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in this sector has been minimal and improvements in technology slow. Most investment has gone into the expansion of plants and equipment.

The level of technology and the quality of output in Polish light industry are low compared with those of Western countries. Few items produced are attractive enough or are of sufficiently high quality to be sold profitably in developed Western countries. Many items sold in the industrial West can be marketed only at unprofitably low prices; thus, the bulk of Poland's light industry exports go to other Communist countries. Principal exports are clothing, footwear, textiles, and furniture.

The low quality of output has also been a problem in the domestic market; it has discouraged the growth of sales beyond essential requirements and resulted in a rapid accumulation of stocks, particularly of clothing and household articles, during the 1960's. The Polish Government recognizes that the assortment, design, and quality of light industry goods must be improved if the country is to increase its exports and sell more profitably to the industrial West, meet increasing Soviet demand for high-quality consumer goods, and raise the level of living in the Polish population. The regime has already taken steps to encourage better marketing abroad. Restrictions on the use of labor have been removed, and export enterprises are being given easy access to investment funds for those opportunities that promise a quick return in foreign currency.

d. Food processing

The output of the large and diversified food processing industry accounted for about 18% of total industrial output in 1971. Its relative importance has declined considerably since 1950, when it accounted for about one-third of Poland's industrial output. Throughout the postwar period, growth of output in food processing, which is closely linked to the growth of agricultural production, has been the slowest of all sectors of industry except coal mining. In 1969, Poland exported 14% of its total output of foodstuffs of animal origin and 6% of its output of foodstuffs of vegetable origin. In 1971, exports included four-fifths of the domestic output of bacon and canned hams. About three-fourths of the exports of processed foods go to the industrial West. These exports account for about one-fourth of Poland's hard currency export earnings.

Poland gained considerably food-processing capacity, particularly in sugar refining, brewing, and distilling, with the acquisition of the former German territories. The industry has been subjected to much the same neglect as light industry. It received only 6% of total investment in industry during 1950-55 and 9% during 1956-71. Recently, however, in an attempt to modernize the industry, especially the export-oriented sectors, the government decided to purchase Western equipment. Contracts have already been signed for two meat processing plants each from West Germany and the United States, two sausage plants from the United States, and five powdered milk plants from Italy.

e. Construction

Poland's construction industry has grown rapidly throughout the postwar period. The total volume of construction in 1971 was about twice the volume in 1960 and nearly five times the volume in 1950. Private activity represented about 12% of the total volume of construction in 1971. Industrial building has accounted for the largest part of construction. Residential building accounted for 17% of the total value of construction in the socialized sector in 1971 and farm building for somewhat less than 4%.

Residential construction has been severely neglected, and new housing construction has not kept much ahead of the retirement of old stock. Official census data indicate that between 1950 and 1960 there was virtually no change in the number of persons per room and a slight increase in the ratio of families to dwellings in urban areas. Between 1960 and 1970, however, there was a slight decline in the ratio of families to dwellings ― from 1.17 to 1.14 ― for the whole country, and a substantial decline in the number of persons per room ― from 1.66 to 1.37. Useful floorspace in 1970 was less than 13 square meters per capita, as compared with about 18 square meters in Czechoslovakia and East Germany.

Even though housing is generally considered Poland's "number one welfare problem," Gierek has resigned himself to a worsening of the housing shortage through the mid-1970's. The planned rate of growth in housing construction by the socialized sector (4.7% a year) is barely above the actual 1966-70 rate. The 1.1 million dwellings to be built by 1975 are, by Polish estimated, 600,000 fewer than needed simply to house the expected additional population. In fact, the Poles face a formidable task in their attempt to eliminate the housing shortage by 1990, especially considering that resources will have to be devoted to improving the size and quantity of dwellings as well as increasing their number.

The housing problem in Poland has been compounded by shortages of repair facilities and materials. Rents set by the government are so low that

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200070030-5