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

petroleum in 1970.) Phosphate rock is imported mainly from the U.S.S.R., as is crude oil, which is obtained via the Friendship pipeline. In the future, natural gas from domestic sources and from the U.S.S.R. via pipeline also will serve as a chemical raw material, especially for nitrogen fertilizer and plastics.

Large nitrogen fertilizer plants are under construction at Leuna and Piesteritz, and additional capacity for plastics is being added at the Schwarzheide Synthesis Plant and at the Buna Works in Schkopau. Refineries at Schwedt and Boehlen are scheduled to increase output of petrochemicals for use as starting materials for plastics and synthetic fibers. A large new potash fertilizer plant at Zielitz started trial operation in January 1973.

Plans call for output of the chemical industry to increase by 47% to 49% during 1971-75, or by about 25% during the 3 years 1973-75. By 1975, production of plastics and of synthetic fibers is scheduled to be more than double 1970 output, while output of potash fertilizers is to increase 20%.

c. Light industry (including textiles) (U/OU)

Although oriented toward the domestic market, light industry has been unable to satisfy consumers demand, either in quantity or quality. In the past, it has been given a lower priority than the metal processing or chemical industries. Gross investments by the state in light industry during the period 1965-71 were only about 39% and 45% of such outlays for the metal processing and chemical industries, respectively. For light industry the official growth rate of gross production was 5.5% during that 6-year period, while the rates of growth for the metal processing and chemical industries were 7.5% and 7.3%, respectively. Output of selected light industry products is shown in Figure 23. Recently, greater importance has been placed on the development of the consumer goods industry to increase production and improve the quality of output. The additional output, however, is not solely for the fulfillment of domestic needs, but to meet trade commitments to the CEMA countries, especially the Soviet Union, and to satisfy the demand created by tourists from other Eastern European countries.

On the whole, light industry has not been a major source of exports. Exports of certain goods, however, have shown significant increases, absolutely and relatively to production. During the period 1968-71 furniture exports increased by 60% and exports of outer garments for men and boys, by 55%. These increases reflect the decision of East Germany to fulfill bilateral trade agreements with the U.S.S.R. and seek hard currency sales to Western countries rather than to satisfy domestic demand. Domestic consumption was given a higher priority in 1972 and 1973.

d. Agricultural processing (U/OU)

The agricultural processing industries have had the lowest average annual rates of growth in production of all the manufacturing sectors. Their share of total manufacturing employment, however, has been slowly rising, and the share of total manufacturing investments going into the agricultural processing industries increased from 7.1% in 1963 to 12.1% in 1969. In 1970 this figure dropped to 9.2% of total manufacturing investment, but it increased to 9.4% the following year, when total investment decreased slightly. The 1973 economic plan does not suggest any significant change in the output of the agricultural processing industries.

Before World War II, the area that is now East Germany was a net exporter of processed agricultural

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