national income
to investment. Growth rates in the 1966-70 period were somewhat lower
than in the preceding five years, with the exception of agriculture, the
performance of which was slightly better.

The predominant growth of industry has been a direct consequence of the
leadership's policy. This policy was reflected in a disproportionately
large allocation of investment to industry at the expense of other
economic sectors. In the 1966-70 period, for instance, industry received
55 percent of total investment--60 percent if the construction industry
is included--compared to less than 13 percent granted to agriculture.

Within industry preponderant emphasis has been placed on the development
of the capital goods sector at the expense of consumer goods. Whereas
total industrial output increased at an average annual rate of 11.8
percent from 1966 to 1970, production of capital goods rose at a rate of
12.7 percent, and production of consumer goods grew by only 9.5 percent
annually.

As a consequence of the uneven sectoral growth, the structure of the
economy changed significantly between 1960 and 1970. According to
official data the contribution of industry to the net material product
rose from 44 to 61 percent, whereas that of agriculture declined from 33
to 20 percent (see table 4). The relative importance of construction and
transport rose slightly, but that of trade declined by half. A
strikingly different structure of the economy emerges in terms of the
Western concept of gross national product (GNP), which includes housing
and services and treats both taxes and subsidies in a different manner.
The contribution of industry was less than that of agriculture in 1960,
but by 1967 it had increased more rapidly than is indicated by the
official data (see table 5). The role of agriculture, on the other hand,
declined more rapidly.

_Table 4._ _National Income (Net Material Product) of Romania, by
Economic Sector, 1960, 1967, and 1970_ (in percent)

----------------------------------------------------------
Economic Sector 1960 1967 1970
----------------------------------------------------------
Industry and handicrafts 44.1 51.7 60.8
Construction 9.0 8.4 9.6
Agriculture 33.1 28.6 20.0
Transport and communications 3.8 4.2 4.2
Trade 6.5 4.6