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

Participation in CEMA (the Council for Economic Mutual Assistance) has, on the whole, had little effect on the structure of East German manufacturing. Most CEMA recommendations for the assignment of production responsibilities were either ignored or were merely confirmed developments already undertaken by the East Germans acting independently. In any case, specialization agreements covered only a small fraction of the output of the key industries in the East German economy. Since 1969, new bilateral and multilateral undertakings have begun to have some effect on the product-mix, but they have had very little effect on the branch structure of industries. (U/OU)

a. Metal products (S)

East Germany has the largest and most diversified metal products industry in Eastern Europe; its output of metal products (including products of mechanical, electrical, and precision engineering, electronics, and vehicle construction) as a share of total industrial production is greater than that of any other country in Eastern Europe. In absolute terms it leads those countries in the production of railroad passenger cars and is one of the world's leading exporters of rolling stock. East Germany ranked first in Eastern Europe in 1971 in the production of transformers and radio receivers and second in the manufacture of refrigerators. Output of selected types of machinery and equipment is shown in Figure 19.

Other industries which are significant in East Germany's metal processing sector are motor vehicle manufacturing, shipbuilding, and the production of telecommunications equipment. East Germany is second only to Czechoslovakia in the production of motor vehicles in Eastern Europe. With regard to shipbuilding, East Germany ranks first in the world in the construction of fishing vessels (in terms of tonnage), and in Eastern Europe it is second, behind Poland, in the construction of maritime cargo ships (Figure 20).

Production of military end-items, by the metal-processing sector is confined largely to optical and precision engineering equipment, small arms, ammunition, explosives, and some spare parts for military aircraft. Those items are produced in enterprises that are either entirely military-oriented or serve both the defense establishment and the general economy. The former group of enterprises are organized into VVB's but are subordinated directly to the Ministry for National Defense. For its supply of major military equipment, East Germany is entirely dependent on its Warsaw Pact allies, particularly the U.S.S.R. Some military-related optical and precision equipment is exported.

The items produced by the metal products industries are an important source of export earnings. They accounted for 57% of total exports in 1971. East Germany exports about two-thirds of its machine tool output, one-third of its tractor production (Figure 21),

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