Basic HTML Version
-7-
grim. East Germany had its own "economic miracle" during the 1960s.
But the bubble burst with the oil crisis in 1973-4. Things have
been flat ever since.
If it weren't for direct and indirect economic payments from
West Germany, the GDR would be in sad shape. Still, it has run up
a $2.6 billion deficit in trade with Bonn since 1975. Trade with its
big partner in the opposite direction -- the Soviet Union -- is just
as bad with a yearly deficit of $1 billion.
Despite the various built-in advantages accruinq to the GDR in
"intra-German" trade, the gap in living standards between the two
parts of Germany continues to widen. In 1961 -- the year in which
the infamous Berlin Wall was constructed -- real wages in East Germany
were 76% of those in West Germany. Now they are 50%. Productivity
has also slumped to about half the West German level.
Worst of all, especially for the politicians and technocrats
who run the eastern regime, is the fact that everyone in East Germany
knows how much worse off he or she is than the average citizen of the
West. Every evening, over ninety percent of the people of East
Germany watch West German television. Each year about eight million
West G.ermans visit their relations in the East, bearing personal
information about life beyond the barbed-wire fence.
East Germany's rulers have tried various methods to skirt the
limitations of their own economic system, without corrupting it
completely, in order to satisfy pent-up consumer demands. East
German citizens have been permitted to obtain Western currencies and
to buy Western goods in a network of so-called "Intershops," places
usually run in the Communist world for foreigners. As a result the
coveted West German mark has become virtually the second currency
inside the country. Many craftsmen and those doing "moonlight" work
ask for payment in deutsche marks.
Reunification Talk Surfacing
The growing disparity between the two Germanys is causing some
people to question some of the long-held assumptions about the "German
Problem. "
The division of the German nation into two separate states -
the one allied with the U.S.-led West and the other incorporated
into the S�:iet-led Eastern Bloc -- has come to be taken for granted
by most of
ii•
world. Nevertheless, this division -- and in fact,
the division of Europe as a whole -- is artificial and unnatural
and, by its very nature, inherently unstable.
The reunification of Germany is not immediately around the corner,
but the certainty of its occurance is drawing closer all the time.
Dramatic shifts on the world scene -- especially the opening to
the West of Communist China, and the paranoia this trend produces in
Moscow -- will have a great bearing on the German situation. Note
this report from the "International Outlook" section of the January 8,
1979 issue of Business Week: