Economic Change in the DDR - Germany

  • Created by: RConwa_y
  • Created on: 22-05-18 10:57
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  • Economic Change in the DDR
    • Land reform
      • Large estates had been given to peasants in 1945 - this created problems. They were unable to farm profitably
      • In 1952, the SED introduced collectivisation and formed land production co-operatives (LPGs) as part of the plan for the Building of Socialism
      • Mechanisation became possible, making agriculture more efficient. The policy was not popular and many abandoned their farms and fled to the West
      • There were food shortages and a drop in production, contributing to the 1953 unrest
      • By 1959 LPGs made up 45 per cent of the agricultural sector. This figure was 85% but production had decreased and rationing returned. This resulted in more people leaving (and was a reason for the Berlin Wall)
    • Industry and nationalisation
      • Problems with the Five Year Plans
        • Targets ignored customer demands
        • An emphasis on quantity over quality reduced salebility
        • Plans were out of date before they were implemented
        • Prices were fixed but not linked to supply and demand
        • Living standards sowly improved compareed to the FRG, A metal worker earned less than 300 marks per month where as a manager earned 4,000 or 15,000. Managers received unfair benefits
      • The 1950s
        • During the Allied occupation after the war, many large industries were nationalised and most people worked in "People's Own Factories" (Volkseigene Betriebe/VEBs) owned by the state
        • The party set targets, handled discipline and ran social activities - increasing control
        • The emphasis was in heavy industry. Production targets were unrealistic in the Five Year Plans, which were often changed and increased
        • There was some upturn in the economy at the end of the 1950s
    • The Seven-Year Plan
      • 1959 - the Plan was implemented to align economic development of the DDR with that of the Soviet Union
      • Consumer goods were brought as well as an increase in living and working conditions. The consumer goods were expensive and not made in  large enough quantities
      • Rationing did not end until 1958. Many left for the West
    • The 1960s
      • The Berlin Wall stabilised the workforce as there was less movement to the West. It resulted in some economic freedoms too
      • In 1962 the Seven Year Plan was abandoned because of economic problems. A new lan for 1962-70 was drawn up, but never implemented
      • A "New Economic System for Planning and Direction" (NOSPL) was introduced in 1963
        • Brought more flexibility and input from workers
        • Allowed workers to share in profits - encouraging production
        • Emphasised quality over quantity

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