cies in domestic
currency and foreign exchange were tightened by a decree issued in
September 1971. A companion decree also provided for much stricter
border controls over foreign exchange, precious metals, and jewelry
carried by individuals entering or leaving the country. Violations were
more precisely defined, and penalties were substantially increased to
discourage illegal traffic.

FOREIGN TRADE

Foreign trade is of crucial importance to the country's industrial
development because imports must be relied upon for a large part of the
requirements for materials and equipment. Trade has been expanding at a
rapid rate, and imports have been growing faster than exports. In a bid
for economic and political independence from the Soviet Union, the
country's leadership succeeded in reorienting a substantial portion of
its trade toward the industrial nations of Western Europe during the
mid-1960s (see ch. 10). After 1967, however, the inability to generate
enough exports salable in Western markets to balance imports forced the
country to turn increasingly to the Soviet Union and other Eastern
European countries for its import needs.

Foreign trade is a state monopoly. Trade policy is established by the
PCR and the government, and its implementation is the responsibility of
the Ministry of Foreign Trade. Authority to engage in foreign trade
operations has been partially decentralized by a law enacted in March
1971, although initial steps in this direction were taken under
administrative regulations in the beginning of 1970. The main purpose of
the law has been to raise the efficiency of foreign trade and to help
expand exports. These ends are to be attained through greater exposure
of domestic producers to international competition and by providing
incentives for them to meet it. The law was also intended to create
favorable conditions in the country for the establishment of industrial
enterprises with foreign participation.

Before the adoption of the trade reform law, only specialized foreign
trade enterprises directly subordinated to the Ministry of Foreign Trade
were empowered to carry on trade activities. Producing enterprises were
completely divorced from foreign buyers. They delivered their export
goods to the foreign trade enterprises at domestic prices, without
knowing to whom or at what price the goods were sold abroad. Imports
were also obtainable only through foreign trade enterprises at domestic
prices, re