Urban Transportation

A guide regulating the process of traffic-development planning was prepared

to modernize the design procedures for urban transportation development plans.

A reference aid containing a collection of traffic-survey methods and

traffic-pattern models was published in connection with urban traffic

forecasting. It allows the use of identical methods for traffic forecasting, the keeping of designing time and cost standards, the preparation

of a variety of designs and their optimalization.

In designated cities, traffic censuses were taken and the data processed.

This provided the basis of urban road network development plans. The

study of urban traffic habits, the investigation of continuous traffic

flow on urban roads—togather with the study of urban traffic-engineering

problems—provide useful methodical assistance for the drafting of urban

traffic-development plans.

Rationality tests performed after traffic-engineering studies provided

basis for decisions about mass-transportation solutions on some important

roads (e.g., Hungaria Blvd). Practical results may be expected from the

research relating to mass-transit management and traffic control, as well

as from research into the optimalization of mass-transit networks.

The traffic census in Budapest was based on interviews and its results are

already available. They will be carried out during the implementation of

the capital's traffic development plan. The theoretical bases and needs of

central traffic control in Budapest were worked out and the possibilities of

computerized traffic-light control examined. Application of such control

is expected in the traffic-control center now in the process of realization.

This center already handles the central dispatching service of the subway.

Road Construction

As a result of research dealing with the use of industrial byproducts for

road construction, four subgrade test sections were built of lime-bonded

granulated blast-furnace cinder and several temporary technical directives

were issued.

The use of industrial byproducts in road construction reduces the cost of

their disposal and moderates bitumen, cement, rubble and gravel needs in

road construction and is also important from the point of view of the

enviornment.

As a result of research into the use of rough-sand asphalt, and after

testing, beginning in 1974, this type of pavement was used gradually on

26
highways Ml, M3 and M7. The respective technical directives will also be

issued. The new type of pavement increases skid resistance and thus

traffic safety; the danger of accidents diminishes.

A traffic census of a cross-sectional nature was taken on the national

highways to provide a basis for the development plans of the road network.

Automatic counters were also used in the census. This research and the

previously undertaken destination survey provided the foundations for the

overall national road-development plan.

After research, several standards were issued for the testing of roadbuilding materials (laboratory tests for soil stabilization, tests for

soil compactness, etc). A new method was worked out and is applied to

measure the load capacity of roads.

Porous road concrete technology was worked out, among others, in connection

with the development of asphalt and concrete road structural technologies,

and it was introduced on highway M7 and the construction technology of deep

asphalt layers was developed and used on highway No. 4. Test sections with

various roughened wear layers were built on highway No 5.

The results of research relating to welded steel bridge structures are included in the highway bridge regulations. The testing method of stressed

bolted joints was expanded and precision registration of creep at the side

of test specimens introduced. Joints of prefabricated elements could be

simplified after studying the behavior of joints during static and fatigue

stresses of prefabricated concrete bridge structures. They are included in

the engineering regulations.

Environmental Protection

The exhaust limt for diesel vahicles was worked out and put in effect in

the new KRESZ.

As a result of research, an exhaust-testing instrument suitable for plant

and highway traffic control was developed and produced in the country.

The booklet titled: "Exhaust Measurement of Diesel Engines and Diesel Engine

Vehicles. Requirements. Testing Methods" was published.

A gas-analyzing laboratory meeting the first EEC [Economic Commission for

Europe] requirements was completed and put into operation.

A mobile instrument complex was built for test-pad evaluation of gasoline

and diesel engines.

Adjustment procedure was worked out to reduce exhaust emission to the

required level.

A proposal was submitted to build the most efficient dust precipitor into

the asphalt mixer.

27
Research into the lowering of the noise level of the M-62 type diesel

locomotive led the Soviet exporter to deliver the locomotives with

silencers and the already operating locomotives were subsequently

equipped with silencers.

Research into the cleaning and treatment of oily waste waters of railroad

traction facilities led to the solution of local waste-water treatment

problems at several installations.

2228

CSO: 2500

28
HUNGARY

IMPROVEMENT OF TOURIST FACILITIES URGED

Budapest FIGYELO in Hungarian No 37, 13 Sep 78 pp 1, 2

[Article by Zsuzsa Gal: "The Drawbacks of Recordbreaking"]

[Text] "Campsite For Rent"—this surprisingly novel invitation could be

seen on the gate of quite a few summer cottages on Lake Balaton this summer,

sometimes written in several languages. And to prove that the supply satisfies a real demand, some gardens were packed with rows of big and small tents

while cars from many countries and regions lined the streets.

Thus, owners of summer cottages at Lake Balaton rented out open space by the

square foot this year in addition to renting their rooms, which in itself

gives an idea of the dubious records of our 1978 tourist traffic. Even

without statistics it demonstrates that our capacity to receive tourists is

far below existing demand. At the same time it provides some explanation,

together with other factors, as to why currency earnings of the state did

not grow in proportion to the number of visitors; it also serves as a warning that tourism contributes to widening income differences among various

groups of the domestic population.

All Sold Out

To the superficial observer it might seem as if this year brought some kind

of an explosion of our active tourism but this is not what the numbers indicate. According to the preliminary report the number of foreign tourists

during the first 7 months of 1978 increased by 29 percent relative to the

same period last year. However, when we look at the reports of the OIT

[National Council on Tourism] for last year we are in for a surprise: the

increase in the number of tourists during the first 7 months of 1977 relative

to the January-July period in 1976 was greater, not smaller, reaching 15

percent. It is true that the time spent here by tourists, i.e., the number

of visitor-nights increased by 34 percent this year, compared to 21 percent

last year. The sense of an explosion is in fact due to the combined strong

growth of 2 successive years, i.e., the fact that this year's increase accumulated on top of a similarly strong increase last year.

29
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In addition, several new hotels were completed last year and a series of

hotels were built during previous years. There was not a single hotel completed in 1978 which could be considered in terms of foreign tourism. Other

investments serving tourism have also slowed down, e.g., the development of

the network of shops and restaurants at Lake Balaton.

To return to the phenomena mentioned in the introduction: the contrast between the sharp increase of visitors and the slowdown of investments (which,

as we shall see later, is probably only temporary) is softened by the private

sector. Those who rent out their rooms and gardens naturally provide other

services to their guests and, as a result, the tourists can somehow obtain

those services, but part of the income from tourism is not centralized by

the state and therefore it cannot be spent on needed imports for the national

economy.

Those who rent out their apartments and summer cottages through tourist offices and travel agencies are contributing to state income. But they are

in the minority. According to the testimony of the statistics, foreign

tourists spend 60-65 percent of the nights in our country at "location unknown." Which means that they spend the night not in commercial accommodations (including organized and official guest rooms in private apartments)

but in the homes of relatives, acquaintances or possibly strangers.

If we add that this is not simply a matter of the tourists' intentions but

is also caused by high utilization and overcrowding of hotels, campsites

and rooms for rent, then it becomes obvious that vigorous prosecution of

so-called illegal room rentals would be a mistake. We must accept that

this activity by the population replaces investments, and we must try to

make it more organized.

Desolate Campsites Along the Road

It is quite clear that commercial accommodations (the country has a total

of 200,000 beds, half of which are provided by official guest rooms) combined with those who rent out their rooms, beds and gardens were still

unabie to put up all of the guests. It is clear because at Lake Balaton

as well as in the Dunakanyar and the vicinity of the capital there was a

proliferation of desolute campsites exceeding anything seen in previous

years. This phenomenon came close to presenting a danger of epidemics and

it deprived the country of additional income. Although local tourist

authorities were quick to set up so-called emergency campsites (in most

cases a beach area was fenced off and supplied with guards and lighting

so that camping and personal hygiene became possible), but even those did

not have enough space for everybody.

(In order to avoid having to set up emergency campsites with similar haste

next year, work was started on a study to explore the possibilities of

creating 14 campsites at Lake Balaton. The investment program will be

ready by the end of October).

31
However, we possess reserve capacities which we have been unable to fully

utilize for many years. They are the dormitories of schools, colleges and

universities with a combined capacity of 40,000 guests, i.e., 20 percent of

beds available commercially. According to the experts, only about 20,000

beds out of the 40,000 are suitable for purposes of tourism, but even among

these, thousands are empty at the same time tourists can find no accommodations and are forced to spend the night in the parks.

Should we blame those responsible for developing our tourist capacity for

the situation this year? Considering the medium range plan for the national

economy, we probably should not: preliminary calculations foresaw the arrival of 12.5 million foreigners by 1980, which is exactly the number of visitors

that have crossed our frontiers last year. (The total for this year will

probably exceed 16 million). If the question is considered from the standpoint of available money and construction capacity then there is even less

justification for disapproval. (It makes you think, however, when the state

and state enterprises lack money, resources and building capacity to build

hotels while citizens of that state, or rather some citizens can afford and

have the money, opportunity and construction capacity to build even multistory villas.) The interests of enterprises did not particularly work in

favor of hotel construction, at least not on the shore of Lake Balaton:

seasonal hotels give a slow return on investment because of the short summeer

season.

Turnover and Income

It is also difficult to decide one of the basic questions of development

projects, i.e., how economic is our active tourism. This is a difficult

economic nut to crack not only because tourism is connected with many areas

from transportation to management of water resources, but also because our

complicated taxation and subsidy system makes it exceedingly difficult to

figure out the real value of resources allocated. In other words, there is

no suitable formula to calculate the profitability of tourism.

Despite that, there is no doubt that our capacity for tourist accommodation

must be increased. This is dictated by our policy of openness and our goal

of providing an opportunity for anyone interested in learning about Hungary.

In addition, we are forced to develop by the sharp increase in the number

of visitors, despite the fact that on a European scale we are about average

with respect to tourist attractions. This rate has recently exceeded

European and world averages by a substantial margin according to data from

the World Tourism Organization (WTO):

Number .of foreign tourists (million persons)

1966 1977 Index (1977/66)

Total in all countries

Of this, in Europe

Of this, in Hungary

32

130.6 238.2 182

97.4 169.0 174

2.4 7.2 300
However, tourists visiting our country spend substantially less than those

visiting other countries in Europe. The average daily expenses of tourists

visiting Hungary were only $15.5, while, according to 1974 data, daily

tourist spending was $31 in Austria, $43 in Greece, $46 in Holland, $30

in Italy, $41 in Switzerland and $24 in Yugoslavia.

The latest data indicate that the situation in this regard is deteriorating

rather than improving, and the growth of our income from tourism is not

keeping pace with the growth in the number of tourists. During the first

7 months of 1978 receipts from tourism increased only 21 percent, in contrast to a 29-percent increase in the number of tourists and a 12-percent

rise in border crossings.

At the same time, according to research by the Domestic Trade Research Institute, tourism produces dollars at a cost less than any other branch of

the national economy, the average cost being 30 forints. The productivity

level of our hotels is no worse than in other countries, and there are no

productivity differences such as those in the area of machine industry.

In addition, the mere fact that we are obtaining currency which can be used

to buy technical equipment without having to supply goods in return is undoubtedly advantageous. According to raw calculations, tourism from friendly

nations is no worse a deal than exporting goods to the same countries. Thus,

despite any uncertainty, it is certain that the "export" of tourist services

is more profitable from a currency production standpoint than the export of

goods in general.

Thus, the question is not whether the tourist capacity of the country should

be developed, but rather, in what areas, with what types of investments, on

what level?

Development in Budapest and in the Provinces

Insofar as territorial distribution is concerned, the demand is concentrated

in Budapest and the shores of Lake Balaton. However, while hotels are full

almost the entire year, the season at Lake Balaton is short, as everyone

knows. Thus, while the investment costs of a Budapest hotel are recovered

in 8 to 9 years on the average, the Ministry of Domestic Trade estimates,

in the light of the present distortion-free economic regulations, that it

takes 25 to 35 years to recover investment costs of a season hotel at Lake

Balaton. On the lakeshore there is a need to institute preseason and postseason prices and price reductions and even with these hotel rooms with two

beds and a bathroom stay empty in May and September, sometimes at prices as

low as 120 forints. In Budapest it is possible to keep all hotel rooms filled

at the full price for 8 to 10 months per year.

Since the limitations on our investment capability are well known, the capital should be given preference; at Lake Balaton it seems reasonable to build

only simpler hotels, campgrounds and bungalow complexes, in addition to

health resorts. This is supported by the financial ability of our guests.

33
Several areas of the country featuring mineral waters or other tourist

attractions, especially in Western Dunantul also deserve development. This

year there have been substantial numbers of Austrian guests here, and next

year the possibility of entry with no visa requirements will almost certainly

increase the attraction of the regions near the Austrian border.

Hotel construction plans are at this point rather tentative. There has

been no decision as yet on the use of $300 million credit line available to

us within the framework of Hungarian-Austrian economic cooperation; since

the loan is intended to serve tourism, we can expect a significant acceleration of investments.

Aside from that, there are two hotels being built in the country at the

present time: the Arpad in Tatabanya and the Thermal on Margitsziget.

According to plans, the Expo will open in Budapest during 1980 and the

Stadion, also in Budapest, will open in 1981. Two large hotels with a

total of 1,300 to 1,500 beds to be built on the Pest bank of the Danube

are in the preparatory planning stage.

A .so-called accelerated development program for the expansion of the network

of restaurants and shops at Lake Balaton has been worked out in the Ministry

of Domestic Trade. In 2 years they propose to construct 20 to 25 food stores

and self-service restaurants on the south and north shores of the lake using

light structural elements. In view of the fact that the average floor space

of these establishments is only 120 to 180 square meters this program can

merely provide quick relief which may improve the supply of tourists without solving the problem.

It would be mistaken, however, to limit the development of tourist capacity

to the construction of restaurants and stores. The fact that one-third to

one-half of foreigners visiting Hungary as tourists spent the same amount

as those visiting Western or Southern Europe is due, among other factors,

to the lack of opportunity to spend money on anything other than lodging

and food. To mention the simplest examples, there are just two or three

locations at Lake Balaton where sailboats may be rented, there is not much

opportunity to play tennis, and even in the biggest hotels the bulletin

boards seldom feature program proposals. Swimming pools at hotels are

lacking and there is a shortage of game halls where the guests are entertained by slot machines.

The Spirit of Tourists

We have to provide more and better service. At present many visitors are

deterred or at least discouraged from another visit by the discourteousness,

inexperience or, possibly, the profiteering and mercenary attitude shown by

service personnel. People who are cheated by the headwaiter, are served in

a leisurely manner by an employee of Intourist, insulted by the hotel desk

clerk, rebuked by the store clerk and sent to a previously filled room by

the clerk at the guest room rental office, are unlikely to spread favorable

3^
information about us upon their return home. Word-of-mouth propaganda is

at least as effective as expensive official tourist propaganda.

By the way, the latter could also stand some improvement. Our brochures

intended for foreign distribution often contain incorrect or imprecise

information, do not present features which, may attract potential visitors,

and sometimes do not even reach the addressee and become obsolete hidden

in an office drawer. We also have problems with regard to traffic information. Road signs are scanty and difficult to follow, and visitors arriving in Budapest cannot obtain a city map (because there is no such map)

showing one-way streets. We must be aware of the fact that such trifles,

seemingly insignificant in themselves, may have a strong influence on the

disposition of tourists.

The occasional bad impressions may possibly turn out to be useful in a certain sense, at least for the moment. Already in the introduction we said

that the tourist records achieved this year were of dubious value; it is

an open question whether any useful purpose is served by receiving more

visitors than we can serve. From this standpoint we might also say it does

not matter if the number of visitors does not increase any further next year.

However, low quality or deficient service leads to a negative screening

effect: we deter the more demanding visitors who are willing to spend more

and arrive for their vacation, instead of those who perhaps came only to buy

cheaply in our country.

The Two Sides of the Movement of Goods.

The latter phenomenon (i.e., the "tourist export" of subsidized goods and

services) worries many people especially since the end of compulsory currency exchange. In the fall following the first such tourist season we

can state that purchases by tourists did hot cause shortages.

The effect of tourism-related movement of goods on the economic benefits

of tourism is a different question. Jozsef Berenyi wrote a remarkable

article on this subject in the 1978 issue of the KERESKEDELMI SZEMLE. He

starts from the fact that 12.5 million foreigners visited Hungary in 1977,

which implies 25 million frontier crossings. "Each time foreigners had

the opportunity to import or export goods," says the author. "If we assume

an average of 1,000 forints worth of goods for frontier crossing then this

implies the movement of goods valued at 20 to 25 billion forints in a year.

This movement of goods calculated on the basis of a conservative estimate

is quite significant, amounting to 4 to 5 percent of the national income

and 42 to 53 percent of the import of consumer articles calculated at current prices."

Afterwards he states that tourism-related movement of goods is unfavorable

to Hungary with regard to those countries where there is a shortage of goods

compared to Hungary, and also ones where the price of articles subsidized

here is relatively high.

35
Of course, tourism-related movement of goods is going in both directions:

the tourist pays for goods and services in one way or another, i^ith money,

goods or similar services in his own country. The latter is called exchange vacation when carried out in an organized form between institutions

or enterprises. When private parties invite one another for mutual visits

then we are in fact saving currency on travel abroad by Hungarian citizens.

The situation is analogous when goods (or, if you prefer, presents) are exchanged between private parties and in cases where foreigners use goods to

pay for services (lodging and food): in the final analysis, the consumption

base of the population will increase.

The article quoted earlier notes: "The chief drawback of the tourismrelated movement of goods is that it adds uncertainty to plans relating

to the supply of goods and the distribution of income; on the positive side,

it provides a spontaneous correction of supply bottlenecks and improves the

income situation of the population. Whether the result of positive and

negative factors will be positive or negative will depend on volume and on

the competence of economic direction and influence."

In any case, the principal characteristics of tourism may be influenced much

more simply (albeit, possibly at a greater cost) than those of the movement

of goods. The necessity of influencing those is demonstrated by the fact

that at present only 35 to 40 percent of tourists can utilize commercially

available lodging and the percentage of those using the meager services of

the socialist sector is unlikely to be higher. As a natural consequence of

this, the currency earnings of the state can increase only very slowly.

The interests of the national economy demand that tourism be centrally

organized through state channels and thereby become more profitable. However, this goal can be approached only by accelerating investments serving

tourism, widening the scale of available services and improving their quality.

9164

CSO: 2500

36
HUNGARY

PLANS, PROJECTS, ACHIEVEMENTS OF ALUMINUM INDUSTRY HIGHLIGHTED

Budapest FIGYELO in Hungarian 23 Aug 78 p 5

[Article by Istvan Fodor: "From Bauxite To Finished Merchandise"]

[Text] In recent decades the aluminum industry was one of the fastest developing industrial branches. According to data which show the development

of world-wide production, its growth averaged one and a half times to twice

that of the rate of industrial growth. The central development program

which serves the domestic aluminum industry's coordinated growth, was approved

in 1970. However, significant changes have taken place already during the

time period of the Fourth Five-Year Plan. Due to the lack of investment resources, primarily those developments were omitted which would have increased

the extent of processing and the amount of export.

New Situation

The world economic conditions have also undergone fundamental changes, the

market situations of aluminum industry products have sharply improved. While

the world market prices of the most basic materials fluctuated widely and

fell off significantly in recent years (examples: copper, steel), the price

of aluminum decreased only temporarily even in the recession period, but in

recent times it has again greatly increased. Thus, sales of aluminum industrial raw materials and semifinished products to capitalist countries have

produced significant advantages for the people's economy also, even though

in the meanwhile costs have also gone up sharply.

Export Pr Lees

$/t on Index

1972 1977 1977/1972

Alumina 75 136 181

Aluminum 400 981 245

Semifinished Goods 558 1,425 255

Ruble prices and costs—according to CEMA's 5-year price basis—follow the

lasting tendency, though with some delay.

37
(in 1 ,000 tons)

3,050 3,305 3,305

790 900 900

72* 140* 205*

166 240 273

Because of the changed conditions, the central development program was modified, and supplemented. In 1976 the Council of Ministers approved those improvements of the aluminum industry's new central development program which

deal with the time period between 1976 and 1980, and accepted the goals for

after 1980 as basis for long-range planning. The main production projections

of the program's so-called basic form—the goal of which is to build 100,000

tons of aluminum smelting capacity and to reconstruct the existing smelters

druing the time period of the Sixth Five-Year Plan—, are:

1980 1985 1990

Bauxite

Alumina

Aluminum

Semifinished goods

* Additional 182,000 tons annually through the agreements

Based on the resolution, research directed at further increasing the aluminum

resources must be continued, as must be the development of the optimum structure of domestic bauxite production, alumina production, aluminum metallurgy

and production of semifinished goods, taking into consideration also the

possibilities of improving the international cooperation.

The situation, the development of technological-economic, production and

sales circumstances of the aluminum industry vertical's branches can be

summarized in the following:

—In the time period of the Fourth Five-Year Plan, the bauxite reserves did

not decrease, due to the results of geological research projects. During the

time period of the Fifth Five-Year Plan, the performance of geological research drillings will double. The changes in world economy have further significantly increased the value of Hungarian mineral wealth and the amount

which can be economically processed. Currently discovered and expected inventory will cover the demand for about 40 to 44 years; we possess bauxite

reserves which are significant even by European standards.

—Our production of alumina grew at a rapid rate (in harmony with the international agreements), and the technology of production meets world-wide

standards. We have also begun to export know-how and factories, and today

this constitutes a reference point in further international negotiations.

—Aluminum metallurgy did not develop (also in accordance with the international agreements). Our smelters, built 25 to 40 years ago, have become

worn out, are obsolete both from the health protection and labor protection

38
viewpoints, their reconstruction is unavoidable. With the increase of metal

import obtained from the Hungarian-Soviet alumina-aluminum agreement, the

per capita domestic aluminum consumption has reached the level of advanced

countries (13 kg). But the qualitative level of consumption is lagging behind that of the leaders. In 1980, we will recover only 45 percent of the

recoverable aluminum content of the bauxite which will then be produced.

The international agreements amount to 32 percent of this, and domestic production to 13 percent.

—The aluminum industry's products can be profitably sold on various markets,

in large volume. The ratio of aluminum raw material to semifinished goods in

our export to capitalist countries has for years been about 5 percent, but in

1977 this was 7 percent approximately. The proper product structure of semifinished goods will be developed only for the second half of the Sixth FiveYear Plan's time period. The semifinished goods satisfy primarily the domestic

requirements. Exportable consumer goods have also not been developed in the

production of finished products.

—Significant shortage of metals must be expected (unless the resources increase) during the time period of the Sixth and Seventh Five-Year Plans. As

a consequence of this, we would lose significant export values to the capitalist countries, and what is even more, we might even need to rely on significant imports from the capitalist countries.

Strategically, escalation of verticality [i.e., vertical integration] and

increase in the processing levels are important tasks of the Hungarian aluminum industry's long range development. The realization of selectivity and

of the efficiency requirements necessitates that the ratio of processed goods

be increased at as high a rate as possible, naturally taking into consideration also the investment requirements and profitability of the developments.

The following will illustrate that today 55 to 70 percent of the reserves are

still unexploited in the vertical lines of partial integration following the

alumina [stage]:

Production value which can

be created by further processing of bauxite

In the time periods of the

Sixth Seventh

Five-Year Plan Five-Year Plan

(in billion dollars, on

prognosticated prices)

in alumina

in aluminum

in semifinished goods

in foil and castings

in finished products

1.0

3.9

6.8

9.6

13.7

1.6

5.4

9.7

13.5

18.9

39
Demand and Tasks

The developments projected in the central development program will by 1990

insure 80 percent utilization in alumina, 55 percent in aluminum (including

the agreements and the new smelter), and about 45-52 percent in semifinished

products, castings and foils and in finished products, of the above opportunities .

Beginning with 1981, alumina production will essentially reach the 900,000-

ton annual level projected in the program. Without building new factories

but by intensifying the existing alumina plants, the opportunity will open up

to obtain additional capacity, which will

—make it economically possible to use the large quantity but poor quality

bauxites;

—by dissolving the narrow technological cross-sections [i.e., bottlenecks],

improve the overall efficiency of the production phase [there is no need for

additional manpower, investment is minimal compared to the yield).

The production increment during the time periods of the Sixth and Seventh

Five-Year Plans will be about 750,000 tons of alumina, the value of which can

be estimated at about $200 million. The aluminum content of this which can

be extracted is about 400,000 tons, which may form the foundations for further

increasing [our] metal resources and for higher degree of processing.

An important part and a prerequisite for creating a higher level of production

in improving the structure of the aluminum industry during the time period of

the Sixth Five-Year Plan is the prompt elimination of the bottlenecks in

aluminum production.

It makes expansion of the aluminum metal resources particularly urgent that

by carrying out the Hungarian-Soviet agreement currently in effect, the metal

resources which have been thus far expanding steadily by the average annual

rate of 10,000 to 15,000 tons, will reach their maximum in 1980. Its volume

will no longer increase between 1980 and 1985, and the Hungarian-Polish

aluminum agreement runs only through 1980.

The long-range growth of domestic aluminum consumption is dynamic, and it will

increase from the present 140,000 tons to over 300,000 tons by 1990. In contrast with this, our primary metal resources will be unchanged from 1980 on—

assuming the present conditions—about 250,000 tons annually.

Three Possibilities

The possible ways of expanding our metal resources and higher degree of utilization of our mineral inventories are:

—to accomplish as soon as possible, the 100,000-ton capacity domestic aluminum smelter and the necessary reconstructions projected in the central development program;

ko
—Besides renewing the Hungarian-Soviet smelter agreement, it should be

expanded.

—The expansion of the Soviet agreement together with the projected improvement of domestic capacity.

The following [reasons], besides the structure policy viewpoints, justify

domestic expansion of the aluminum producing capacity:

—within a short time, it will create the foundations for a lasting, economical and secure metal source, which is the basis of the development of further

processing;

—a precondition for more significant metal production without interruption

is the inevitable reconstruction of the three operating smelters;

—it makes possible the further broadening of know-how export and of general

contracting factories for export;

—it makes possible for the people's democracy to make use of significant

external resources in an advantageous manner, and to pay these back.

The central development program projects the commencement of the smelter investment for 1981, thus the plant would produce its first metal in 1984.

But this, while terminating imports from the capitalist countries, would still

not make it possible to avoid the decline of exports earlier in the time

period of the Sixth Five-Year Plan. Building up capacity earlier would provide the means to avoid this.

The investment could also be accomplished in such a way that it would contribute to the improvement of the people's economy's foreign trade balance.

Several foreign firms and banks have shown willingness to extend long-term

loans for this goal, which could be paid back by various aluminum products.

The projected domestic increase of aluminum production capacity together with

the expansion of the Hungarian-Soviet aluminum agreement would make it possible to create a favorable structure for the aluminum industry. This development would create the favorable basis for further processing of the alumina

sold, to use it efficiently, to fulfill the metal requirements of a more distant time period, for the selective development of the production of semifinished and finished products and for the dynamic expansion of the dollaraccounting export.

Alumina supply is also available for the realization of domestic smelter development and for the expansion of the agreement together. Taking the proposed intensifications into consideration, our alumina production provides

coverage for a total of about 520,000 tons of metal production annually.

Significant additional alumina can also be obtained from the developing

countries as payment for factories we export.

in
Several years ago our aluminum industry became involved in opening up and

processing the Yugoslav bauxite inventory, by delivering know-how and exporting factories in the value of about $50 million. Similarly, it also

participates in developing the mining and alumina production industries of

developing countries which have about one-half of the world's bauxite inventory. We know well [the location of] the bauxite deposits, their regional

distribution and the development methods. Based on the experiences of alumina plants built abroad (in India, Romania, Yugoslavia), advanced negotiation

is currently in progress with the aluminum industries of Jamaica, Greece and

India, for cooperative construction of alumina plants.

In the future it will be an important task to seek out such foreign partners

who would also contribute financial resources to build up production of products of advanced degrees of processing based on the most modern technologies,

and at the same time would also assure long-range export markets. Several

partners have indicated willingness not only for cooperation in metallurgy,

but also for building up capacities for semifinished and finished goods, and

also for the sale of products. The Hungarian Aluminum Industry Trust and the

authorized foreign trade enterprises have recently made significant cooperative agreements with the U.S. firm, Advanced Pressure Castings. According to

the contract, the opportunity is open for the production of 2,700 tons of

high value, high pressure finished aluminum castings annually. The American

partner has agreed to provide the technology for this, and to accept the

products for 10 years. This undertaking will result in exports of about

$9 million annually. All this shows that the opportunities hidden in international cooperation can be exploited efficiently for the purpose of selective

development, in technological, economic and also even in financial areas.

8584

CSO: 2500

k2
HUNGARY

POSSIBILITIES OF INCREASING FOOD INDUSTRY EXPORTS EXPLORED

Budapest FIGYELO in Hungarian 23 Aug 78 p 11

[Article by Dr Istvan Katona: "Development Possibilities to Expand Exports"]

[Text] Additional loan possibilities have opened up to provide incentives

for making investments to serve the expansion of the stock of export goods.

However, it is true that the loan possibilities and preferences to provide

export incentives can be made use of only under conditions which are significantly more strict than usual. When extending credit, besides examining

rapid repayment from the net foreign currency it would produce, the maximal

resources of the enterprise, and favorable profit ratio are considered and

of primary consideration, if possible, are that the investments should still

contribute in the current five-year plan to the improvement of the payment

balance and should insure further expansion of the export merchandise stock

for the time period of the Sixth Five-Year Plan.

Six Months Behind Schedule

One-third of the 45 billion forint credit budget was assigned to foodstuffs

production. The development and investment costs distribute roughly equally

between agriculture—including forestry—and the food industry, but agriculture only received 40 percent of the loans.

The ratio of credit extended for the improvement of the export merchandise

stocks is also significantly lower in agriculture than that of the people's

economy's average. But the producer cooperatives and the state farms strive

to obtain the not insignificant advantages accompanying the export development loans even at the cost of placing greater burdens upon their own development resources.

The general experience in foodstuff production is that the foreign currency

production index and its profit in ratio to investments of the developments

financed at the expense of convertible credit contingencies is better than

average. This is particularly so in agriculture, where the foreign currency

production index of developments which expand the export merchandise stock—

with not too large a deviation—is 22 to 26 Ft [forints] per dollar,

i6
investment-proportional profit is 15-16 percent. These represent 30 to 35

percent better foreign currency output than the average, and about 10 higher

investment-proportional profits. The foreign currency production index is

also better in the food industry, and the investment-proportional profit is

the same as the sector's average. Development of the indices proves that

earlier expectation to be correct that the loans which are accompanied

by significant advantages, together with strict conditions, do urge changes

in the product structure and improvements in exporting ability.

$100 Million Surplus

Most of the export improving investments in agriculture are smaller in volume,

are carried out rapidly and will result in additional merchandise base still

during the current 5-year plan. The bank extended loans in plant growing for

the most part for machinery purchases and for the construction of some storage

facilities, while in raising animals—apart from one or two new operations—

[the bank] extended loans for reconstructive developments, for expanding the

export merchandise base and to improve exports. It is also characteristic

that the share of construction in the investments is minimal. Last year, the

loan contracts required completion of 296 investment projects in the producer

cooperatives and state farms. Completion of only 15 of these investments

dragged out over into 1978. Of the late investments, the bank provided loans

for the purchase of machinery in five of them. In 10 cases, for developments

which included significant ratios of construction (storage facilities, buildings for raising animals). Average lateness does not exceed 6 months. But

in the food industry, within the material-technological composition the ratio

of construction is not lower than the industrial average, and the lateness in

completing the job is also more frequent.

The export-improving investments carried out within the framework of the plant

growing systems have proven to be more efficient investments in accordance

with the people's economy's needs than the ones accomplished from the sector's

own resources. The financial opportunities provided by construction financed

by loans fulfill significant roles in increasing corn and wheat yields.

There have been more problems in the investments of tree farms and specialized

agricultural enterprises, where in some cases, full completion of the investment was as much as 2 years behind schedule. Even though the investing

parties try to minimize the lateness of the additional export merchandise

base with other products or by extra production in the existing plants, in

justified cases the sanctions and financial consequences specified in the

loan contracts cannot be dispensed with.

In the food industry, where construction! ratio is relatively high, and where

often optimum conditions were taken into consideration in the preparation of

investments, late completions are more frequent.

In this respect, it may serve as a solution if the investors built up close

relationships—even ones built upon joint interests—with the foreign trade

kh
enterprises, in the interest of having the machinery and technologies purchased from abroad arrive on time.

In food production, in spite of the greater or lesser delays occurring in the

investment processes, the enterprises and cooperatives are for the most part

able to fulfill the obligations they have accepted. Production capacities

created with the aid of loans for the expansion of the export merchandise

base produced about $45 million worth of excess export merchandise base in

1976, and around $100 million in 1977. The value of the added export merchandise base expected for 1978 will be close to $200 million. In agriculture and in the food industry together, the gross added export (import

savings) expected from these investments was completed in 90 percent on the

average in the years of 1976 through 1978. The developments accomplished in

state-operated and in cooperative agriculture (we are speaking of more than

700 development projects) provided more merchandise basis in every year than

what they had promised in the loan contracts.

Overfulfillment and Falling Short

The 40 development projects investigated in the food industry, the loans for

which were partially or wholly made at the cost of the convertible loan contingencies, achieved less added export (or import savings) than they pledged

in the loan contracts. The deficiency—due mainly to the world market price

changes—occurred mostly at the dairy industry's import saving investments.

Of the 10 investments made in the meat industry, 6 have export obligations

by 1978. The general experience is that these developments fit well into

the improving business opportunities. About 15-20 percent more additional

export was realized than pledged during the three years. Results of the developments in the alcohol industry are similarly favorable.

The natural results of development projects in agriculture must also be mentioned. Partly because those who requested loans here, pledge for the most

part not additional export, but production of additional export merchandise

base in the loan contracts; partly because the supply which is expected to

continue to grow by 1980, will have to be accepted by the related food industry for processing, and possibly additional foreign market opportunities

will also have to be sought.

Realization of Loan Contracts Made for Additional Export Merchandise Base

(in tons)

Corn

Wheat

Sunflower

Soya

Pork

Poultry

in 1976 in 1977

According According

to contract Actual to contract Actual

59,155 69,934 69,175 198,595

68,686 122,057 146,053 287,182

2,754 3,749 13,446 21,941

1,138 1,109 1,994 2,875

918 1,399

365 269 1,004 829

^5
But in summary, besides the good results the problems must also be mentioned.

Often, in many cases we find cases of falling short which can be traced back

to objective reasons (for example, hail damage, flood, ground water, etc.)

which decrease the results, and the exporting ability along with it.

Last year, for example, 270 state farms and producer cooperatives had contract

obligations for corn production. Actual fulfillment exceeds the plan by about

30,000 tons. But within this, half of the farms did not reach the pledged

increment, and what is even more, 60 operations did not fulfill it at all.

The shortage at these is about 50,000 tons. For wheat, 300 farms achieved

287,000 tons instead of the 146,000 tons pledged. The number of overfulfilled is 100} that of the ones falling short is 60. (Total shortage is

22,000 tons.)

In 1977, a total of 548 agricultural operations had obligations to produce

additional merchandise base, and of these, there were shortages in one or more

products at 180 operations. In the future more attention will have to be paid

already when the loan is decided upon, and also during the process of implementing it, that the number of "non-fulfillers," and through this, the number

of those who diminish the total results of the invested loan means, be

decreased.

Uncertainty Factors

Experiences of the first 2 years of the Fifth 5-Year Plan show that expansion

of the convertible export merchandise base has worked out well overall in the

production of foodstuffs, and fulfilled the moderate advance expectations

even though the experience was not favorable in each case. This opportunity

contributed to a great extent that even such development ideas of greater or

lesser impact could be placed on the agenda which could be carried out in

short order and produced additional export goods base already in the current

5-year plan. Such were for example the better mechanization of plant growing, developments related to the production of flowers, honey, mutton and

rabbit meat, but developments of reconstructive character in the hog raising

operations, or for example the investments carried out in the alcohol and

meat industries can also be listed here.

A general problem is that implementation of the developments is behind

schedule particularly where the ratio of construction is high, but also even

in many cases in the purchase of simple machinery. In such cases the bank

is placed in a difficult situation when it requests an accounting of the loan

conditions. The slowness of construction, lack of punctuality in the arrival

of imports are today so broadly "known" uncertainty factors that those have to

accept the risk for these who make use of the loans.

The so-called compensation must also be mentioned. It happens frequently that

the operations do not fulfill their sales obligations to certain products

specified in the loan contract, and wish to substitute other products for it.

Keeping in mind the question of the people's economy's balance also, it would

not be correct to deviate from the basic principle that the additional export

goods base must be produced and sold in that product for the expansion of

which the loan was taken out. It is a different question that the bank may

k6
choose not to apply the possible sanctions in the case of unavoidable obstacles, but this cannot be such an opportunity for the operation which is

enjoying the advantages of a preferential loan that they may realize their

class interests contrary to the interests of the people's economy, without

consequences. That is, presumably in the majority of cases the overfulfillment with other merchandise would have been realized anyway, independently

of the extension of the loan in question.

What Is Needed To Make the Decision?

World market prices of agricultural and food industrial products fluctuate

widely. Since the farms do not export directly, the world market's effects

can only either be felt in a very dulled-down way in agriculture, or not at

all. Because of this, interest in export is also quite lax. There are

numerous examples when—because of the interests of the people's economy,

due to domestic demand—the export of some products if temporarily halted,

or decreased. In such cases the plants which have accepted obligations in

the loan contract are unable to fulfill their obligations. It appears that

for agricultural products—aside from one or two exceptions—the bank's

supervisory and sanctioning role can extend only over demanding accountings

of the producing and sales increments, but not over actual export.

The situation is different for processed products. The main question here

actually is, who should accept the risk of losses resulting from world market

price changes, or, respectively, where should the possible price profits precipitate. In our opinion, due to the preferred character of the exporturging loan construction, the risks belong to whoever takes out the loan.

An enterprise or trust which decides on a large volume food industry development, must have that much market information that based on it they can make

such development decisions which also makes it possible to bear the possible

negative consequences. Of course, good cooperation with the foreign trade

enterprises, joint interests in the expectable risks and results are also

necessary for this.

There still are several opportunities in agriculture and in the food industry

for development projects to increase the export merchandise base, which can

be carried out rapidly, will produce additional merchandise base still in the

current 5-year plan, and can be paid back from the net foreign currency

brought in within 3 years. The bank will accept such loan requests in 1979

and in 1980 also. The growth of the people's economy, and the constant expansion of foreign trade relationships also exert an influence in the direction that the enterprises and cooperatives should seek additional opportunities

and that they should already take the initiatives now to prepare for their investments which they intend to realize in this or in the next plan period.

8584

CSO: 2500

^7
POLAND

OLSZOWSKI COMMENTS ON SOCIOECONOMIC POLICY

Warsaw GOSPODARKA PLANOWA in Polish No 7-8 Jul-Aug 78 pp 349-353

[Article by Stefan Olszowski: "On Consistent Implementation of Social and

Economic Policy"]

[Text] Matters pertaining to functioning of the economy occupy the focus of

attention of the party and the toilers.* Clear confirmation of this is the

high status of problems connected with improving management in the resolutions of the Sixth and Seventh congresses, in the proceedings of the Second

National Party Conference, and in speeches by Central Committee First Secretary

Comrade Edward Gierek. On 25 April of this year the Politburo and Government

Presidium evaluated the current stage of adoption of a modified economicfinancial system. The evaluation was based on an analysis elaborated by the

Party-Government Commission, government agencies and departments of the

Central Committee. Materials preparedoby the Polish Economic Society were

also utilized.

For 8 years now we have been implementing the socioeconomic policy spelled

out at the Sixth Congress and further developed at the Seventh Congress. At

the Second National Party Conference we presented a synthesis of progress to

date. We are acquainted with facts and figures which depict the progress and

achievements made during the first seven years of this decade.

As a result of consistent implementation of the strategy spelled out at the

Sixth and Seventh congresses, our country has reached a new and higher level

of social and economic development. Our nation's assets have become substantially increased and renovated. Living and working conditions in our society have rapidly improved. In all of Poland there is not a single individual, family, place of employment, town or region which has not shared in the

fruits of achieved socioeconomic progress. Many factors were involved in

* This article is an abbreviated version of a speech delivered by PZPR

Central Committee Secretary Stefan Olszowski, member of the Politburo, at a

plenary session of the Supreme Council and Main Administration of the Polish

Economic Society on 27 May 1978.

48
this progress. Of primary importance, however, was the party's correct sociopolitical strategy, corresponding to the needs and capabilities of the

people, as well as i t s mobilizing and organizing ability.

The historic importance of the resolutions of the Sixth Congress can be

adequately appreciated only when we take into consideration the unusual complexity of initial conditions at the beginning of this decade. Parenthetically speaking, we still today feel the results of those conditions.

The conceptual achievements of the new socioeconomic policy affect all areas.

Of fundamental importance was adoption of the principle of priority of social

goals. The change in the mode of thinking and action was also reflected in

approach to problems of agriculture, capital investment, foreign trade, and

the system of functioning of the economy.

Implementing the policy of the Sixth and Seventh congresses, we accelerated

this country's development and achieved considerable success in all areas.

A unique cost of the incredibly dynamic development of the economy was the

appearance and increase of stresses and bottlenecks in some areas. A

definitely disadvantageous system of objective factors was added to the

difficulties resulting from these stresses and bottlenecks. We are referring

in particular to the slowing of growth — and even retrogression — in farm

production, due to adverse weather as well as unfavorable development in

Western markets.

Certain phenomena in the capital investment process also were a factor which

additionally contributed to increasing stresses in that situation. They

found expression in excessive scattering of the capital investment front and,

as a result, in an increase in freezing and commitment of capital funds.

Attempts to counter these negative trends were not sufficiently effective.

As a rule the pressure of capital investment needs proved stronger than the

mechanisms which were to counter excessive broadening of the capital spending

program.

Adverse performance in agriculture, difficulties in the area of foreign trade,

the situation which formed in the area of capital investment, as well as the

continuing dynamic growth of personal income, caused partly by weakening of

income-pay discipline — all these factors substantially promoted an increase

in market stresses. Thus in addition to considerable achievements, there

occurred at the end of the last five-year plan difficulties and stresses in

different areas of the economy. This was the diagnosis of the situation at

the threshold of the second half of the 1970's on the eve of the Seventh

Congress. Formulating a program for the period 1976-1980, new trends in the

structure of factors, both internal and external, influencing this country's

subsequent social and economic development, were also taken into account.

h9
The Seventh Party Congress, expressing the will to continue the policy -

initiated in 1971, took the position of continuity of the strategy of the

Sixth Congress, continuity not interpreted in a dogmatic but rather innovative manner, taking into account the changeableness of development conditions. Continuity of strategy is preserving priority of social goals and

at the same time variability of concrete solutions in the economic area

applied to new needs and capabilities. This interpretation of continuity of

the strategy of the 1970's was confirmed in the resolutions of the Seventh

Congress, which were subsequently concretized at the Fifth Central Committee

Plenum.

At the Ninth Central Committee Plenum, in September of last year, we made a

thorough party assessment of the conformity between the course of economic

processes and the resolutions of the Seventh Congress and Fifth Plenum.

Appropriate guidelines were also specified for current socioeconomic policy,

as well as tasks for the government and all political and administrative

agencies, "ensuring" achievement of the social goals contained in the five-year

plan. The assessments and proposals formulated at the Ninth Central Committee

Plenum were fully ratified by the Second National Party Conference.

Taking into consideration performance in 1976-1977, changed conditions of

economic management, and guided by concern to ensure meeting the targets of

the current five-year plan, the following priorities are incorporated in the

1978 plan:

first — strengthening of market equilibrium by maintaining highlydynamic production and market deliveries, with simultaneous disciplining of

the economy by payroll fund and other revenues;

second — consistent implementation of the program of providing an

adequate supply of food to the people, primarily on the basis of further

modernization and activation of agriculture;

third — reduction, in comparison with 1977, of the deficit balance

in foreign trade, by increasing exports more rapidly than imports;

fourth — acceleration of the housing construction growth rate;

fifth — further concentration of outlays on projects to be completed

this year and next year;

sixth, and last — increased efforts in the area of improving efficiency of management, particularly in the area of utilization of raw materials,

fuels and energy.

In light of the results achieved in the first months of this year, the situa^"..

tion in the economy is fairly complicated, while the above-listed priority

tasks are being performed in a differentiated manner.

50
Progress in meeting plan-specified targets is the object of regular assessment by the Politburo. Specified targets are being successfully met in many

important areas. We are aware of occurring stresses and difficulties. We

are endeavoring to resolve them without delay. Actions have been undertaken

toward this end both at the administrative-economic level and at the party

level.

Analysis of the causes of current stresses and difficulties, from the very

nature of things, engenders reflections. We have not yet succeeded in

satisfactorily applying instruments of economic management to the present

complex conditions, in spite of the fact that the quality of functioning of

the nation's economy occupies an important place in the activities of party,

government and economic organizations.

As regards current problems connected with appraisal of the state of functioning of the modified economic-financial system, we must confess — considering the relatively short period of time which has passed since the

process of adoption began — that in practice there have occurred certain

rather important deviations both at the ministry-association level and in the

association-enterprise system. They are manifested first and foremost:

in application of an excessively elaborated range of administrative

directives and so-called informational indices;

in an absence of stability of standards and parameters;

in suspension of functioning on the part of certain elements of the

system;

in creation of insurance reserves and limitation of the motivational

force of system solutions;

in application of evaluation criteria based on gross indices.

One's attention is also drawn to the necessity of system simplifications as

well as adjustment of some of its instruments.

At the same time there is a predominant conviction both among sociopolitical

activists, economic officials and in the scientific community that the

adopted direction of modification is correct and corresponds to the needs

and conditions of our country's current phase of development.

As I stressed at the outset, the problem of a modified economic-financial

system was evaluated by the Politburo and Government Presidium. At that

meeting a thesis of continuation of the adopted policy of improving the

planning and management system was formulated in a decisive and unequivocal

manner. This is a reply to views sometimes expressed on the necessity of

suspending all initiatives in the area of functioning of the economy until

such time as the supply situation is improved and market stresses and other

difficulties are eliminated. We believe that these are incorrect views,

51
proceeding from a lack of understanding of the goals and substance of the

process of streamlining the economy. We proceed from the position that improved efficiency of economic management is essential precisely in order to

overcome difficulties, eliminate stresses and achieve the highest goals

under the given objective conditions. On the other hand, Polish experience

as well as that of other socialist countries demonstrates that the key to

improving efficiency is a central planning system and — appropriately

linked to it — a modification-incentive system creating extensive opportunities for economic organizations and inclining them toward efficiency-improvement undertakings.

The Politburo and Government Presidium recommended that the Government Commission on Improving Planning, Management and the Operations of Large Economic Organizations undertake appropriate measures for the purpose of

eliminating occurring weaknesses in the functioning of the modified system

as well as stepping up preparations for expanding the new principles of the

system in other areas of the economy.

At a meeting of the Politburo and Presidium of the Government attention was

also drawn to matters of a more general nature, of fundamental importance

for future work on reforms in the system of functioning of the economy. Comrade Edward Gierek emphasized the necessity of a comprehensive approach to

the matter of systemic assistance of efficiency processes in the economy.

It is a matter of parallel actions at three levels:

at the level of improvement in the contents and methods of planning;

at the level of improvement of economic-financial system solutions;

at the level of direct production activities at production enterprises.

In the process of improving the quality of planning, main efforts should be

focused on creating conditions for stabilizing the basic points of the fiveyear plan as the main instrument of implementation of long-range strategy.

This will help strengthen the status of the plan and its discipline as well

as creating a foundation for long-term standards provided in the principles

of the Large Economic Organization system. Of great importance is intensification of work on problem programs, and particularly from the standpoint of

guaranteeing their conformity with branch, ministry and regional programs.

Horizontal planning should be developed as a method of bringing production

into harmony with the needs of society under conditions of an economy of a

high degree of complexity. There should occur integration of planning with

the management system, particularly with the economic-financial principles

of activities of economic organizations. We should note that the Planning

Commission has recently taken a major step forward in this direction, through

elaboration of planning instructions for 1979-1980, reducing the scope of

planning information and applying its contents to demands proceeding from the

modified economic-financial system. As regards improvement of functioning of

the economic-financial system, a primary task is achievement of consistent

observance of its principles in the practical activities of ministries,

associations, and enterprises.

52
As we know, up to the present time the ministries operating according to the

modified principles have been only formally performing appropriatelcomputations and have been specifying standards and parameters of the Large Economic

Organization type for economic organizations. At the same time, however,

they have been applying to a no lesser — and sometimes even greater —

extent instructions, limits, and so-called orientation indices. They continue

to form the basis of performance calculations of economic organizations as

well as assessment of their performance. This essentially complicates

functioning of the mechanisms of the modified system.

It is consequently necessary to analyze the reasons for this state of affairs and to create conditions for correct performance of management functions by the ministries in conformity with the principles of the economicfinancial system. Carrying out the instructions of the Politburo and

Presidium of the Government, the Government Commission is performing appropriate

work in this area.

In light of past experience it also seems necessary to consider the possibili^

ty of expanding the scope of financial undertakings from the WOG [Large

Economic Organization] development fund. It is also necessary to make improvements and simplifications in financial instruments, as well as

to instruct on systems principles.

We attach great importance to further improvement of such a fundamental system measuring stick as "surplus production." Growth in surplus production

should exclusively reflect actual progress in the activities of economic

organizations. This is an important and difficult task in view of the fact

that the value of surplus product is still affected by many factors which have

nothing in common with actual production growth or with actual reduction of

costs. The inadequate quality of the surplus product measuring stick

strongly affects system solutions. We must concentrate the analytical and

conceptual efforts of economists, scientists and practical workers dealing

with the economic-financial system of economic organizations on this problem and all problems related to it (for example, prices).

Work should be finalized on criteria for evaluating the activities of economic units aimed at providing incentive to meet quality and efficiency targets, as well as tasks connected with the principles of the economic-financial

system. Their incorporation into production will constitute an important

factor in strengthening the modified system of functioning of economic organizations .

As we can see, there is a large group of problems to be solved, problems

which have cropped up in the process of adoption of the modified economicfinancial principles.

The producing enterprise is the principal level which in the final analysis

determines progress in efficiency. Solutions in the area of planning and the

economic-financial system will bring anticipated results to the extent that

they find appropriate response directly at the production level. Thus an

53
important task is to communicate the ideas of the system, and particularly

its modification-incentive contents, "downward," to the enterprise, the

production unit, and appropriate application of the principles of the system

to the conditions of each work station, brigade and department. Development

of "organic work" is necessary — if we may use this term — to regulate the

system of production quotas, organization of production, wage principles,

etc, for a suitable quota base at the enterprise constitutes a unique essential infrastructure for initiating and intensifying efficiency processes.

Also of great importance is development of a mass worker efficiency innovation and invention movement. A substantially higher level of personnel skills

as well as modern production equipment create great possibilities in this

area. The Central Committee Secretariat recently issued directives instructing management as well as sociopolitical organizations to create conditions providing incentive for worker initiative and making possible practical

utilization of the results of efficiency innovation and invention activities.

Enhancement of the role of economic accountability and criteria of economical

operation in the aggregate of activities of production enterprises requires

stronger economic initiatives. The work performed by economic services should

be focused to a greater degree than up to the present time on seeking ways to

achieve the most efficient management of production factors, improvement of

production, and particularly product quality. The Polish Economic Society

initiative to expand the scope of the 0. Lang competition to economic innovation at enterprises is a good one. We are encouraging the Main Administration of the Polish Economic Society and all the Society's components to

publicize the idea of the competition — the search for new economic solutions in economic units, to impart to it the character of a broad movement.

This will be an important contribution by the Polish Economic Society toward

implementation of the party-designated program calling for increasing the

efficiency of our economy.

Working vigorously to achieve full accomplishment of current targets, we are

at the same time building a program for the longer-term future. Work is

continuing on actualization of targets for 1979 and 1980. Analysis and

studies of the long-range national development plan for the period 1981-1985

have been initiated. What goals, tasks and problems will be formulated and

in what manner will they be resolved in the period 1981-1985? The Eighth

Party Congress will give an elaborate answer to these questions. The premises

for this answer are already arising today, however, particularly that economic

processes as a rule are of a long-term character and measures undertaken today

will reflect on economic development in the 1980's.

Our economy has achieved a high level of development. The range of possible

development alternatives is becoming increasingly broader. This brings an

increase in the importance of socioeconomic calculation in decision-making.

A thorough, comprehensive analysis of the trends and patterns characterizing

our economy is needed. Otherwise we could easily make the mistake of

voluntarism, costly to the country and alien to the principles of party policy

5^
laid out at the Sixth and Seventh congresses. We need a productive and competent discussion of these problems. If I may be allowed, I should like to

make a digression involving the role of discussion and debate in our sociopolitical affairs.

The post-December Party Leadership has advocated and continues to advocate

productive debate and discussion of the affairs of Poland and its citizens.

The Polish Economic Society is an exceptionally important forum, greatly

appreciated by the party, for such debate, pertaining particularly to our

country's social and economic problems. The majority of our economists have

proven their ideological commitment, a high degree of competence as well as

comprehension of and support for party policy. The evaluations and expert

appraisals, suggestions and proposals elaborated by the Polish Economic Society are extremely helpful in formulating socioeconomic policy. This area

of the Society's activities should be further developed and deepened. All

of us are aware that debate and discussion of the achievements, difficulties and prospects of socioeconomic development is of a political character

par excellence. It is therefore not surprising that the opponents of socialism would also like to invade the area encompassed by these problems. A

position of feigned concern for improving socialism has long been utilized

as a method against socialism. Under this guise they seek to remove from

socialism its class content, attacking the socialist state and the principle

of the party's leadership role. In our country as well, pretending concern

for the development of socialism in Poland, and even with lip-service recognition of the party's leadership role, they are attacking the party as the

directive force of the people and organizer of the building of socialism.

The difficulties and problems, which were noted and evaluated much earlier

by the Central Committee and government, particularly at the Fifth and Sixth

plenums, are utilized by some persons as a pretext for a more or less

camouflaged attack on the foundations of our system. It is characteristic

that the opponents of socialism today employ the tactic of attacking not in a

general but particular manner, attempting to cast doubts on the correctness

of our policy in various areas of our nation's affairs. The essence of such

a tactic is quite clear. The objective is to avoid the impression that socialism and its very essence are the target of attack. The opponents of socialism

are acting in a manner calculated to confuse segments of our society and are

employing a unique division of roles, but nevertheless subordinated to a

single overall objective — to weaken the party's leadership role and to

strike a blow to the interests of the socialist state.

Antisocialist views demand a vigorous rebuff. We have been on many occasions

in the past and will be in the future in clash with the political adversary.

The strength of our ideology lies in the fact that in repulsing antisocialist concepts we are performing a productive evaluation of past progress, we

are not closing our eyes to the difficulties occurring in this country's

affairs, we are identifying the problems to be solved and we are solving

them. Proceeding from the Marxist-Leninist character of our party is the

aspiration to improve the functioning of societal mechanisms on the basis of

an objective analysis of development needs and capabilities, in the interests of and in a close bond with the worker class and with the toiler

masses. In these last 7 years we have demonstrated that this direction of

55
action and these principles are being consistently implemented in practical

social activities.

Returning to the heart of our deliberations, I should like to draw attention

to the fact that in debate and discussion of the future, taking into account

prediction of economic phenomena and processes, both internal and external,

we should adopt as a point of departure the demands and higher interests

deriving from the needs and aspirations of the people. Increasingly fuller

satisfaction of the material and spiritual needs of society continues to remain the higher goal of economic development. These are and will continue to

be requirements of a new character, proceeding from the higher level of income and improvement in overall living conditions. They will demand, certain

reorientation in market production as well as in development of services.

In the opinion of the Central Committee Economic Section, problems of economic balance in all its aspects should be considered on a priority basis

in deliberations on the proportions of the future five-year plan. We believe

that strengthening of balance in foreign trade as well as improvement in the

structure of material supply balances presently constitute a very important

condition and factor in further economic progress. Achievement of permanent

market equilibrium, however, in the structure of basic product mix groups is

a task of the greatest societal importance.

In order to strengthen market equilibrium it is necessary to achieve substantial progress in development of agriculture. Increased supply of farm

products constitutes, alongside boosting the market output of industry, a

fundamental condition for economic equilibrium of the entire economy.

The pace of achievement of social goals will depend on effectiveness of breaking through barriers to growth and development as well as resolution of many

key problems in the area of production factors.

The labor supply situation as well as the need for a further increase in the

share of employment in the broadly-classified area of services will exert considerable influence on the overall conditions of economic development beyond

1980. Balancing of the effects of decrease in employment growth through

changes in the structure of employment, improvement in the organization of

labor and improvement in quality of labor will be of fundamental significance.

The method of solving raw materials and fuel-energy problems will be of great

significance. There will clearly be a need for further development of the

program of expanding utilization of chemicals in the nation's economy. There

should also be considerable progress made in reducing the materials requirements of production. This demands intensification of structural changes in

the economy by increasing the percentage share of branches with the most advantageous economic parameters from this standpoint. Essential at the same

time is more economical utilization of raw materials and supplies, by adopting

materials-saving manufacturing processes as well as by improvement in materials

management.

56
Proper development of the economy: in the future will demand considerable

modernization and development of the technical infrastructure, particularly

transportation and communications.

Selection of a suitable plan for stopping increase in air and water pollution as well as solving of general problems in the area of protection of the

environment and waterways, and particularly river flow management, will be

of great social and economic importance.

In the 1980's there should occur additional substantial increase in Poland's

participation in international division of labor. Therefore we must comprehensively strengthen development of export-favoring branches which shape

specialization within the Polish economy. Of great importance is expansion

of economic cooperation with the Soviet Union, particularly in light of

decisions reached during the meeting between Comrade Edward Gierek and Comrade

Leonid Brezhnev. A meeting was held in Moscow in January of this year

between the premiers of Poland and the Soviet Union to deal with the matter of

execution of the decisions reached by both leaders of brother parties and

nations. The protocol signed on the occasions of this meeting deals with a

number of topics which are of importance for development of long-range economic and scientific-technical cooperation. Intensive work is presently in

progress on detailing projects pertaining to many areas of the economy.

Further improvement in efficiency and quality in the overall process of

economic management should be acknowledged as a task of universal importance.

It is necessary comprehensively to deliberate the question of what technical

policy, organizational and systems actions will best promote accomplishment

of this task.

We are harnessing all the productive resources of the people to the job of

accomplishing far-reaching social and economic tasks. We attach particular

importance to further strengthening the role of science in development of

this country as a direct productive force. This direction of effort is in

conformity with the basic Marxist-Leninist principles of shaping societal

development on a scientific foundation and supported by science — a key

factor stimulating technical-economic progress. At the initiative of

Central Committee First Secretary Comrade Edward Gierek, at its June Plenary

Session the Central Committee specified the areas of fullest utilization of

science and scientific-technological progress in this country's socioeconomic

development. The plenum specified the main areas and directions of research

in which — in conformity with the nation's higher interests — the efforts

of scientific establishments, research and development facilities as well as

plant management and entire work forces should be concentrated. Analyses

were made of difficulties occurring in scientific activities proper as well

as in the mechanisms of utilizing scientific achievements in practical socioeconomic activities.

Important tasks particularly in the area of streamlining organization,

planning and management of economic activities and in the process of

57
perfecting and adopting economic accountability face economists, both

representatives of economic science and representatives of practical economic activities.

We believe that the Polish Economic Society and the Chief Technical Organization perform exceptionally important functions of promoting the development

of science and technology. This is an expression of great social acknowledgement of these two organizations. It is at the same time emphasis of the

growing significance of the role of economic accountability and economic

thinking in production activities and in undertaking organizational-technical

measures. We believe that the criterion of economic effectiveness should be

assigned the highest rank in the aggregate of activities of managers of

economic affairs, engineers and technicians, production organizers and

those responsible for scientific and technological advances. The official

tasks of the Polish Economic Society assume great importance in this connection.

We believe that further development and improvement of Polish Economic Society activities in the area of technical-organizational and economic

counsel at various levels of economic management would serve a useful purpose.

I should like to express the conviction that through their initiative and

activity Polish economists — economists working at production plants, enterprises and associations, at planning and design offices, at research establishments as well as central and local administrative entities, at scientific institutes and higher schools — will even more effectively support

implementation of the program of the Seventh Congress — a program of the

party and Polish people.

3024

CSO: 2600

58
POLAND

POLITBURO EXAMINES POWER SUPPLY AND OTHER PROBLEMS

Warsaw TRYBUNA LUDU in Polish 10 Oct 78 p 1 AU

[Article: "PZPR Central Committee Politburo Session"]

[Text] The PZPR Central Committee Politburo at its 9 October session examined

a report by the Ministry of the Power Industry and Atomic Energy on the state

of preparations for work in the 1978-79 autumn-winter peak-load season.

Particular attention was paid to the progress made in fulfillment of the

tasks at the major power industry projects expected to increase power supply

now in the current year. The need was emphasized to fully implement the

planned power industry investments, which should increase the capacity of

power plants by 2,^70 megawatts.

Since the demand of the economy and the population for electric current is

rapidly growing, it is highly important for all consumers, particularly for

industry, to use electric current in a thrifty manner.

Administrative organs in ministries, associations, enterprises, cooperative

organizations, in voivodships, cities and gminas must see to it that the

government program for economizing fuel and power is fully implemented.

Party echelons and organizations must systematically evaluate the work performed by administrative organs at this sector.

The supply of lime fertilizers to agriculture was the next issue on the agenda.

Due to various measures taken, the supplies of lime fertilizers to agriculture

have significantly improved. A favorable evaluation was given to voivodship

initiatives which have resulted in a 7 percent increase in lime supplies from

local sources. Notwithstanding this improvement, the agricultural needs have

not been fully met.

The Politburo drew attention to the need to further increase the supplies of

fertilizer lime from local sources and of magnesium lime from industry. It

was advised to make better use of means for lime transportation, to improve

services and to prepare all machines for lime application, as well as to

provide spare parts for them.

59
The Politburo evaluated the development of this year's summer holiday action

for children and youths and stated that proper conditions were provided for

recreating and boosting the physical and psychical forces of youth. About

k.6 million persons enjoyed various forms of recreation. The number of

participants in scounting camps, in seasonal voluntary labor detachments

and in recreative colonies has significantly increased. An increase has

been registered in the number of children in seasonal rural nurseries

intended mainly for children in pre-school age. About 300,000 children

enjoyed this form of welfare in the busy season. The coordination activities

of all youth, public and trade union organizations, as well as of the institutions concerned, resulted in the implementation of a broad program for

educational, cultural, sports and tourist activity among youths and children.

The part of youths in various socially useful works increased in comparison

with previous years, and this was a particularly valuable factor in implementing the principle of labor education. More than 350,000 young people

participated in these works within voluntary labor detachments.

The creation of proper conditions bringing children and youths in touch with

cultural creativity is to be rated as an essential achievement of this year's

summer action.

The Politburo has recommended, on the basis of this year's summer action, to

undertake measures aimed at its further expansion through the best possible

use of the network of recreation facilities and through improving various

forms of recreation at the places of residence with the assistance of enterprises and local administration.

CS0: 2600

60
ROMANIA

DEVELOPMENT OF INDUSTRY, LABOR FORCE TRACED

Bucharest REVISTA ECONOMICA in Romanian No 31, 4 Aug 78 pp 4-5

[Article by Grigore Valceanu and Elena Badea of the Institute for Socialist

Economy: "Socialist Industrialization, Decisive Factor in Improving Living

and Working Conditions"]

[Text] The focus of our party and state policy for building a multilaterally

developed socialist society has been and continues to be man, and the total

satisfaction of his material and cultural needs. As Nicolae Ceausescu has

stated: "All that has been achieved in our nation through the joint efforts

of the millions of builders of socialism — men and women, Romanians,

Hungarians, Germans, and other nationals, young and old — is devoted to

improving the material and cultural well-being of the people, the ultimate

goal and reason for our party's policy, the essence of all the work done in

building a socialist and communist society in Romania." The comprehensive

steps planraed and taken by the party to raise the standard of living of the

population as a result of the successes obtained in material production,

involve unprecedented actions regarding higher incomes for the population,

better supply of consumer goods and housing, and so on, as well as achieving

a higher level in the manner in which every citizen of the country participates

in labor and life. In this context, the constant improvement in working

conditions in all branches of the national economy constitutes one of the

essential elements of the multilateral development of human personalities,

to which the Romanian Communist Party has devoted and continues to devote

the greatest attention. In achieving this major goal for the development

of human personalities, our party has started by creating the necessary

material conditions from an accelerated growth of the national economy and

a continuous increase in the national income.

The socialist industrialization of the country — the fundamental option of

our party's economic policy — has proven from this standpoint to be the

only correct path for assuring the balanced and proportioned development of

all branches of the national economy, for the judicious distribution of

production forces throughout the nation's territory, and implicitly for the

creation of better working and living conditions for all workers in towns

61
and villages. Of course, the effects of the socialist industrialization on

the quantitative and qualitative improvement of working conditions for workers

are manifested on many planes, both economic and social. We will concern

ourselves here with only a few major aspects of the improved working conditions

of the working person as an effect of the socialist industrialization, to wit:

better employment and utilization of the work force, and improved working

conditions in enterprises and institutions.

A Qualified Personnel, Homogeneously Distributed Throughout the Country

From an economic standpoint, one of the major effects of the socialist

industrialization of the nation and of the rational distribution of

industrial sites throughout the territory of the country, can be found in a

number of qualitative changes in the structure of the work force.

To begin with, the socialist industrialization has made it possible to create

new jobs not only in industrial branches, but in the other branches of the

national economy as well, a condition which has enabled an increasingly large

portion of the population to exercise its right to work. As a result, the

employed population in 1976 exceeded 10 million persons, or about 2 million

(22 percent) more than in 1950; thus by the end of 1976 the employed

population amounted to 47.7 percent of the country's population. It should

be pointed out that the decisive element in the growth of the employed

population has been the development of industrial production branches, where

the number of newly created jobs during the period in question has been

greater than the total increase in the employed population throughout the

national economy. In the future, the policy for socialist industrialization

of the country will continue to be the major source of higher level jobs for

those who are able to work. From this standpoint, the documents of the

11th Party Congress stipulate that 1-1.2 million new jobs will be created

during the 1976-1980 period, of which 60 percent will be in industry; as a

result, the proportion of the employed population will continue to increase.

While assuring the right to work and creating new jobs which will provide

employment for all those who are able to work, the effects of industrialization

on improved working conditions have also been reflected on the significant

changes that have occurred in,the structure of the employed population, as

distributed among production spheres and branches of the national economy.

During the period of socialist industrialization the number of workers in

the primary sector has been steadily reduced, while the proportion of the

population employed in the secondary and tertiary sectors, where working

conditions are better, has steadily increased. A substantial increase has

been seen in the proportion of those employed in industry, constructions,

and in non-agricultural branches in general. For the first time in the

history of the country, the proportion of the population employed in industry

during the current five-year plan will exceed the proportion of those working

in agriculture. By 1990, about 85-88 perCent of the total employed population

will be working in industry and other non-agricultural sectors of the national

economy, and only 12-15 percent in.agriculture.

62
At the same time, the socialist industrialization has created the framework

necessary for the introduction of technico-scientific progress into the

production processes of the entire economy, gradually reducing the differences

between physical and intellectual work. This process, which in recent years

has acquired a new magnitude, is occurring as a result of the increasing

complexity of jobs, the substitution of simple labor with complex labor, and

the elimination and replacement of unqualified labor with qualified work.

The increased complexity of jobs and their higher proportion within all the

work performed in the national economy, not only represents one aspect of

the improved working conditions, but also decisively contributes to the

formation of the socialist consciousness and the development of human

personalities. The worker is increasingly becoming a creator, the production

process constituting the field for the full affirmation of everyone's

capabilities and talents.

In final analysis, the effects of the socialist industrialization process,

having caused significant changes in the structure of the employed population,

are also reflected in the changed professional structure of this population

and in the higher level of training and qualification of the work force.

The endowment of the economy with advanced techniques and technology has

required and increasingly demands workers with sound professional training

and broad cultural horizons, capable of mastering modern means of production,

as well as an increasingly' larger number of technicians and engineers with

extensive specialized knowledge, who are good organizers of production and

labor. The number of qualified workers has thus reached a major proportion

in all industrial branches as well as in the other branches of the national

economy. The number of engineers, economists, researchers, other specialists,

and technicians has increased at a very rapid rate.

The introduction of technical progress has made it necessary to formulate a

long range program (until 1980) for training qualified workers, and specialists

with intermediate and higher training for all sectors of economic and social

life. The first stage of this program has qualified more than 1,730,000

persons, with another 1.75-2 million remaining to be qualified during the

second stage (1976-1980).

It must also be mentioned that our party's policy for the accelerated

development of the economy on the basis of the nation's industrialization,

has smoothly combined economic options with socio-political ones. That is

why the modernization of the economy considers not only macro-economic and

branch structures, but also the fact that our order assures the growing

homogeneization of working and living conditions for workers, without

distinction of nationality, from all zones and localities in the country,

in other words, the homogeneization of the general level of civilization.

Consequently, the assignment of industrial development priorities for counties

that are now lagging, has social effects of large magnitude which result in

assuring equal living and working conditions for all citizens of the country.

The judicious distribution of production forces throughout the territory of

63
of the country assures the availability of high productivity jobs for all

the active population in all counties and localities, the high level use of

labor resources, the most equal participation in the utilization of modern

means of production, and so on.

Our party's entire activity for improving the working conditions of the

population throughout the nation's territory is framed within a unified

concept, which as Nieolae Ceausescu has indicated, is based on the fact that:

"The building of socialism presuposes the strong development of production

forces throughout the country's territory, in a unified and broad concept.

Only in this way is it possible to raise the degree of civilization of all

localities, eliminate the migration of the population toward large cities,

smoothly transform the entire structure and social life, achieve complete

equality for working and living conditions, as well as exercise the rights

and establish the social life all the citizens of the country." *)

Development of the Workers' Creative Capabilities

Starting from the premise that labor is the principal sphere for manifesting

social life, our party is constantly acting to improve working and .living

conditions in enterprises, institutes, and cooperatives, where man spends a

significant portion of his life. Stressing the profoundly humanist nature

of our party's policy, Nieolae Ceausescu has said: "Within this policy we

devote particular attention to matters associated with the improvement of

working conditions in enterprises, with the extensive promotion of measures

for work protection and safety. We believe that these matters are of high

political and social significance, and we are doing all we can so that in

our society, workers, in their position of producers of material goods and

simultaneous owners of the means of production, will have all circumstances

assured to conduct their activities under the best conditions, benefiting

extensively from the advances of modern science and technology." **)

An essential concern in this respect is the constant increase in the degree

of mechanization and automation of production processes through the

introduction of technico-scientific progress. The allocation in recent years,

of 33 percent of the national income to the fund for the nation's economic

and social development, and the achievement on this basis of a vast program

of investments, has resulted in a rapid growth, renewal, and modernization

of the technico-material basis of all branches of the national economy,

primarily in industry.

*) Nieolae Ceausescu, "Romania on the Road to a Multilaterally Developed

Socialist Society," Vol 12, Ed. Politica, Bucharest, 1976, pp 400-401

**) Nieolae Ceausescu, "Message to the Participants of the Eighth World

Congress for Preventing Work Accidents and Professional Diseases,"

SCINTEIA, No 10,806, 18 May 1977

6k
The growth of productive fixed assets at a rate which significantly exceeds

the growth rate of the population employed in material production branches,

has led to a rapid increase in the technical endowment of labor, with direct

consequences on improved working conditions. It is well known that the cost

of a new job follows a strongly ascending curve: from 300,000 lei in 1965-1970,

this cost has grown to about 500,000 lei during the 1970-1975 period, and will

reach some 700,000 lei during the current five-year plan.

In industry, as the branch which is witnessing the highest growth, fixed assets

per person will be 45 percent higher in 1980 than in 1970; if we consider only

the new industrial capabilities that will be provided with machinery, equipment,

and advanced technologic installations before being placed in operation, the

specific investment required to create a new job will be nearly twice as high

as that required during the 1971-1975 five-year plan.

Similar trends are also observed in the other branches of the national economy.

In agriculture, for instance, the technical endowment of labor expressed in

terms of fixed assets per employed person, has increased 6.1 times during the

1950-1976 period, in recent years even exceeding the rate found in industry.

The achievement of the technico-scientific revolution in agriculture thus

contributes significantly to the transformation of agricultural labor into a

type of industrial labor, to making working and living conditions in villages

more similar to those in towns, and therefore to intensifying the social

homogeneization of the nation.

The greater technical endowment of labor in all branches of the national

economy as an effect of the socialist industrialization, is directly reflected

in the reduction of heavy labor, in facilitating work, and in the large volume

of operations performed mechanically. In 1975 for instance, the mechanization

of construction-installation operations performed in enterprises reached

90.6 percent for earth work, 95.3 percent for transportation, over 86 percent

for concrete work, 88.5 percent for handling, and so on. A high degree of

mechanization has also been achieved in agriculture, where the major

operations are almost totally mechanized, and where crop maintenance work

is being increasingly mechanized from year to year.

Together with the greater amount of technical support for labor in enterprises,

particular attention has been devoted and is being devoted now to improved

working conditions through the consistent application of new advances in the

scientific organization of labor, the strict respect of work protection

standards (prevention of work accidents, control of noise and pollution,

gradual limitation of work which endangers health and heavy physical labor),

the use of labor hygience and medicine principles, and so on.

In the words of Nicolae Ceausescu: "Under today's conditions, when as a

result of the very rapid progress of the technico-scientific revolution

and the strong development of production forces, the number of people working

in industry, in material production, and in all branches of the economy is

increasing without respite, the continued expansion of work protection

65
activities, the efforts to find new and effective means for improving

working conditions and for preventing accidents in production and professional

diseases, assume the magnitude of major concerns, of priorities of contemporary

society, while lending a noble and profoundly humanitarian character to this

question with broad economic and social implications." *:) In fact, during the

1953-1975 period for instance, more than 24 billion lei were spent to provide

work protection in enterprises, institutions, and economic organizations.

During 1977 alone, the state spent 1.9 billion lei for work protection, for

an average of 289 lei per working person, with nearly 40 percent of these

funds being devoted to protection equipment.

Important steps have also been taken to supply workers with consumer goods

directly in enterprises, to serve meals in plant cafeterias, and to provide

transportation to and from work, all of which having contributed directly to

improve working and living conditions, to form stable work collectives, and

to strengthen the cohesion of these collectives.

All of the above, together with steps taken to improve health protection,

have reduced mortality from professional diseases, reduced the number of

days lost for temporary disabilities, and minimized the number of work

accidents. In 1975 for instance, the number of days of temporary disability

resulting from professional diseases as we'll as from work accidents per

100 workers was reduced from 13.1 in 1964 to 2.0 and from 11.9 to 10.8,

respectively. Similarly, the number of work accidents per 1000 workers was

3.7 in 1977, as compared to 5.9 in 1971.

An essential element in working conditions is the duration of work. Based on

the increasingly good results of production and on the rising labor productivity

(at an average annual rate of 7.9 percent in industry, 6.6 percent in

construction and installation in enterprises, 4.8 percent in railway

transportation, and so on, during the 1951-1976 period) resulting from

the socialist industrialization, the premises are being established in our

country for reducing the duration of work. The program for reducing the

duration of the work week, adopted by the National Conference of the Party

in December 1977 and already being applied this year, provides for a

gradual transition to a reduced work week in two steps: the first stage

for the 1978-1980 period during which a 46 hour work week will be successively

introduced in branches and sectors of the national economy, and the second

stage for the 1981-1983 period during which a work week of 44 hours will

also be successively introduced in the economy.

*) Nicolae Geausescu, "Message to the Participants of the Eights Workd

Congress for Preventing Work Accidents and Professional Diseases,"

SCINTEIA, No 10,806, 18 May 1977.

66
It is notable that the program for the gradual reduction of the work week

assures the conditions not only for increasing the amount of free time,

but also for improving cultural-educational activities.and services to the

population, thereby achieving the framework needed for a better development

of man along many planes, in the sense and spirit of the requirements for

building a multilaterally developed socialist society.

11,023

CSO: 2700

67
ROMANIA

BUCHAREST CONSUMER GOODS FAIR DESCRIBED

Bucharest REUISTA ECOIMOMICA in Romanian No 31, k Aug 78 p 15

[Report on the Ninth Fair of Consumer Goods Samples, Bucharest '78, by

R. Bujor]

[Text] At the Piata Scinteii Fair Grounds, Bucharest is hosting the Fair

of Consumer Goods Samples. In its ninth year, this event of national interest

— which polarizes the attention of public opinion in Romania, and that of

a large number of organizations, enterprises, and firms in other countries —

is being conducted as part of the application of the measures adopted by the

Plenary Session of the RCP of 22-23 March of this year, for improving the

whole economico-financial mechanism, and shortly following the closing of

the Nationwide Conference of Workers in Socialist Trade.

The '78 Fair proposes to present the fulfillment of the indications given by

Nicolae Ceausescu, secretary general of the party, during working visits to

previous fairs; and to stress through characteristic forms and means, the

results recently achieved by industry and trade in terms of realizing the

provisions of the program regarding the production and distribution of

consumer goods to the population during the 1976-1980 period, as well as the

objectives of special programs for major branches, approved by the higher

leadership of the party and state.

The particularly fruitful results of the first half of the five-year plan

at all levels of socio-economic life, powerfully illuminate the scientific,

realistic nature of the party's strategy for economic growth, a strategy

aimed at the progress of all branches of the national economy and at the

continued improvement of the population's standard of living.

As part of these fruitful results, the present fair convincingly demonstrates

the successes obtained in increasing the volume of products and in diversifying

and improving their quality, as a point of reference for the ground that has

been covered, as well as for recalibrating the tasks and goals for 1978, in

68
order to fulfill the decisions of the 11th Congress and of the National

Conference of the RCP. In accordance with this orientation, the fair is

a work event, with a modern and efficient organizational framework for an

industry-trade dialog aimed at contracts for merchandise.

In its 21 pavilions, covering an area of nearly 29,000 square meters (about

one-third more than the previous fair), production ministries, industrial

centrals, and other economic units are showing to the public the most recent

creations in the field of consumer goods. In some domains, this renewal

process typical of all branches of the national economy, is occurring at

very high rates and proportions. For the units of the Ministry of the Light

Industry, for instance, the proportion of new and redesigned units in the

value' Df goods produced represents kO percent this year, and is expected to

reach 55 percent in 1979 and 65 percent in 1980. This process of product

modernization is particularly strong in some sectors, as for instance:

8000 new items, designs, and color combinations for textiles, 6000 models

of knits, 12,000 models of clothing, 10,000 models of shoes, and so on.

The chemical industry with an average annual rate of development of more

than 17 percent, also provides a systematic increase in model structure,

with a noticeable improvement in quality, providing an increasingly better

supply to meet the complex changes in demand. The Central Institute for

Chemical Research has made a substantial contribution to the effort being

made to utilize the creative and productive potential of the branch. Among

the many new products are the cosmetics manufactured by the enterprises

Miraj of Bucharest, Farmec of Cluj-IMapoca, and Nivea of Brasov; synthetic

washing products manufactured by the detergent enterprises of Timisoara and

Ploesti; a wide range of "chemistry in the home" products; plastic items;

and rubber tires and technical products.

The stands that present the progress achieved by machine construction units

in the production of consumer goods, summarize their contribution to the

goal of more fully satisfying the population's demand for durable goods;

these goods are notable for their construction and competitive technical

specifications, for the fine execution and presentation of television sets

with integrated circuits, transistorized radios with good selectivity and

modulated tones, refrigerators of various sizes, vacuum cleaners, and so on.

The fair seeks to ease the industry-trade dialog in order to size the volume

and structure of the supply at the level of the demand. The organization and

operation of the fair along modern lines — products grouped according to

use — gives it a pronounced working character.

Since the major activity of the fair is the work associated with contracts

for all the 1979 production of goods — excepting, of course, those items

that are strongly influenced by fashion, as well as those that will be

manufactured in facilities which will be placed in operation during this

semester — the displays consist only of those goods for which conditions

have been assured for production and delivery to the market. As a result,

69
these contracts acquire the meaning of changes in content, which will be

added to the already higher values of goods sold through the socialist

trade — about 200 billion lei in 1979, and 215 billion lei in .1980.

Notable among the items of new quality, that will define contracts for goods

produced in 1979, are:

The organization along a unified concept — from the central commission

formed by the Ministry of Domestic Trade, to the 76,000 retail units --

of a study of the population's consumer demand, based on scientific

criteria, using modern means of investigations, grouping, processing, and

finalizing of conclusions;

The full utilization of the organizational and regulatory machinery for

recording phenomena and trends in commercial activities, through the

introduction and management of account books and daily logs of store

managers, and the organization of councils of unit heads, as well as the

exploitation of the latter's competence in order to improve overall trade

activities and particularly the system of determining needs;

The broad involvement of county councils of buyers:representatives in

selecting and establishing the choice of goods, by taking into consideration

direct options, zonal characteristics, traditions;

The completion by the Ministry of Domestic Trade in collaboration with other

ministries and industrial centrals, of a program of information and study of

the opinions of specialists and other workers in commerce, through the use

of collections of samples, photographs, sketches, films, drawings, and slides,

in order to define creative trends and movements in the modernization of

products;

The organization of analyses of the manner in which economic contracts are

being respected, as a basis for adopting measures which will assure timely

deliveries whose volume and structure will meet contractual obligations

(analyses and measure imposed by the fact that some items included in special

programs for production diversification — automatic program washing machine,

electric stove with heat accumulator, teflon-coated aluminum ware, and some

household articles — are produced with delays, that although 736 new items

have been adopted in the food products sector only two-thirds of these were

delivered to the market, and so on).

Extensive surveys (more than 100,000 questionnaires) will be organized for

visitors to the fair in order to find the preferences of the population,

as well as meetings with buyers, conferences, round table discussions,

practical demonstrations, fashion shows, and other actions designed to

provide the truest picture possible of trends in consumer demand, preferences,

and buying choices. At the same time, around the fair and in the large

department stores Unirea and Bucur-Obor in Bucharest, Bega in Timisoara,

70
Unirea in Iasi, Central in Cluj-Napoca, and Brasov, sales will be organized

for goods valued at more than 120 million lei, consisting primarily of

the new items being shown at the fair.

There is no doubt that this vast organizational effort will contribute to

the sale under the best conditions, of the goods produced during 1979, in

direct relation with the growing income of workers, and to the better supply

of consumer goods to the population.

11,023

CSO: 2700

71
ROMANIA

PLASTICS ENTERPRISE WORKERS FOCUS ON PROBLEMS

Bucharest REVISTA ECONOMICA in Romanian No 31, k Aug 78 pp 17-18

[Article by Darin Constantinescu: "Turning Point in the Management of

Resources Entrusted to an Enterprise Collective"]

[Text] The pride and gratitude for the highest level of appreciation for

the results obtained last year — results which placed the unit in second

place in the branch competition — were strongly expressed at the general

assembly of workers' representatives of the Plastics Processing Enterprise

(IPMP) of Bucharest, a collective which was awarded the Order of Labor

Class II. In order to bolster economic self-management and to raise the

level of the workers' self-determination, the general assembly has sponsored

a responsible analysis of the activity carried out during the first semester

of 1978, and of the measures that need to be taken to complete the annual

plan and achieve all its indicators, as well as to prepare the production of

the fourth year of the five-year plan. In particular,, the discussions

focused on concrete means for stressing the qualitative aspects of the

economic activity, in the light of the principle oriented tasks established

be the Central Committee of the party at its Plenary Sessions of March and

July of this year.

It can be assumed that the pronounced spirit of criticism — and to a

certain extent, self-criticism -- that animated the discussions, was

stimulated by the profoundly analytic nature of the report presented by

the workers' council, which, without addressing itself to specific persons,

did point out existing shortcomings.

This year — notable in the history of IPMP-Bucharest not only by the high

distinction which it received, but also by the inception of investment

projects that together with the development of production facilities, will

assure a better organization and modernization of the enterprise — the

collective continues its series of deserving achievements. The planned

levels for total and goods production, for investments, and for labor

productivity were surpassed during the first half of the year. No rejections

for quality were received either from domestic buyers, or from foreign

72
customers, who are assigned more than 50 percent of the production. The

renewal of the product line, which during the first two years of the fiveyear plan had the effect of replacing importations valued at k.l million leicurrency for domestic users, was achieved through the adoption of 60 more

new or redesigned products. In an international plastics market dominated

by powerful firms with established traditions, the Bucharest enterprise has

maintained a competitive position based on flexibility in adapting

manufacturing technologies and products to the demands of foreign customers,

thereby receiving contracts for massive export deliveries. Their

industriousness and growing professional level has increased the income of

the workers, and the collective contract has provided them with a number

of improvements of a social nature.

Application of One's Own Decisions, Measure of Maturity

The tone of dissatisfaction which nevertheless dominated the general

assembly, reflected both in the report and in the words of some workers'

representatives in the workers' committee, showed that the collective

management organ is aware of the fact that it has not fully carried out

its duties.

At the end of six months, some of the indicators of IPMP-Bucharest are

negative, indicators that are essential under the accepted new economic

mechanism. The efficiency of its activity is below its capabilities.

Internal malfunctions and negative influences from outside persist; these

factors were brought to light at the general assembly of January, were

examined on all facets during subsequent meetings of workers' councils, and

could have been corrected by now.

During the first quarter, while fulfilling 101.2 percent of the total

production, the enterprise remained h percent below the plan for net

production calculated per 1000 lei of goods produced. The analysis conducted

by the collective management organ at the beginning of April did not

penetrate to the core of the phenomenon, which continues to increase in

an oscillatory manner.

The primary causes are malfunctions in supply, and the delayed and

inadequately strong standardization of the production structure through

sales contracts in Romania and abroad. This has led to frequent changes in

manufacturing programs and schedules (sometimes forcing the substitution of

uneconomical raw materials for less expensive ones), and to physical

production items being kept in stock while other contracted amounts and

terms were not being respected.

As the generals assembly determined, instead of a comprehensive and fundamental

approach with the support of the Industrial Central for Rubber and Plastics

Processing, the enterprise used firefighting interventions which not only

failed to solve the fundamental problem, but fostered the occurrence of

73
violations of technical and housekeeping discipline, unfortunately in

conjunction with contractual failures on the part of some suppliers.

It has been demonstrated in practice that half of the measures fail to yield

even half of the effects. In the absence of a program for organizing

transportation, handling, and storage aimed at the entire cycle, the addition

and poorly organized presence of an investment site in such a crowded area

has sown disorder in the management of raw materials and finished products.

The efforts made to place in operation some silos for the bulk storage of

PVC granules received in railway carloads, are disrupted by the "operational

assistance" of the Rimnicu A/ilcea Chemical Combine, which in one shot recovers

its delivery delays by shipping (with the approval of the jurisdictianal

central of IPMP) hundreds of carloads of sacks of granules for which storage

space could not be found. l\lo reliable system has been introduced to check

on the complete unloading of arriving tanks of bulk PMC and plastifiers.

At the beginning of the year the general assembly criticized the failure to

finalize the measure for placing in operation the five silos for storing

polyethylene granules; two and a half months later, the workers* council

observes that the rescheduled dates (March-April) were also not respected.

Two silos are now ready, and for the others the mechano-power sector gives

the date of ... September, while the workers' council makes a "warm appeal"

for urgency. The further expansion of shipping in containers, transcontainers,

pallets, bundles, and crates is reduced by the difficulty of handling items

in outside areas blocked by raw materials subject to deterioration, by scrap,

and by products stocked for two years already.

Wet Production — A Barrier to Excessive Consumption

Are the recently attacked investments really expected to also clear the

housekeeping and management conditions of raw materials and finished products?

What expenditure of resources in needed, right now, so that the personnel of

shipping and receiving departments, stores keepers, group leaders, foremen,

each worker, and especially each member of the collective management, will

understand their responsibilities toward these goods, some of which are very

costly, and all of which were obtained at the expense of currency?

At IPMP-Bucharest, each month of the first semester closed with average

losses of about 800,000 lei through excessive specific consumptions (both

in handling-storage and in technical processes) and through supply and

transportation costs. The interests of the national economy cannot admit

such a waste of significant amounts of raw materials, which to a large extent

represent the higher end product of primary energy resources, raw materials

whose value would be multiplies several fold through processing into products

useful in all branches of the national economy. At the same time, as a

determining factor for the failure to achieve net production, waste reduces

the contribution of the unit to the creation of the national income. And

as some participants in the general asembly pointed out, the psychologic

climate of disorder also fosters a lack of work discipline on the part of

7^
those workers mho are instrumental in causing a high fluctuation indicator;

the total production equivalent of the idle hours for the first six months

amounts to the six month quota for surpassing this indicator!

IPMP-Bucharest is now at the point of no return in its effort touard a higher

quality of activity conception and execution — the point beyond which any

delay will make recovery more difficult. The recent general assembly has

confirmed that the entire work collective is aware of this need and is

determined to undertake immediately and will all its strength, the fulfillment

of the indications given by the secretary general of the party, IMicolae

Ceausescu, as he restated them at the great peoples' assembly held a week

ago in Tulcea: Wore attention must be devoted to raise the technologic

level of all production activities, improve economic efficiency, reduce

material and production costs, and use more rationally the means available

to us. On this basis we will obtain a higher growth in national income, and

we will create new means for the general development of the nation and for

raising the standard of living of the population."

The Strength of Self-Determination: Recommendation of Effective Solutions

In final analysis, the discussions of the general assembly could be summarized

in three paragraphs:

Self-discipline is within the power of the work collective, so that by

defining precise tactical objectives whose achievement will involve all the

working personnel according to each worker's tasks and functions, it will be

possible to pass through this unfortunate state of affairs and extract its

roots;

The workers' council as a whole and each of its members must exercise the

authority conferred upon them by the mandate with which they have been

entrusted, must themselves provide an example of discipline through

perseverence in organizing and controlling the fulfillment of established

measures, and together with the political organizations of the enterprise,

must use all channels to stress motivation and further the education of the

workers;

The individual and collective participation of workers in management must be

supported by their real collective and individual responsibility for the

results that are obtained: responsibility in terms of attitude, job

obligations, and assumed risk.

These may seem to be theoretical considerations, but they are no more than

the wording of the many proposals advanced at the meeting of the high

management organ of the enterprise. These proposals concerned:

75
Reduction of Material Costs, Elimination of Waste

Interventions with suppliers for the scheduled delivery of rau materials of

consistently good quality. Participation of production shop representatives

in the receiving of raw materials. Procurement of instruments and devices

for quantitative receipt of these materials. Correct technical and economic

determination of consumption standards; elimination of unjustified changes in

limit-files; introduction of an ordered system for releasing raw materials

for consumption.

Reduction of Technologic Losses, Utilization of Scrap

Fabrication by tooling shops of good quality dies, which would enable machines

to operate automatically; avoidance of raw material losses and of retouching

operations (the latter currently employ tens of workers). Timely receipt of

special raw materials; programming of longer runs for various items, so that

it mill not be necessary to frequently clean the equipment when changing

lines, and thereby waste raw materials. Extension of the "New Products From

Scrap" initiative, which last year, implemented by more than 50 operators,

has made it possible to recycle 8D tons of polyethylene and obtain a production

of goods of 1.5 million lei. Recovery of used products from customers (such

as returnable bottles) in order to reuse materials.

Assuring Physical Production, Increasing Net Production

Rigorous collaboration among receiving departments, production programming,

and distribution — among themselves and with production shops — in.order

to respect sales contracts to the letter, including the immediate delivery of

completed production. Balancing production programs in terms of products

with various profitabilities. Complementing product lines with products

that will more widely meet customer demand and better utilize raw materials,

including the use of less expensive polymers with similar characteristics.

Liquidation of products in slowly moving stocks. Utilization, on the part

of design departments and production groups, of data collected by quality

control sections as part of their work, regarding the behaviour of products

in operation.

Organizational Measures

Limiting the fluctuation of operators among machines, as a channel for

increasing their personal responsibility in raising the utilization index

of technical equipment (particularly in the injection processing shop).

Discussion within union groups, of cases of indiscipline and waste; education,

and if necessary proposals of sanctions against those who do not join the

collective effort. Activating domain commissions of the workers' council,

commissions whose composition has been improved by decision of the general

assembly.

76
The commission for higher labor productivity and for the scientific

organization of production and labor, the one for production quality and

economic efficiency, the one for development, investments, and technologic

progress, and the one for supply, distribution, and import-export, can use

a judicious program to undertake -- in collaboration with the appropriate

departments — analyses and studies to solve the problems which face the

enterprise (organization of storage, effective programming of production,

redesign of products using the method of value analysis), can support the

collective management organ in adopting and implementing the necessary

measures, and can initiate actions to involve all workers in increasing the

economic efficiency of all activities.

In addition, the general assembly has presented the following requests to

the responsible central and to the foreign trade enterprise Danubiana,

requests that are fully justified by existing conditions:

Participation of enterprise representatives in drawing contracts with

suppliers, in order to support the introduction of the most efficient

delivery conditions (containerization of filler materials, avoiding bag

shipments);

More extensive surveys of domestic and foreign markets;

Writing contracts without delay for the 1979 production, as a basis for

finalizing the plan indicators; writing contracts of intent for longer

periods with large and consistent customers, when the latter cannot provide

specifications early enough.

To the extent to which the collective management will utilize the assistance

received from the general assembly, not only through unrelated decisions

intended to solve detail problems, but through diagnosis and a comprehensive

approach to fundamental problems by truly reevaluating and improving its awn

style of work, will it be possible to perfect a viable combination of

responsibility and mass initiative, as a prerequisite of self-management.

By eliminating the scale of shortcomings, the crucible of IPMP-Bucharest's

activities will contain only the incandescent wealth of the collective's

industriousness and talent, a collective which is eager to repeat last year's

performance, to add to the prestige of Romanian chemistry, and to contribute

— by fulfilling the tasks assigned to it in the special program for

developing plastics production — to the supply of the national economy and

the population with highly useful products.

11,023

CSD: 2700

77
YUGOSLAVIA

BUDGET FOR 1979 DEBATED IN FEDERAL CHAMBER OF SFRY ASSEMBLY

Belgrade EKONOMSKA POLITIKA in Serbo-Croatian 25 Sep 78 p 11

[Excerpts] The beginning of the discussions in the SFRY Assembly on the

proposed bases of the federal budget for next year does not promise agreement by delegates and budget drafters even on some main points, judging

from last week's reactions by delegates in the council for socio-economic

relations in the Federal Chamber.

In short, the proposed federal budget is to increase almost 17 percent

[over 1978] and the total budget amount to about 96.1 billion dinars, of

which 51.4 billion dinars would be earmarked for national defense (a 20.5

percent increase) and 8.2 billion dinars would be for the inadequately

developed republics and the province of Kosovo (an almost 18 percent increase). For disability and veterans allotments 13.7 billion dinars is

allocated, and 5.3 billion dinars for supplemental funds for military

insurance pensions, 6.6 billion dinars for the operation of federal organs

and organizations (not including sociopolitical organizations), and almost

5.5 billion dinars to pay obligations from previous years. All in all,

according to representatives of the FEC (Federal Executive Council), 83

percent of the budgetary funds were committed in advance by existing legal

obligations. Thus, greater changes are noted in the planned sources [of

revenue] and their share in the budget. Most marked is the 30.7 percent

increase in contributions from republics and opstinas and the 0.1 percent

reduction in deficit financing, i.e., keeping the use of funds from primary issuance to 9.4 billion dinars.

A delegate from Croatia, after saying that all needs are justified, said

that there is no end to claims for funds.... The limit must lie in a

respect for the principle that budget funds not increase faster than the

national income, a delegate from Slovenia concurred, and opposed an increase

in republic and provincial contributions. In addition, the delegate from

Slovenia proposed [higher] selectivity in non-economic investments, reexamination of material reserves, and non-postponement of payment due

federal creditors, in supporting the budget drafters who did not advocate

increasing deficit financing from primary issuance of money. At the same

time, the delegate from Serbia was not satisfied simply that we remain on

78
the same level in regard to deficit financing but thought it necessary to

reduce such financing and use bonds or some other funds to make up the

difference. But the increase in the federal, republic, provincial, and

opstina budgets must not be larger than the increase in the national

income. As a result, the delegate from Serbia believed regulations which

determine the increase in public expenditure must include prescriptions

regarding the inter-dependence of this form of expenditure and the accumulative and reproductive ability of the economy.

A representative of the National Bank said that the view supporting use of

funds from primary issuance is not in accord with the system or its intention. According to the FEC, 64 percent of total funds from primary issuance

this year will go into budgetary expenditures and similar purposes—hence

their judgment that next year it is necessary to reduce deficit financing

from primary issuance at least to one-half of this year's amount.

CSO: 2800

79
YUGOSLAVIA

DANGERS OF CHRONIC OVERSPENDING AT THE EXPENSE OF THE ECONOMY

Belgrade BORBA in Serbo-Croatian 23 Sep 78 p 2

[Excerpts] The distribution of increased income (as a result of the: fast rate

of economic development, higher prices and more money in circulation) took

place at the expense of the economy in the first half of this year. Income

was distributed to the detriment of capital accumulation.

The ICY CC Presidium and FEC (Federal Executive Council) at a recent meeting

pointed to these negative facts in discussions on realizing the policy of

stabilization.

A comparison of the data on the 6-month financial results of economic operation, shows that, in contrast to the established policy and to agreements,

the unfavorable trend of many years continues in regard to overspending with

the result that the economy is further impoverished (the share of organizations of associated work in income distribution fell from 62.9 percent to

62.1 percent).

The expansion of spending (which is usually an important stimulus to dynamic

development) and the distribution of income at the expense of the economy

threaten to endanger the favorable economic trends and results and are the

sources of new difficulties and negative trends in the economy. This means

that one of the key tasks of the 10th and 11th congresses on strengthening

the reproductive ability of the economy, which is essentially not only an

economic but also a large ideological and political question, is not being

achieved.

Spending without adequate coverage, inconsistently in achieving the established policy in regard to secondary distribution (more precisely, the gross

violations in achieving this policy) is an important center of inflation

today. The lack of interest of producers in more quality operation dampens

efforts to increase exports (it is easier to sell under the favorable conditions in Yugoslavia) and it stimulates imports, thus sharpening the balance

of payments situation. Also, this situation makes more difficult the development of a society of associated workers, strengthening the position and role

of associated labor in income distribution in regulating the course of economic

80
^

operation and reproduction, and it hardens the relations in which important

positions continue to have centers which are alienated [from the workers].

As a result, the Central Committee at the 11th Congress sharply pointed out

that the constant spending for public and social service purposes outside

the limits of realistic possibility and the agreed upon policy is an expression of the insufficient influence of associated labor on the delegate

assemblies. This is especially true in self-management interest communities,

[i.e.,] the formalizing of their work in reducing the process of decisionmaking to the full acceptance of decisions before they have been organized

or focused.

In these negative movements (which are repeated year after year) one must

seek a reason which is, in fact, the relation to the policy of stabilization

and to creating the conditions for strengthening associated labor; because

the facts show that sociopolitical communities (republics, provinces,

opstinas) and work organizations often violate the established policy, and

spend beyond the possibility of their earned income.

Most often this fact is pointed out without naming who the violators are. Wien

it is a question of spending without coverage, it is exactly known when and

by how much the budgetary funds of opstinas, provinces, republics, and also

the federation are growing, where and how much the funds of self-management

interest communities are growing, where high incomes (despite considerable

losses) are being distributed in work organizations, where agreements on the

earning and distribution of income are being grossly violated. (As illustration we cite the fact that increased public and social service spending has

not occurred only because of the increased bases on which certain tax rates

are applied, but also because of the increase in the rates themselves).

In the first 7 months of this year outlays for investment increased by k7

percent, revenues for public expenditure increased by 23 percent, revenues

for social service expenditures increased by 28 percent, and personal incomes

increased by 27.k percent. Also in this period contracted obligations (taxes,

fees) increased by 3k percent, and comprised 10.3 percent of available income

(which is usually more than earned income), while interest payment obligations

increased by kO percent. At the same time income rose by 20 percent but that

which remained for the economy increased at a lower rate.

CSO: 2800

81
YUGOSLAVIA

LACK OF RAW MATERIALS IN NONMETALS INDUSTRY

Belgrade PRIVREDNI PREGLED in Serbo-Croatian l8 Sep 78 p 3

[Excerpts] Some things have changed in the nonmetals branch of the economy

in the first half of this year but not the most important thing—the rawmaterial base continues to provide less than expected. In the first half of

this year raw material production fell 5 percent below the same 1977 period

and it fell k percent for the 7-month period. Processors showed an 11-percent

increase in production, but raw material production was less (about 9 percent

for magnesite, ik percent for asbestos fiber, 39 percent for barite, 3^ percent for crude feldspar); although the production of quartz sand increased

by 8 percent and that of refractory clay by 21 percent.

In addition to the well-known reasons for lower production (obsolete equipment, delay in opening new sites), producers did not want to produce more

than could be sold. As a result, reserves, are almost completely depleted.

Processors at the same time require higher quality which domestic mines cannot meet, because of the lack of modern equipment, etc.

One of the encouraging pieces of news this summer is the signing of the

agreement between the Magnohrom enterprise and Polish partners to jointly

finance construction of a plant to produce sinter magnesite from dolomite

and seawater, but an agreement has not yet been reached on where to locate

this facility.

The raw material part of the nonmetals branch of the economy, while lowering

production, has also lowered losses (namely, by k percent in the first 7

months of this year), while total revenues increased by about 20 percent.

CSO: 2800

82
YUGOSLAVIA

CROATIAN FOREIGN TRADE SHOWS DECLINE IN FIRST HALF OF I978

Belgrade EKONOMSKA POLITIKA in Serbo-Croatian l8 Sep 78 pp 27, 28

[Excerpts] In the first half of 1978 exports from Croatia were 10.1 percent

less (amounting to hardly $695 million), and imports 2.2 percent less (exceeding $1.2^ billion) compared to the same 1977 period. The rate of decline of

foreign trade is more marked for this republic than for the country as a

whole; up to now 55.6 percent of Croatian imports have been covered by exports (compared to 5^.2 percent for Yugoslavia), while the trade deficit has

increased by about $50 million compared to the first half of last year (the

deficit for Yugoslavia decreased).

This was reported at a recent meeting of the republic's coordinating council

for economic relations with foreign countries and it was added that the value

of exports from Croatia to the developing countries declined by 76 percent,

that to the socialist countries increased by 30 percent, while that to the

developed countries of the West increased by .1.5 percent. The value of

imports from the developing countries increased by 29 percent, while that

from the socialist countries declined by 20 percent, and that from the

developed Western countries declined by 9 percent.

Contributing to the poor picture of foreign trade for the republic in the

January-June period of this year, especially with the developing countries,

was the reduced exports of ships (66.k percent decrease) which, however,

will be made up in the third quarter of the year when shipyards are expected

to exceed this year's export quota by 10 percent. Also, the value of exported

industrial products is expected to increase by 13.1 percent and an increase in

invisible earnings from tourism, transportation, and workers remittances is

expected to have a favorable effect on the total balance of payments of the

republic by the end of the year.

CS0: 2800

83
YUGOSLAVIA

BRIEFS

JAT OPERATIONS—In the first 7 months of this year JAT (Yugoslav Air Transport) carried a total of 1,883,0^9 passengers, or 15 percent more than in

the same 1977 period. It also increased goods transport by 9 percent and

mail transport by 8 percent, carrying ll,i+52 tons of freight and kk^ tons

of mail. [Belgrade EK0N0MSKA POLITIKA in Serbo-Croatian 11 Sep 78 p 25]

FALL PLANTING--According to initial forecasts, about 1,850,000 hectares will

be planted in winter crops this fall, including about 1,625,000 hectares in

wheat, or about 90,000 hectares (5 percent) less than last year. [Belgrade

B0RBA in Serbo-Croatian k Oct 78 p 1]

COST OF LIVING--The cost of living increased by 0.6 percent in August over

that in July, and by Q.k percent compared to December 1977- [Belgrade

EKONOMSKA POLITIKA in Serbo-Croatian 18 Sep 78 p 5]

PORT OF BAR--In the first 8 months of this year 10 percent fewer goods were

handled at the port of Bar than last year, although the second stage of construction of the port's capacities has been completed. According to the plan,

the port should have handled 1.8 million tons of goods instead of only 730,000

tons. The port's capacities have already doubled and it will soon be able to

transship k.5 million tons of goods; this means that already this year a large

part of its capacities will remain unused. This becomes even more serious

when one realizes that the Belgrade-Bar rail line (that part which is under

the Titograd Railroad Transportation Organization) is only 30 percent utilized,

so the total rail-port system is still to a large degree in a secondary position. This is because of long-term established routes for goods from Serbia

through other ports, regardless of the fact that these routes are longer and

roundabout; but it is expected that next year the port will be getting larger

quantities of goods. In the last few years 1.2 billion dinars have been

inevested in reconstructing and expanding the port of Bar. [Belgrade EKONOMSKA

POLITIKA in Serbo-Croatian l8 Sep 78 p 31]

LATIN AMERICAN TRADE--In the first 7 months of this year Yugoslav exports to

Latin American countries amounted to $66.7 million in value, or 35 percent

less than that in the same 1977 period. Yugoslavia imported $126.2 million

worth of goods from this area, or kk percent less than in the same period

last year. Exports paid for 52.8 percent of imports while the trade deficit

8k
was reduced from $122 million in 1977 to $59-5 million. Exports to latin

America accounted for 2.2 percent of all Yugoslav exports in 1977 and for

2 percent this year; while imports accounted for 1.9 percent of all imports

in the 7 months of this year and for 3-7 percent in 1977- Most exports went

to Venezuela (§kk.9 million), increasing by 6!+5 percent over last year.

Over $3 million worth of goods went to Mexico, Colombia, and Ecuador, about

$2 million to Panama and Argentina, while export to other countries was far

less. Most imports came from Ecuador ($22.2 million), Peru ($21.5 million),

Brazil ($20.3 million), and Mexico ($1^.3 million). [Belgrade EK0N0MSKÄ

POLITIKA in Serbo-Croatian 18 Sep 78 p 30]

TRADE UNION REORGANIZATI0N--0n 12 September the presidium of the governing

council of the SSJ (Trade Union Federation of Yugoslavia) finally adopted

a draft for the new SSJ organization, i.e., in place of the six federal

councils of branch trade unions, 15 councils of workers unions will be

formed for energy and the petrochemical industry; metal production and

processing; chemical and nonmetals; the textile, leather and shoe industries; forestry and wood processing; printing, newspaper publishing and

information; transportation and communications; construction, agriculture,

the food and tobacco industry; education, science, and culture; health and

social welfare; organs of administration, the judiciary, sociopolitical^and

social organizations and associations, financial organizations, and civilians

employed in the Yugoslav People's Army; the hotel, restaurant, and tourism

sector; the opstina economy and the artisan sector; and the trade sector.^

The new federal councils should begin work by 31 October 1978. It,was said

at the meeting that the increased number of SSJ organs will not increase the

administrative, professional, and political apparatus in the SSJ because

many services will be compressed and some trade union employees moved to

other work, so the total number of employees will even be a little less than

is the case now. [Belgrade EK0N0MSKA POLITIKA in Serbo-Croatian 18 Sep 78

P 13]

INFLATION DATA--Retail prices in September increased 10 percent over

December 1977, 14 percent compared to September 1977, and 1.5 percent

over August retail prices. The cost of living increased in the first 9

months of this year 9.8 percent compared to December 1977. Contributing

most to this increase were housing prices which rose 13.4 percent and

expenditures for heating and lighting (a 13.5 percent increase)« The cost

of living in September was 1.5 percent higher than in September 1977.

[Belgrade PRIVREDNI PREGLED in Serbo-Croatian 10 Oct 78 p 2]

CSO: 2800 END

85