2.1 to what extend did the GDR's economy stabilise after 1961

Question 1

what does NES stand for?

Answer 1

The New Economic system 1963

Question 2

name 2 reasons why the NES was launched

Answer 2

• the new found security of the Berlin wall gave the SED the opportunity to adopt and experiment with new policies.
• need for economic reforms that could help with innovation and efficiency- Eirich Apel (1965)

Question 3

what was the aim of the NES

Answer 3

• gov to retain control of overall economic power but more decision making allowed at lower levels.

Question 4

what were the positive outcomes of the NES

Answer 4

• introduced profit and by 1965 industrial production had risen by 43%
• focus on incentives
• need for scientific and technological developments.
• encouraged links with industry and universities.

Question 5

what were the negative outcomes of the NES

Answer 5

• managers didn’t have appropriate financial skills
• difficulty in obtaining necessary resources
• oppositions to NES from those who wanted a communist state- Brezhnev
• people deliberately sabotaged by breaking machinery or taking extended sick leave
• differences in wages led to more arguments and lack of consumer goods to buy.

Question 6

what does ESS stand for

Answer 6

economic system of socialism 1968-71

Question 7

what was the reason behind the ESS being introduced

Answer 7

• to be based more on communist ideology with more centralised planning with extension to trade and agriculture as well as industry
• placed more emphasis on developing computer technology
• high quotas

Question 8

what were the positives of the ESS

Answer 8

• GDR economy grew by 5.7% and GNP rose from 3.5% in 1960-1965 to 5.1% in 1965-70

Question 9

what were the negatives of the ESS

Answer 9

• desired progression was limited by a lack of resources
• desire to overtake the FRG placed emphasis on industry and not on consumer goods
• changing political climate- Czechoslovakia 1968 led to Brezhnev imposing more hard-line communist policies

Question 10

what was the name given to the policy of consumer socialism

Answer 10

• unity of social and economic policy

Question 11

what was the idea behind consumer socialism

Answer 11

• any increase in production would provide the capital needed to improve the social conditions in the GDR such as healthcare , education and housing.

Question 12

when did nationalisation occur

Answer 12

1972

Question 13

what was nationalised (why was it abolished)

Answer 13

private and semi private companies
- this sector created oner 11% of the GDR’s production and employed 500,000+ people
- the policy was abolished in 1976 due to the impact of the loss of these enterprises.

Question 14

what were the positives of consumer socialism

Answer 14

• production grew about 5% every year in the 1970’s up until the 80’s
• nearly every household had a TV and refrigerator
• 85% of population had a washing machine
• stabilised the economy allowing the state to maintain control

Question 15

what were the negatives of consumer socialism

Answer 15

• resentment at the unavailability of consumer goods were directed towards Delikat and Exquisit shops (gov run with high quality goods designed for elite party members- intershop products were unaffordable for the vast majority of GDR citizens.
• 1982 GDR found it increasingly difficult to secure credit - OPEC prises in 1973 rose oil prices which hurt the GDR as a country with few natural resources- solution was to borrow 2 million DM from FRG in 1983 and 1984.
• the money was placed in banks rather than into industry to convince Western nations that the GDR was a credible investment
• 1982 imports fell by 30% while exports rose by 9.1% - saved fuel was then sold to the west as were many consumer goods.

Question 16

why were their difficulties getting credit

Answer 16

• 1982 GDR found it increasingly difficult to secure credit - OPEC prises in 1973 rose oil prices which hurt the GDR as a country with few natural resources- solution was to borrow 2 million DM from FRG in 1983 and 1984.

Question 17

how did the GDR tackle the difficulties of getting credit

Answer 17

• solution was to borrow 2 million DM from FRG in 1983 and 1984.

Question 18

why was money placed in banks and not invested

Answer 18

• the money was placed in banks rather than into industry to convince Western nations that the GDR was a credible investment

Question 19

what impact did putting money in banks, and not investing it have on trading with the west?

Answer 19

• 1982 imports fell by 30% while exports rose by 9.1% - saved fuel was then sold to the west as were many consumer goods.

Question 20

when did the GDR become a member of COMECON

Answer 20

• 1950

Question 21

how much of the GDR’s trade was with the USSR and Eastern bloc?

Answer 21

• 76% of its trade

Question 22

describe the GDR’s status in the eastern bloc and why

Answer 22

• became the most influential country with the highest living standards

Question 23

what did the GDR supply the USSR with

Answer 23

• vital tech at well below market prices.
• electrical engineering at well below market prices.
• 45% of GDR’s exports was to the USSR

Question 24

what was the GDR’s trade with the USSR not profitable

Answer 24

• USSR was GRR’s largest trading partner but it wasn’t profitable because the products were never bought at real market prices and often paid with natural resources- USSR supplied 90% of GDR iron ore, oil and wood and 80% of its rolled steel and sheet metal.

Question 25

what was the GDR sheltered from in 1973

Answer 25

• OPEC steep oil prices by using GDR supplies but by 80’s the soviets reduced its oil supplies.