eriod on the development of the chemical, electronic, and
precision tool industries for domestic needs and export.

The state of the economy in the early 1970s was revealed by two Romanian
economists in articles evaluating their country's economic progress.
According to their calculations, the per capita national income in
Romania in 1975, provided that the economic targets for that year are
reached, will approach the level attained by Italy and Austria in 1968
and will be somewhat larger than half that in France and the Federal
Republic of Germany (West Germany) in the same year. At the same time
they estimated that, even with continued acceleration of the rates of
industrial modernization and growth of labor productivity, it will
require several more five-year periods to reach the 1971 economic level
of the more developed nations.

ORGANIZATION

The economy is highly socialized. The state owns virtually all industry
and shares with collective farms ownership of more than nine-tenths of
the farmland. Private artisan shops contribute only a fraction of 1
percent to the industrial output, and private farmers' limited holdings
are confined mainly to marginal lands. The state owns all natural
resources other than the collective and private farmlands; maintains
complete control over the country's physical resources, finances, and
labor; and has a monopoly of foreign trade and foreign exchange. The
functioning of the economy is directed by comprehensive long-term and
annual state plans, which are binding for all economic entities.

Control over the economy is strongly centralized, despite half-hearted
attempts since 1968 to grant more freedom of initiative to lower
management levels in the interest of greater flexibility and efficiency.
Supreme decisionmaking power rests with the Standing Presidium of the
PCR and the Council of State, the memberships of which are almost
identical (see ch. 9). Compliance with PCR decisions is enforced through
an administrative hierarchy that consists of three distinct levels: the
Council of Ministers, all of whose members hold high positions in the
PCR; economic ministries, which are responsible for specific sectors of
the economy; and trusts and combines, which group enterprises along
functional or territorial lines. Specialized committees with ministerial
rank administer certain aspects of economic activity; chief among these
are the State Planning Committee and the Committee for Price