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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110014-8

Communist countries. Moreover, military equipment is an important export to the less-developed countries. Czechoslovakia supplies the equipment on liberal credit terms; repayment usually is in raw materials—particularly oil, ore, and cotton.

b. Chemicals

The chemical industry is one of the fastest growing branches of the economy. According to official data, gross output of the chemical industry (including the production of coke chemicals but excluding rubber products) increased in 1972 to more than seven times the 1955 level. However, the industry started from a small base after World War II so that by 1971 it accounted for only 6% of gross industrial output and 4% of the industrial labor force. The most rapidly growing sectors have been those producing plastics, chemical fibers, synthetic rubber, fertilizer, and closely related intermediate chemicals such as synthetic ammonia and nitric acid (Figure 9). During the Fifth Five Year Plan (1971-75) output of the chemical industry is scheduled to grow by about 60% compared with an increase of about 35% in total industrial production. Output of plastics and synthetic fibers is to double and an 80% increase is dated for synthetic rubber.

Two-thirds of the current output of chemicals is accounted for by plants in the Czech Lands—Bohemia and Moravia. Production in these areas is based to a substantial degree on local deposits of coal. The relative importance of Slovakia, however, is growing along with the increasing use of petroleum and natural gas as chemical raw materials. The largest petrochemical installation in the country is the Slovnaft combine near Bratislava, which produces ethylene and other petrochemicals from Soviet crude oil.

Although Czechoslovakia is an important producer of chemical equipment, a significant portion of petrochemical and other equipment and technology required for the industry has been purchased in Western Europe, Japan, and the United States. Equipment installed at the Slovnaft combine and elsewhere, for the processing of petroleum byproducts into plastics and other items, is largely of Western origin. Czechoslovakia also imports most major chemical raw materials and many finished products as well. Petroleum and natural gas are imported from the U.S.S.R., potassium salts from the U.S.S.R. and East Germany, sulfur from the U.S.S.R. and Poland, cellulose from the U.S.S.R. and Scandinavia, phosphates from the U.S.S.R. and North Africa, and soda ash and synthetic rubber from a number of Communist and non-Communist suppliers. However, surpluses of coke chemicals and derivatives such as dyestuffs are available for export, reflecting the fact that Czechoslovakia is one of the major producers of coal and coke in Eastern Europe. At present, Czechoslovakia is a net importer of chemicals but the regime hopes to redress the balance in future years by a rapid increase in exports of plastics and other newer chemical products.

Czechoslovak trade in chemicals is also scheduled to grow as a result of collaboration in chemical production among Eastern European countries. Under an agreement signed in 1971, East Germany will ship ethylene and propylene from a plant under construction at Boehlen to Czechoslovak plants being

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110014-8