plan
that is intended by the leadership to advance the country on the road to
industrialization and to increase its economic potential sufficiently to
make the economy one of the most dynamic in the world. This goal is to
be attained mainly through a continued high rate of investment, a
significant improvement in productivity, and an expanded and more
efficient foreign trade. Although significant strides in industrial
development had been made in the past, this achievement entailed a
neglect of agriculture, an inadequate provision for consumer needs, and
a balance of payments deficit with Western industrial nations that
threatened to undermine the leadership's policy of political and
economic independence from the Soviet Union (see ch. 10).

Rigidly controlled by the PCR (see Glossary), the economy suffers from
the basic weakness common to all centrally controlled economies, that
is, a lack of adequate incentives for managers and workers. Rapid
industrialization since 1950, made possible by massive inputs of capital
and labor and aided by heavy imports of advanced Western industrial
plants and technology, has involved a waste of resources on a scale that
may hamper economic progress at the present stage of development. In
trying to evolve a system of incentives that would lead to a more
economic use of resources, the PCR is facing a dilemma. Greater
efficiency requires more flexibility, which, in turn, implies a greater
freedom of initiative at lower economic levels than the PCR has been
prepared to grant thus far. In the search for a solution numerous
administrative changes have been made since 1968 without basically
altering the nature of the system.

A major problem facing the economy is its heavy dependence on imports of
raw materials and equipment and the failure, thus far, to develop a
sufficient volume of exports salable in world markets. At the present
stage of development, Romanian industrial products compete poorly with
the output of advanced Western nations. Expansion of agricultural
exports, which have a ready market in many areas, has been hampered by
the slow development of the country's agricultural potential and by a
growing domestic demand. Although greater attention is to be devoted to
agriculture under the current Five-Year Plan (1971-75), the additional
resources to be allocated to this sector are not commensurate with the
magnitude of its needs. Instead, major emphasis is placed in the
five-year p