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Issues with the economy in the 80s - Coggle Diagram
Issues with the economy in the 80s
Trade
20% of exports were to the FRG and all trade was free of quotas & tariffs- inter German co-operation prolonged the GDR's existence as FRG managed debt levels
Lacked exports. Shurer Papier report in 1989 said exports needed to increase by 500% to stabilise debt
heavy industry exports dropped by 30% from 1986-1988
sold used oil to the West to gain hard currency but had to use inefficient brown coal
Industry/ economy
Quantity over quality
Economic growth fell to 1.5% between 1982-85
owed Dm 40 million in loans to the West that even Gunter Mittag was unaware of
spent 8% of total spending on defence
bartering due to lack of consumer goods introduce a second economy- highlighted deficiencies of economy
'perhaps bags' people took these to stores as they couldn't always get what they wanted for months at a time and had to queue for basics
Living standards
Opposition was minimised as spending ensured a healthy workforce- spending on health & welfare increased to DM 112.3 million in 1985
Heavy industry contaminated cities and pollution was the worse in Europe. Cities like Bitterfeld were highly contaminated and put a strain on healthcare- ill health reflected failing economy
Tried to improve consumer goods in the 1970s- Honecker ordered factory outputs to be 5% consumer goods- led to poor quality
often accidents in factories from unsafe machinery- strain on healthcare
Five year plan
1986-90
attempt to address the issues by acknowledging internal weaknesses- housing shortage
aimed to modernise over a million homes
quantity > quality so goods didn't improve
focused on new technologies to compete w/ the West but failed to close the gap between them