gidly controlled by the PCR. A
variety of economic ministries within the governmental structure are
responsible for the administering of specific sectors of the economy,
but policymaking is a function of the Standing Presidium of the party.
The economy operates in accordance with five-year and annual plans that
are all-encompassing and binding on all economic enterprises. Some
attempts at decentralization have been made since 1968 in an effort to
increase initiative on the part of lower level managers, but
intransigence on the part of the hierarchy in releasing its hold has all
but nullified the lukewarm reform efforts.

In 1972 Romania was into the second year of its Five-Year Plan (1971-75)
and was beset by a host of economic problems. The planners had set high
goals for growth during the period, but past overemphasis on heavy
industrialization had left a residue of problems in all other areas.
Agriculture had been neglected, production of consumer goods had never
reached planned goals, and balance of payment deficits with Western
nations threatened the foreign trade base. In seeking political and
economic independence from the Soviet Union, the regime had placed
itself in a precarious position, which forced it to find ways of
becoming more competitive in world markets and fulfilling the basic
needs of its people at the same time it sought to mollify the
resentments of its COMECON partners and retain its ideological
commitments to socialism and ultimate communism. Despite its maverick
approach and its growing relations with the West, Romania was still tied
by treaty, ideology, and geography to the Soviet Union and to its
Eastern European communist neighbors.

CHAPTER 2

HISTORICAL SETTING

Romania's history as an independent state dates from about the middle of
the nineteenth century; as a communist state, from about the end of
World War II. The history of the Romanian people, however, is long,
complex, and important when considered in the context of the overall
history of the Balkan region. The origin and development of the
Romanians remain controversial subjects among Romanian and Hungarian
historians, whose arguments serve to support or deny claims to rightful
ownership of large areas within Romania's borders (see fig. 1).

Until the end of World War II Romania's history as a state was one of
gains and losses of territory and shifting borders. As the Ottoman
Empire in Europe receded, the Romanians fou