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Increased Economic Production - Coggle Diagram
Increased Economic Production
1960s
Significant increase in availability of household items like televisions and fridges. More than other Eastern bloc states.
Inferior quality to the basics in the FRG such as clothing, shoes, fruit and chocolate so people became dissatisfied.
SED were not solely to blame, they blamed the USSR for scale of reparations after WW2, others blamed the division as the West's responsibility.
1970s
After 1971, SED focused on trying to raise standard of living through consumer socialism and welfare.
Created the 'Unity of Social and Economic Policy' to increase production to provide capital to improve social conditions like healthcare, education, housing.
1972 - All private and semi-private businesses were nationalised through economic centralisation.
Private sector created over 11% of GDR production, small technical goods, employed over 500,000 people.
Loss of the private sector enterprises restricted Honecker's impact so in 1976 the policy was reversed.
Focus on social aspects greatly improved welfare and housing but meant a consistent underinvestment in industry.
Economy stabilised, industrial production grew steadily at 5% each year in the 1970s.
OPEC Crisis 1973 - raised world oil prices. GDR had few natural resources so the impact was to reduce GDR's purchasing power for exports.
1980s
Consistent underinvestment in industry meant serious decline in the 1980s.
By the 1980s, nearly every household had a television and fridge, 85% had a washing machine.
1982 - GDR found it harder to secure credit, a slowdown in retail trade caused shortage of consumer goods.
Led to full-blown liquidity crisis, rising production costs, increasing state expenditure, mounting interest rates on debts and failing trade, led to GDR's inability to borrow money.
Frantic and secret negotiations with FRG to secure loan of 2 billion Deutschmarks (DM) in 1983 and 1984.
This cash was placed in banks rather than used for industry to give the illusion that the GDR was still a credible investment.
1982 - Imports fell by 30% while exports rose by 9.1%, thousands of things vanished from shops, energy cuts to save fuel which was sold to the West, all to help the GDR function.
Inferior quality of consumer goods is highlighted by the Trabant. A very expensive car but deliberately underproduced and often broke or malfunctioned.
Delikat and Exquisit
Resentment of East Germans at unavailability of consumer goods was aimed at Delikat and Exquisit shops.
Government run shops that sold high-quality and luxurious goods such as Dresden china.
Designed for elite Party members and accepted East German currency but were unaffordable to the majority of GDR citizens.
Intershops sold Western goods at lower prices than in West Berlin or the FRG but only accepted Western currency which couldn't be easily obtained in the GDR.