| Economic Sector | 1960 | 1967 |
| Industry and handicrafts | 24.4 | 32.9 |
| Agriculture and forestry | 31.8 | 22.0 |
| Construction | 7.6 | 11.1 |
| Transportation and communications | 7.6 | 8.8 |
| Trade | 6.5 | 5.4 |
| Housing | 9.2 | 7.0 |
| Government and other services | 12.9 | 12.8 |
| Total | 100.0 | 100.0 |
| Source: Adapted from U.S. Congress, 91st, 2d Session, Joint Economic Committee, Economic Developments in Countries of Eastern Europe, Washington, GPO, 1970. | ||
Although there is no officially recognized unemployment, a substantial amount of underemployment is reported to exist in industry and, even more so, in agriculture. The reasons advanced by Romanian economists for this situation are the duty and the right of every citizen to work and the inability to achieve quickly full and efficient employment in a country that inherited a backward and predominantly agrarian economy with a large peasant population. Efforts toward obtaining full and efficient employment have been handicapped by the rapidly rising volume of investment needed to create new nonagricultural jobs. The average investment per nonagricultural job increased almost fivefold to 324,000 lei (for value of leu, see Glossary) from the 1951-55 period to the 1966-70 period, and a further 40 percent rise in cost was projected for the 1971-75 period.
PLANNING
As in all communist states, comprehensive economic planning has been a basic element of the PCR's dogma. Planning is conceived of as an indispensable tool for economic development. Traditionally, five-year and annual plans for all segments and aspects of the economy have been formulated by a central planning agency with the participation of economic ministries, trusts, and enterprises. Planning has proceeded from broadly defined goals set by the PCR to minute instructions for all economic enterprises. In line with the established priorities, the main planning effort has been devoted to industry.
The major problem in planning has been posed by the need to balance supply and demand, not only with regard to the final consumers but also at all stages of the production process and for each individual enterprise. This task entails detailed decisions on the allocation of thousands of different materials, machinery and equipment items, specialized labor skills, energy, and investment funds. With the expansion and growing complexity of the economy and, more particularly, of industry, the balancing task has assumed dimensions that defy solution by traditional means.
At the same time, the imposition of detailed operational prescriptions deprived enterprises of the freedom to exercise constructive initiative and of the flexibility needed to meet unforeseen contingencies. A failure by an enterprise to fulfill its planned assignment necessarily produces a chain reaction involving the production programs of enterprises dependent upon the missing output. Failures of this nature have been frequent.
The breakdown of the planning mechanism brought about a disorganization of the material and technical supply for enterprises, with adverse effects on productivity and output. It has been responsible for a general lag in the economy's performance in relation to official plans.
The deficiency of the traditional system of central planning was officially recognized in 1967, when a decision was made by the National Party Conference to raise the quality of planning to the level demanded by the needs of a modern industrial state. This aim was to be achieved by granting a larger degree of autonomy to individual enterprises while, at the same time, maintaining and even strengthening the directing role of the central plan. The prolonged and intensive discussion engendered by the PCR decision has brought to light many flaws and proposals for change but has not provided a clear insight into the current planning process.
Modifications of the traditional pattern have taken place as a result of organizational and administrative changes introduced after 1967. The intended adoption of a new system, however, that would take into account market relationships and give greater weight to the needs of consumers has been delayed by differences of views among economists and officials on essential elements of the system, by disagreement on the nature of such basic concepts as productivity, economic efficiency, and profit, and by the need for a prior reform of the price system. A draft of a new planning law was reported to be in preparation toward the end of 1971.
As a means of decentralizing planning and mastering the intractable supply problem, the task of coordinating requirements with supplies was delegated to the centrals (see Glossary), trusts, and other enterprise associations and, ultimately, to the enterprises themselves by a law on economic contracts enacted in December 1969. Under the law, industrial and trade enterprises must enter into contracts with suppliers for all products and services needed to fulfill the tasks of the next year's economic plan. In theory, the demands of final consumers for consumption and capital goods would determine the nature of the contracts through all stages of production down to the producers of raw materials. This has not been the case in practice.