INTELLIGENCE MEMORANDUM
AVAILABILITY OF CONSUMERS' GOODS IN THE EUROPEAN SATELLITES
CIA/RR53
INTELLIGENCE AGENCY Office of Research and Reports
CONTENTS
Page
Fonrl
Trade In ConauBers1 Goods
3- Manufactured Consumers' Goods .and Housing
S. Expansion of tbe Availability of Consumers'. 10
Appendixes
Appendix A- Indexes of the Availability and Production of Consumers' Goods In the European
13
Appendix B. 17
Tables
1.. Average Daily Per Capita Caloric Intake in the European
Satellites,, **
2. .Estimated Trade of the European Satellites
with the USSR in Selected Consumers' Cools,
13 6
3* Index of Per Capita Production of Agricultural
Commodities for the European. 14
of Per Capita Production of Meat, Pats and Oils,
und Sugar for thc European Satellites, 14
of Per Capita Production of Manufactured
Consumers' Goods for the European Satellites,
15
CIA/RR
AVAILABILITY OF CONSUMERS' GOODS IN THE EUROPEAN SATELLITES*
gunaary
In general, tbe per capita availability or coasunerB' goods In the European Satellites has retained below the prevar scale of achievement In these countries.
Per capita production and availability of food and agriculture products In the European Satellites has remained, on the average, below prewar levels during the period in addition, the poor agricultural crop2 sharply reduced the availability of key foodstuffs, resulting in serious food shortages in Hungary, Rumania, Albania, and East Germany.
Prewar per capita levels of production of manufactured' goods in the European Satellites have, on the average, been met and exceeded. Bulgaria and Rumania, hovever, lagged In reaching the prevar level; there hasecline in Polish and Czechoslovak production2nd Easthas attained only aboutercent of the prevar per capita production. Both the quality and availability of the output of manufactured consumers' goods, moreover, appear to be below prevar levels, critically so In East Germany and Rumania. The reason for the lov availability ostensibly Is the export or these Items to the USSR, since there Is little trade with the Vest In these commodities.
In contrast to thc production of consumers' goods, the per capita production of construction materials rose quickly to above prevar levels after the beginning of thc postwar reconstruction program. The increased production of construction materials, however, has not resulted In the construction of enough housing to permit prewar levels of living acccemwdatlons, because of the extensive demands of nev Industrial construction, wartimeand rapid urbanization. These factors have created what appears tohronic housing shortage throughout thc European Satellites.
This report contains information available as of
Although food And agricultural production ore unlikely to exceed0 level In the neareturn to prewar levels of availability for otheroods appears to be contingent upon some combination of the following two policies: (l) aof the export of these items to the USSResumption of trade In consumers' goods with the Western world, which would enhance the terms of trade of the European Satellites,n Increased emphasis on consumers' goods production in the Satellites themselves. There Is recent evidenceevision in planned targets. Several decrees have been announced in the Satellite countries ordering an increased Investment in consumers' goods industrieseduction in the rate of growth In heavy Industry, togetherarked shift in the relative share of employment in consumers' goodc industries and heavy Industry.
1. Food Situation.
ood situation was probably the worst that theregimes In Eastern Europe have had to face in the postwar period. Unfavorable weather conditions throughout the greater port of Eastern Europe duringrowing season and,esser extent, Cosrnunlst agricultural policieshortfall In2 production of cereals (particularly corn In southeasternotatoes, sugar beets, vegetable oilseeds, and vegetables. The effects of the resulting food shortages duringood consumption yearanged from serious In Hungary, Rumania, Albania, and East Germany to only slight in Poland, Bulgaria, and Czechoslovakia. The only areas where famine may have occurred were In the normally food-deficit mountain regions of Albania snd Rumania, where the peasants are primarily dependent upon corn breadlbanian and Rumanian corn production2 was estimated to be onlyercent of normal.
Food shortages among the industrial workers wereby the Satellite governments by drawing either uponor (In the case of East Germany) upon supplementalfrom thc The production and availability ofagricultural commodities is presented In Tablethe average caloric consumption per person in theduring the prewar period and for the This table does not evaluate thc caloric Intake Thc sharp postwar decline in the consumption of meat,oils, and sugar notedas been
replaced by higher consumption of grain, grain products, and potatoes
The outlook forood consumption year as compareds somewhat brighter from the point of view of crop production. Production of thc major groin, potato, sugar beet, and oilseed crops3 has been estimated as being significantly above the production of these commodities Meat and animal fats (including butter) will continue to be in short supply, however, and by springhe shortage may be worse than3 except
ollows on p. 4. See also Appendix A,nd a, p. l'l, below. It should bf: noted tliat agricultural production estimates Inrc inclusive of agricultural stockpiles.
/
Average Dally Per Capita Caloric Intake a/ In the European Satellites, b//
Country
Albania
Bulgaria
Czechoslovakia
East Germany
Hungary
Poland
Rumania
Prewar
/
2fU83
8
As of Prewar
1,UU0
Percent
9
Ttie estimated Increase In the supply of bread, sugar, potatoes, and vegetables to urban workers probably will not be sufficient to allay their dissatisfaction with the composition of their food supplies, since shortages of meat and fats and oils will continue. The latter group of commodities is that most wanted and needed by the Industrial worker. In the prewar diet, grain accountedercent of the total, and meat, fate and oils, sugar, potatoes, and othor foods accounted for U6 percent. hesewereespectively, Thus, were the value of food production (see indexes in Tablen Appendix A) to attain prewar levels, the production would not contribute the same measure of consumer satisfaction.
2. Trade In Consumers' Ooods.
The poor agricultural harvest of the European Satellites2erious dislocation In the pattern of intra-Bloc trade In consumers' goods. The USSR was obliged to expand Its shipment of grain to the Satellites, which normallyet grain surplus. The Satellites were obliged to curtail shipments to other Satellites and to thc USSR snd to reduce drastically exports to non-Bloc countries. ndicates the trade situationelected group of consumers' goods for the2 through The Balkan Satellites, normally large exporters of grain and potatoes, exported negligible supplies of these products during the period. Indeed, Hungary and Albaniaet import status. Czechoslovakia end Bast Germany, normally food-deficit areas, were required to Increase substantially their Import of agricultural and food products.
Supplemental agreements have been concluded by the USSR,China, Bulgaria, and Hungary to provide East Germany with additional food, hides and skins, textiles, snd clothing during toe second half The USSR, specifically, has undertaken to increase food and cotton exports to Eastercent above the level provided by3 calendar year trade agreement.
Quantitative data ore unavailable at this time for the movement of agricultural commodities and light consumers' goods between Eastern Europe and the USSR. However, it is expected
ollows* ollows on p. 6.
Table 2
sof the Bur ope aaea vith the USSR In Selected Coneuaere'3 (Continued)
e. locludee eggai eee aleo
f> Includes bacon and Cutter.
g- Slx-saom goal.
a. Only edible oil* com Me red.
1. ortion of tbe vool exported fron tbe USSR to the European Satellites (Czechoslovakia andK*oy) la returned to tbe USSR in tbe fom of vool fabric. Tbe vool fabric which la returned to tbeppro* lnately li allllonillion cetera ln2 trade year) la comprised of finer tirades of vool thanxported by tbe USSR to tbe Satellites.
J. Tbe total Mt laport figure of tbe European Satellitea for ginned cotton doee not reprstent tbe exact trade picture, since aone of the cotton la returced to tbe USSR ln the form ofillion toillion metare In2 trade year). ercent of tbe total cotton cloth production of the Europeana exported to the USSR, 2 thla onouated to an equivalent of0 Betrlc tona of sinned cotton. Statiatlce for tbe cotton trade are baaed on2 calendar year.
because of Improved crop conditions that larger quantities of grains, sugar, oilseeds, and tobacco will be moving from surplus arcaa to deficit areas within Eastern Europehan moved-
It Is probable that, quantities of agriculturaltraded among the European Satellites and between the Satellites and the USSR will approximateevel. One exception may be the trade In grains between Eastern Europe and the USSR. The USSR will not be required to export souantity of grain to Eastern Europes* There probably willovement of grain from Eastern Europe to the USSR. This movement Is to some extent to reinforce Soviet feed requiremcnto, but,arger extent, the movement will result In transshipment of the groin by the USSR.
Consumers' Goods and Housing, j
picture of manufactured consume ro1 goods and housingore difficult problem for analysis than the food and agricultural situation. Per capita productionepresentative sample ofconsumers' goods which Included an estimate of manufactured food items (see Tablen Appendix A) Indicates that thereapid restoration of prevar production levels tin Czechoslovakia,* ungary, and Poland. Bulgaria and Rumania did' not achieve^ prevar roduction levelsnd lt Is highly questionable "whether or not Rumania vlll actually equal prewar productionEast Germany probably will be unable to attainercent of Its prewar consumers' goods output by year Although the East German areaurplus of consumers' goods end items prior to the war, it Is believed that present levels of production fall veil short of the local requirements of the prevar area.
Per capita production of the light and textile industries tins followed much the same course outlined above for the entire consumers' goods sector (as evidenced byn Tbe light and textile industries haveore pronounced tendency to declinen countries which had attained relatively high postvar production indexes In manufactured consumers' goods. Simultaneously, there has occurred an exceedingly rapid rate of growth In this sector for those nations vhlch had displayed poor
below. ** elow.
postwar production records. It is difficult to reconcile those tendencies in terms of the pattern of Industrialization and planned production for Bant Germany. The rocent rapid rate of grovth In Bulgaria and Rumania may be partially accounted for as the result of an expanding Industrial base.
Woolen textiles and shoes, tvo major items of importance Inconsumers' goods field, vere in short supply. availability of voolen textiles for thc current year Isto Improve unless external purchases of raw material arethe end of the year. As for shoes, no single Easternwith the exception of Czechoslovakia, has an annualavailability of manufactured shoes higherairas compared toairs per person in the USSR. change Is expected during the next year. Inof the shortage of leather, the quality has declined, andwith canvas tops and leather soles ere being produced inall-leather
An Increase in the production of construction materials has been Included in the analysisartial Indicator of the level of housing construction. In every European Satellite, present per capita levels of production of construction materials exceed prevar levels (seen For most countries, this higher level of output dates from .the Immediate postwar period. Wartime destruction of housing, plus thc shift of large numbers of workers from the rural (agricultural) labor force to the urban (industrial) labor force, created an acute shortage of urban housing. Although substantial progress has been Bode in the vay of nev housingthere remains an acute bousing shortage In urban Industrial areas throughout the European Satellites.
* elow.
To an outside observer, shortages inoods in Eustcrn Europe would not be apparent Immediately. Although the list of Items In short supplyong one and should be extended beyond food and clothing to Include, In some of the countries at least, soap, drugs, and various household goods, most of these Items arc to be found on the shelves of the stores, although often of such quality as to be virtually worthless.
To the average resident of the Satellite countries, however, consumers' goods shortageo are all too real. The prices ofsupplies of manufactured consumers' goods place these items beyond the Income of the average worker's family. DespiteIncreases In the general level of production and national Income, realise from near starvation levels in the early postwar yearshave improved almost Imperceptibly. 4/ The present level of real wages Is probably belov prewar levels ln every country of the Satellite complex with the possible (but not probable) exception of Czechoslovakia. Limited price reductions have seldom kept pace vith the expansion of production norms. Thus the flow of goods available to the worker from bis income has changed but little.
h. Expansion of the Aval lability of Consumers' Goods.
An expansion ln the availability of consumers' goods seems to be contingenteveral factors, which frequently are mutually exclusive. There must be an expansion ln thc supply of consumers' goods mode available within the Satellites. This condition may be achieved either by increased Satellite production. Increased Imports, or decreased exports of consumers' goods. Any expansion of domestic product loo will be delayed by the necessity to Increase investment in theoods Industries - Such an. expansion will necessarilyeduction in thc rata of'growthn most cases, of the level of employment ln heavyome evidence has *been presented to indicate that the latter change has been Initiated ln the Satellite area. Revision of plan targets in Hungary, East Germany, and Rumania in the summer3 has pointed toward an effort to increase agricultural and light industrial output. Bulgaria, Czechoslovakia, and Poland haveeries of agricultural end consumers' goods decrees pointed toward an increase in the production of consumers' goods end Items.
Increased Satellite imports of manufactured consumers' goods ore contingent upon an increased domestic availability for export of all types of consumers' goods, especially agricultural commodities. The heavy industry requirements imposed upon the Satellites by the USSR eliminate any likelihood of the export of machinery or other heavy industry products to the Vest. Thus It would appear that ao imports of manufactured consumers1 goods or of raw materials for the consumers' goods industry of any significant magnitude will beuntil there hasubstantial increase In the internal output of agricultural and Ught industrial enterprises.
The present consumers' goods export of the European Satellites Is carried on almost entirely vithln the Soviet Bloc. For this reason. It is likely that cessation of the traffic vould materially Improve the availability situation in any given country if the exports vere diverted to the free International market, although the extent of the resultant improvement can not be estimated, because the magnitude of lntra-Bloc trade in consumers' goods Is uncertain. Diversion of the exportable surplus of agricultural coanodltles and manufactured consumers' goods to Western markets vould greatly enhance the terms of trade* on vhlch the goods vere exchanged. Better terms of trade vould mean, Inigher scale of living for the exporting nations.
1
The concept "terms of trade" applied to international exchange indicates the exchange valueiven export surpluseries of Import alternatives. Terms of trade are "more favorable" the higher the internal value of an Import alternative. Differences in the internal value of Import alternativesunction of differing intensity of demandiven product In the various nations.
Jn g
I
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BLANK PAGE
APPENDIX A
INDEXES OP TUK AVAILABILITY AND PRODUCTION OF CONSUMERS' GOODS Dl THE EUROPEAN SATELLITES
The population indexes used to prepare this report have been computed from the most recent branch estimates contained in the ORR Estimates File. The Hot of comcdities considered in each sector and the ccoBtant prices used to weigh these commodities werefor the ORR contribution to/ Production estimates are based on the postwar territorial boundaries for the prewar base-year given, as well as for the reported postwar years, and are derived from branch estimates prepared for the ORR contribution tos revised for use In ORRt. The original and revised contributions are contained iniles and are scheduled to be published in ORR Project lh.i.
Table 3
Index of Per Capita Production of Agricultural Commodities for tne European
.2
Table 4
Index of Per Capita Production of Meat, Fate end Oils, and Sugar for the European
Index of Per Capita Production of Manufactured Consumers' Goods for the European
Table 6
Index of Per Capita Production of the Light and Textile Industry for the European
?
Table 7
Index of Per Capita Production of Conatruction Materials for the European
)
Original document.
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