Along with the modification of the wage system, legal measures were enacted to tighten labor discipline. These measures provide for the imposition of fines up to 10,000 lei for violations of economic contracts and fines of from 50 to 1,000 lei for negligence while on duty; they oblige employees to make good the full amount of any damage for which they are responsible; and they enable the enterprise management to reduce workers' wages when standards of social behavior are not met. Penalties may be imposed by the enterprise director or the management committee. The only recourse open to workers is an appeal to the higher administrative bodies.
The broad concept of standards of behavior offers a wide latitude for the exercise of individual judgment by management. No criteria have been provided for determining the conditions under which wages may be cut or the maximum permissible amount of the wage cuts. The new rules thus introduced an element of discretionary exercise of punitive authority. They also deprived the accused of recourse to the courts, which had been available to them under earlier legislation.
INVESTMENT AND CONSTRUCTION
Industry has consistently received more than half the total investment in the economy. In the 1966-70 period industrial investment out of the state budget (centralized investment) amounted to 162.1 billion lei—a volume almost as great as that invested during the preceding fifteen years. Additional investment out of enterprise resources was only about 1 percent of the total and had been even less in earlier years. From 86 to 90 percent of the industrial investment was channeled into branches producing capital goods. Centralized investment in industry during the 1971-75 period is planned at 281.2 billion lei, or about 60 percent of the total planned investment.
Industries producing fuels and energy absorbed the largest share of investment, but their share declined from 51 percent in the 1951-55 period to 31 percent in the 1966-70 period. The high priority accorded to the development of the chemical industry was reflected in a doubling of that industry's investment share from less than 7 percent in the former period to 14 percent in the 1960s. Similarly, a drive for qualitative improvement in machine building and metalworking was accompanied by an increase in the proportion of investment devoted to that industry from a level of 7 to 8 percent in the 1951-65 period to 14 percent in the second half of the 1960s. Ferrous metallurgy absorbed about 10 percent of the investment in the fifteen-year period that ended in 1970. A need to expand exports of manufactured goods and to provide material incentives for the working population stimulated a rise of investment in the light and food industries to 13 percent of the total in the 1966-70 period, compared to a share ranging from 7.5 to 10 percent in earlier five-year periods.
About 48 percent of the industrial investment was absorbed by building construction and installation work, 37 percent was spent on machinery and equipment, and 15 percent was devoted to the increase of working capital. One-third of the investment in machinery and equipment from 1966 to 1969 was used for procurement abroad, that proportion having increased from about one-fifth in the 1956-60 period.
Although substantial progress has been made in the expansion of industrial capacity, construction of new industrial plants has been beset by many problems and has consistently lagged behind official plans. Inadequate planning, poor design, disregard of the limitations of the materials base and of potential markets, improper location, excessive size of projects, and long delays in project development and in construction have been among the difficulties most frequently discussed in the country's press. Completed plants often require years to attain the projected output level, and many plants have never reached it.
Large losses to the economy have also been caused by long delays in installing new equipment, much of it imported at a heavy cost in foreign exchange. At the end of 1969 the Grand National Assembly was officially informed that the volume of unused equipment amounted to 3.5 billion lei; some of the equipment had been lying idle for from ten to twelve years. Government officials realize the urgent need to improve investment performance, particularly in view of the large investment program planned for the 1971-75 period.
PRODUCTION
Industrial production in 1970 was 3.8 times larger than it had been ten years earlier, according to official data. This increase is equivalent to an average annual growth rate of 12.8 percent. A rise of 11.2 percent in industrial output was unofficially reported for 1971. In terms of Western statistical concepts and methods, the annual increase in industrial output was estimated at 11.5 percent for the 1960-68 period, compared to an officially reported growth rate of 13.2 percent. Industrial growth in Romania has been among the highest in countries of Eastern Europe.