Romania Economy Between 1960 and 1975

By | December 23, 2021

Since 1968 the republic of Romania has been divided into 40 districts (judete), 236 cities (oras), of which 47 are considered major urban areas, i.e. municipalities, and 2706 municipalities. The capital Bucharest (1,934,025 residents In 1977 in the urban agglomeration) is a municipality with a district status (see table).

Bucharest, by far the most conspicuous center, continues to exert a strong attraction on the whole country, but the urban realities of Cluj-Napoca are also notable and increasing (262,421). Timişoara (268.785), Iaşi (264.947), Costanza (256.875) as well as Galati (239.306) and Braşov (257.150), the important industrial center which has taken back its original name which in 1948 had been changed to Orasul Stalin. For Romania business, please check cheeroutdoor.com.

Economic Conditions. – Agriculture retains a leading role. The traditional cereal productions are important: wheat (67,300,000 q in 1976) corn (117,000,000 q); the quantities of barley, rye, oats are also conspicuous, with strong increases compared to fifteen years ago. Potato cultivation (31,500,000 q in 1976) is also on the rise, but above all the recent expansion of tomatoes (62,000 ha and 12,000,000 q), fruit growing and viticulture should be noted. The cultivation of sunflowers is also expanding (540,000 ha and 8,000,000 of q), like sugar beet (285,000 ha and 70,000,000 of q).

The zootechnical patrimony is strongly increased: in 1976 it was made up of 5,912,000 cattle, 8,813,000 pigs, 14,310,000 sheep and goats, as well as poultry for over 79,000,000 heads. Only horses (563,000 head) decreased due to agricultural mechanization. There is also a strong increase in the production of natural silk (800,000 kg of cocoons in 1972). In 1971 there were 4,601 collective farms, compared to only 200 state farms (there were 731 in 1966) and 772 agricultural mechanization stations, equipped with over 80,000 tractors. Collectivization has affected more than 90% of arable land, but in recent years the National Union of Agricultural Cooperatives has encouraged the autonomous self-management of farms, even in the context of planning. In 1971 the irrigated areas extended for 956,000 ha.

Oil production reached 14,652,000 t (1977) and natural gas was extracted for as much as 29,834 million m 3, while the extraction of hard coal is still important (7,368,000 t in 1977). As part of a decisive industrialization policy, an attempt was made to spatially distribute the interventions in the various sectors to overcome the strong contrasts existing between the various regions. The location of the new industrial plants was based on three different criteria: the proximity to the places of production of the raw material or to the areas of consumption (this is the case of the refineries in Ploieşti and Tîrgovişte, the factories of building materials in Bucharest, of Cluj, of Braşov); the creation of industries in regions with abundant labor and limited resources of raw materials (light industry, textiles and clothing: Botoşani, Iaşi); large investments (practically over half of the most recent industrial units) in areas with few resources and low population density, where industrial and urban development poles are needed (Dobruja, Moldova, upper Oltenia). These achievements have led to massive interregional migratory flows, and the tendency of population exodus from the countryside to the cities has generalized.

Tourism has recently undergone a strong development (beaches of the Black Sea, Transylvania, historic centers, mouths of the Danube) also due to the improvement of communication routes. In 1976 the Romania had 12,945 km of national roads, of which nearly 10,000 km were adequate for current traffic. Bǎneasa for international traffic and Otopeni for internal traffic are the two airports in Bucharest, the largest in the country.

Romanian foreign trade has evolved and diversified considerably in recent years; in the past exporter of agricultural and mining products and importer of machinery and finished products, Romania enjoys a more balanced commercial exchange, also exporting machinery and numerous processed goods. The trade balance is essentially in balance (1971; imports for 12,616 mil. Lei, exports 12,606; 1976: imports 30,294, exports 30,504). The main partners are no longer only the USSR or the countries of Eastern Europe, but also those of Western Europe, and even the People’s Republic of China.

Economy. – In the period 1960-75, Romania achieved one of the fastest industrialization processes in the world, on a par with Japan. The conditions for take-off were far behind the average of the other European socialist countries. The index of active population in agriculture was 65.6% in 1960; and the export of raw materials reached more than 70% of the total exports. The state of underdevelopment in which the economy found itself stemmed in large part from the economic policy imposed on it by the socialist community. For it, given the abundance of raw materials and oil in the soil, it was convenient for Romania to remain a supplier country to Eastern Europe, without undergoing an accelerated industrial transformation. With the 1960s, the Romania, refused this subordinate economic role, has succeeded in setting up a multilateral industrialization. Thus he began to exploit his wealth for himself.

The availability and variety of raw materials, exceeding the requirements, and the surpluses of agricultural products that could be placed on Western markets, made it possible to buy machines and industrial plants everywhere. In fact, the Romanian development model was planned, combining the traditional Soviet-branded extensive method with the intensive one. According to the first method, the maximization of production was first pursued without worrying about the cost; the use of capital in heavy industry reached shares exceeding 80% of investments, the stock of manpower was abundant and low cost. According to the other method, thanks to the existing conditions, it was possible to choose the expansion of the most modern industrial sectors, such as electrical engineering, electromechanics, chemistry. Establishments were created equipped with the most modern technological systems, purchased in the West, where the use of manpower could be contained. The higher labor productivity of the leading sectors compensated for the much lower productivity of the light and food industries, where equipment had remained behind, semi-artisanal. As for agriculture, after an initial period of uncertainty, collectivization was resumed and completed by the mid-1960s, without, however, increasing investments in the sector at the same time. where the equipment had remained behind, semi-handcrafted. As for agriculture, after an initial period of uncertainty, collectivization was resumed and completed by the mid-1960s, without, however, increasing investments in the sector at the same time. where the equipment had remained behind, semi-handcrafted. As for agriculture, after an initial period of uncertainty, collectivization was resumed and completed by the mid-1960s, without, however, increasing investments in the sector at the same time.

Throughout the 1960s, the allocation of capital continued to be primarily directed towards the expansion and strengthening of the industrial base. The goal was the transformation of export-import. The Romanian economic system had to be enabled to extract, refine and even use oil at home, that is, to become an exporter of quality industrial products on the world market. A fairly unscrupulous economic policy was moving in this direction, autonomous from the East and the West. The urgency and aims of multilateral industrialization also marginalized the problem of management reforms. The modest innovations in the direction of businesses had highlighted the unavailability of the still rigidly centralized system,

And therefore from the reform movement underway in Eastern Europe and the USSR only the initiatives that ensured greater control over the overall functioning of the economy were borrowed. So after 1970 industrial consortia were also formed in Romania that group together small and medium-sized companies in order to better plan their profitability and methods of material incentives were adopted. Despite the concentration of efforts and attention to technological progress, in recent years, the Romanian economy has also reported a decrease in the rate of growth of industrial and agricultural production. Consequently, the 1971-75 plan very realistically envisaged a more reduced rate of increase in national income, a lower industrial growth, supported, however, by a strong share of investments so as to compensate for the fall in capital efficiency. At the same time, an intervention was planned in the agricultural sector, to start up the hitherto neglected mechanization.

But the readjustment of the economy was first reconsidered in the light of the Western oil crisis, and then overwhelmed by the disastrous earthquake of 1977. Romania was forced to borrow heavily from abroad and chose to do so with the USSR and the socialist community. It is difficult to predict what consequences its model of multilateral industrialization will suffer.

Romania Economy