Page:NATIONAL INTELLIGENCE SURVEY 18; CZECHOSLOVAKIA; THE ECONOMY CIA-RDP01-00707R000200110014-8.pdf/9

APPROVED FOR RELEASE: 2009/06/16: _CIA-RDP01-00707R000200110014-8 projects, held the line on government expenditures, and ordered a general price and wage freeze. Labor productivity has remained a serious problem, not merely because of a shortage of labor (employment has only grown at an average annual rate of 1.4% since 1960) but principally because of gross inefficiency in labor management and problems in attracting surplus workers to sectors with job vacancies.

The growth in agriculture has been no less discouraging. It was only in the mid-1960’s that output finally recovered to pre-World War II levels and this was only achieved with heavy govemment investment and high incentive payments for agricultural products. The high custs resulted directly from forced collectivization, which left peasants with less incentive to produce and with far greater opportunities to cheat the state. During the 1960’s higher farm prices, improved management, increased supplies of fertilizer, and better seed and breeding stock began to pay off in the growth of output, but agriculture remains a high-cost operation.

Czechoslovakia's strategic supply position is shown in Figure 1. Except for sizable domestic reserves of coal and uranium, the nation is heavily dependent on foreign sources of raw materials. The U.S.S.R. supplies over 40% of all raw material imports, particularly crude oil and ores for the heavy industry sector. The less-developed countries supply raw materials for Czechoslovakia's textile industry—wool and cotton, among others. The government has become increasingly concerned with future raw material supplies and is contracting for future supplies of ores and petroleum from Latin America and the Middle East.

B. Sectors of the economy

1. Agriculture, fisheries, and forestry (U/OU)

a. Agriculture

Although Czechoslovakia has a highly diversified agriculture, its development under Communist management has been held back by lack of inputs,