Common and Contrasting Features of the Reforms of the 1980s

In the 1970s the economies of the four countries grew quite rapidly in the first half, but in the second half, and even more in the beginning of the 1980s, they took a turn for the worse (see Table 7.1). Only in 1983 or 1984 did the countries experience some recovery. The decline was caused by both internal and external factors. In all countries the sources of extensive growth were largely exhausted. Labour shortages were compounded by declining growth rates in the working age population, a phenomenon which had started earlier and which had turned into negative growth rates in 1976–80 in general and in Czechoslovakia in the beginning of the 1980s. Increasing shortages of raw materials and energy were another important factor. The extraction of raw materials and fuels in the USSR, which supplies the other countries of CMEA, was more and more shifting to the Eastern regions with unpleasant climatic conditions and often difficult access to deposits; therefore productivity in the extracting industry was declining and cost per unit of production, also due to high transportation costs, was increasing. Expectations of more economical use of raw materials remained mostly behind planned targets. Though material intensity of products is much higher than in advanced industrial countries, CMEA countries have not managed to reduce it at the pace it is being reduced in the Western countries, one reason being that the former are lagging behind in the development of high technology industries which are less material intensive (Drucker, 1986).