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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110021-0

FIGURE 1. Estimated growth rates of GNP and industrial and agricultural production (U/OU) (chart)

of GNP than it does in West Germany. Investments have risen rapidly, especially since 1963 (Figure 2).

The GDR is the most highly industrialized country in Eastern Europe; the industrial sector accounts for more than one-half of its net output of goods and services (Figure 3). The share of GNP producer by the industrial sector has risen steadily in the postwar period, chiefly at the expense of agriculture, while communications (including transportation) and trade have each accounted for a relatively stable share of the total. Although agriculture and forestry have declined in relative importance, the agricultural sector still supplies the bulk of the domestic food requirements.

East Germany is deficient in many of the key natural resources required by modern industry. It has one small reserves of iron ore (low-grade) and small reserves of hard coal and crude oil. Its main resources are brown coal, uranium ore, nonmetallic minerals (including salt, sulfur, potash, and fluorspar), and recently discovered and developed natural gas deposits of still uncertain size. Before World War II the eastern German area depended mainly on the western area for hard coal and ferrous metals. There was also a large, complex intra-German trade in manufactures. Since the War, the U.S.S.R. has been the main supplier of materials to the GDR, although in recent years the regime has turned to the West, especially to West Germany, for materials, such as chemicals and nonferrous metals, as well as for industrial plant and equipment. The country's overall supply position in several basic materials is shown in Figure 4.

The economy still bears the scars of being abruptly cut off from West Germany and other Western markets at the end of World War II. The Communist countries, with which the GDR has conducted about three-fourths of its foreign trade, could not replace either the materials or the industrial cooperation formerly supplied by West Germany, nor offer a comparable market for specialized East German industries. The GDR was forced to build up new high-cost industries to meet Soviet requirements and to help replace West German deliveries. These two industries—chiefly mining, ferrous metallurgy,

FIGURE 2. Index of gross fixed capital investment (U/OU) (graph)

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110021-0