Economic Stabilisation after 1961

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Economic Stabilisation after 1961

Advantages

  • The construction of the Berlin Wall meant that labour supply was no longer dwindling
  • A secure workforce meant that the government could more effectively plan for the economy
  • These problems could be addressed with Ulbricht's NES and ESS
  • These plans attempted to make the economy more efficient by reducing central control and allowing some measures of profit to drive industry forward

Disadvantages

  • The sealing of the border created some problems
  • There were housing shortages
  • The SED could no longer blame the problems on emigration
  • Both policies lacked Soviet support

Evaluation

The two policies were relatively successful but in 1971 Ulbricht was removed from power and replaced with Honecker. Honecker immediately reversed the policies and reintroduced central planning. Honecker tried to bring welfare and the economy together.

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