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The text below might contain errors as it was reproduced by OCR software from the digitized originals,
also available as Scanned original in PDF.BOX-FOLDER-REPORT: 6-6-165 TITLE: The Fourth Five-Year Plan (1961-1965): Success of Failure? BY: RD DATE: 1966-8-12 COUNTRY: Bulgaria ORIGINAL SUBJECT: Bulgaria --- Begin --- RADIO FREE EUROPE Research EAST EUROPE BULGARIA 12 August 1966 THE FOURTH FIVE-YEAR PLAN (1961-1963): SUCCESS OF FAILURE? Three months before the Ninth Congress of the Bulgarian Communist Party is scheduled to convene,  the Central Committee has informed the public about the "basic results of the development of the national economy during the 1961-1965 period" and also released for purpose of nationwide discussion, the directives for the new five-year plan (1966-1970). Both the report on fulfillment of the Fourth Five-Year Plan and the directives for the Fifth Five-Year Plan (adopted at a Central Committee plenum on July 12)  were published in the press of July 30. The present paper will examine some of the main results of the plan just completed; a second Background Report dealing with the directives for the new plan period will be issued separately. The Central Committee announcement on the fulfillment of the Fourth Five-Year Plan (1961-1965) shows that its main targets were not met. The most serious non-fulfillment was registered in the targets for national income and rural production, but in other branches of the economy, too, the plan goals could not nearly be reached. Before discussing the Fourth Five-Year Plan in more detail, a word should be said about the figures used in this analysis, almost all of which are taken from regime sources: Through 1960, the year which represented the base figure for the increased targets of the 1961-1965 five-year plan, the figures expressing leva values were given in constant prices. Since 1960, however, the Bulgarian authorities almost nowhere indicate whether the values in the statistical ---------------------- (1) The opening session of the Ninth Party Congress is to take place on 8 November 1965, according to an announcement published in the Bulgarian daily press on 26 March 1966. (2) Rabotnichesko Delo, 13 July 1966. [page 2] figures they publish are in constant or current prices. This is also the case with the figures just published on the fulfillment of the 1961-1965 plan. It is, therefore, safe to assume that, since 1960, the Bulgarian planners and statisticians have been using current prices in their publications, thus being able to show, due to the steady price increases, a more favorable growth rate and better achievements. Following a statement on the important role played by "fraternal collaboration" with the socialist countries in Bulgaria's successful development on the road to socialism and the observation that during the past few years Bulgaria had "deepened and widened its friendship and collaboration with all socialist countries, and especially with the Soviet Union,11 the Central Committee report gives the following data on the fulfillment of the five-year plan which ended in December 1965 National Income The directives on the Fourth Five-Year Plan provided for an increase of the national income in 1965 by about 60 per cent as compared with 1960.  However, the announcement says that, during the past five-year period, the national income grew by 41.5 per cent.  In other words, national income fell short of the planned target by almost one-third. The most important factor in the non-fulfillment of this target was, no doubt, the failure to meet the rural production targets during the 1961-1965 period. The share of the rural economy in the national income still represents about 33 per cent.  Capital Investments The plan provided for capital investments (limited and non-limited) during the years 1961-1965 to reach a total of 8,215 million leva.  According to the announcement, however, capital investments during the past five years actually amounted only to 7,500 million leva.  ---------------------- (3) Rabotnichesko Delo, 13 May 1962. (4) Ibid. 30 July 1966. (5) Thirty-three per cent in 1964 (Statistical Yearbook 1965, P.96) (6) Rabotnichesko Delo, 13 May 1962. (7) Ibid. 30 July 1966. [page 3] Industry The Central Committee announcement says that total industrial production in 1965 was 73 per cent greater than that of 1960. This compares, the report states, with a 70 per cent increase envisaged in the directives on the 1961-1965 plan. Thus the regime claims a slight over-fulfillment of the plan in this area. However, the directives on the Fourth Five-Year Plan (1961-1965) actually provided for an increase of industrial production by "not less than 70 per cent" over 1960,  and Stanko Todorov, in his report on these directives, added that this meant an average annual increase of 12 per cent.  As the following table shows, only in 1965 was the planned annual increase of 12 per cent fulfilled and even slightly over-fulfilled. These figures, officially announced for each of the five years, clearly show that the five year plan for industrial production could not be quite fulfilled. 1961 achieved increase over 1960 9.9 per cent  1962 achieved increase over 1961 11.1 per cent  1963 achieved increase over 1962 10.0 per cent  1964 achieved increase over 1963 11.1 per cent  1965 achieved increase over 1964 13.7 per cent  The announcement does not give a detailed breakdown on the output of the main industrial products during the 1961-2965 period. But it does include statements which point to non-fulfillment in the following key industrial sectors: a) The Central Committee reports that the production of electric power in 1965 reached more than 10,000 million kwh. (15) The --------------------------- (8) Rabotnichesko Delo, 13 May 1962 (9) Ibid., 12 May 1962. (10) Ibid., 28 January 1962. (11) Ibid., 27 January 1963. (12) Ibid., 31 January 1964. (13) Ibid., 30 January 1965. (14) Ibid., 29 January 1966. (15) According to the announcement of the Central Statistical Department, the exact figure for 1965 is 10,230 million kwh. (Rabotnichesko Delo, 29 January l966.) [page 4] five-year plan, however, provided for electric power production to reach 11,250 million kwh by 1965.  b) It is admitted that, "because of some shortcomings in the organization of work, the construction of some production capacities of the Kremikovtsi metallurgical combine were delayed and the targets in the sphere of ferrous metallurgy were not fully achieved." A comparison of the directives on the 1961-1965 five-year plan with the official announcement on the fulfillment of the 1965 annual plan demonstrates, however, that this is a gross understatement: less than half of the planned production of steel and rolled iron could be achieved,  The following remarks in the announcement also show that the general development of industry during the 1961-1965 period was not satisfactory: -In some spheres of production, new products, new technology, new production capacities and economic indices were only slowly adopted and made use of. The necessary efforts were not made every-where to save raw materials and power and to make efficient use of production funds. -Also insufficient were the efforts to improve quality and to broaden the production assortment, as well as to supply the population with industrial services. -The achievements in the development of the country could have been even greater if all the possibilities of the national economy had been fully utilized and if certain shortcomings in the management of the economy had not been allowed. Agriculture The greatest failures in the fulfillment of the five-year plan targets have been registered in agriculture. The directives for the 1961-1965 plan provided for total rural production in 1965 to be 45 to 50 per cent greater than that of 1960.  -------------------------- (16) Rabotnichesko Delo, 13 May 1962. (17) Planned for 1965 by the five-year plan (Rabotnichesko Delo, 13 May 1962): 1,400,000 tons of steel and 1,000,000 tons of rolled iron. Produced in 1965 (Rabotnichesko Delo, 29 January 1966): 588,000 tons of steel and 431,000 tons of rolled iron. (18) Rabotnichesko Delo, 13 May 1962. [page 5] The announcement says that rural production in 1965 had increased by "about 17 per cent" over 1960, However, data previously released by the regime show that the growth was actually even smaller. Figures published in a leading article in Rabotnichesko Delo indicated that the increase between 1960 and 1965 was only 15.1 per cent.  The failure in rural production is admitted by the Central Committee announcement as follows: Shortcomings were allowed in the organization and the planning of the rural economy. As a result of this, some production reserves and possibilities were not utilized. The plan for the production of some rural products was not fulfilled. Separate figures on agriculture were released only for irrigation, and they show that the targets in this area also could not be fulfilled. Whereas the directives had provided for the area under irrigation to reach 1,050,000 hectares by 1965, the announcement says that the total irrigated area in 1965 amounted to almost 920,000 hectares. Trade There was also underfulfillment of the five year plan targets for both foreign and domestic trade, though by comparatively smaller margins. a) The total volume of foreign trade in 1965 was, according to the Central Committee announcement, "about 75 per cent" over that of 1960, while the directives had provided for an increase of 80 per cent.  In this connection, it must be borne in mind that, in three of the five years, the Bulgarian trade balance was strongly negative. Only in 1961 were exports and imports almost balanced, --------------------- (19) According to Rabotnichesko Delo of 19 February 1966, total rural production, expressed in value, increased from 2,536,000,000 leva in 1960 to 2,919,000,000 leva in 1.965 -- i.e. by 15.1 per cent. (20) Rabotnichesko Delo, 13 May 1962. (21) Rabotnichesko Delo, 13 May 1962. [page 6] and in 1965 exports slightly exceeded imports.  b) In internal trade, the announcement states, the retail goods turnover in 1965 was "more than 40 per cent" higher than in 1960, whereas the directives stipulated a 45 per cent growth.  Since the statistics on retail goods turnover are usually given in current prices, it is obvious that part of the claimed increase was due to the increase of many retail prices during the period in question. Conclusion When the directives 0n the Fourth Five-Year Plan were published, it was generally felt that the ambitious targets would impose additional strains on the Bulgarian economy, already under stress, which clearly appeared to be beyond its current abilities. This impression has now been shown to be correct. As the above survey has clearly shown, the main targets of the 1961-1965 plan were not fulfilled. Despite its desire to present a rosy picture of the Bulgarian economy to the Ninth Party Congress, the Party Central Committee has been forced indirectly to admit this failure. It singled out as a significant reason for these shortcomings, "the discrepancy between the level of development if the economy and the old system of management of the national economy" and the "shortcomings in the sphere of material incentives and in the use of the economic laws of socialism." The results achieved in implementing the Fourth Five-Year Plan again show that continually overstrained targets are not always purposeful, and can, in many cases, even serve to have a discouraging effect on those whose task it is to fulfill them. Moreover, the regime itself gains nothing: by setting at the outset unrealistic targets which cannot be met this is forced, directly or indirectly, to admit failures, instead of being able to point with pride to genuine achievements. (Bulgarian Unit) ------------------- (22) Bulgarian Exports and imports 1961-1965 (in million leva); Exports Imports 1961 775.2 779.2 (Stat.Yearbook 1964, p.300) 1962 903.9 918.1 (Stat.Yearbook 1964, p.300) 1963 975.8 1,091.9 (Stat.Yearbook 1964, P. 300) 1964 1,146.2 1,243.0 (Stat.Yearbook 1965 p.298) 1965 1,251.0 1,189.0 (preliminary figures; Vanshna Targovia No.4, April 1966.) (23) Rabonichesko Delo, 13 May 1962.
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