n the 1956-60 period.

Although substantial progress has been made in the expansion of
industrial capacity, construction of new industrial plants has been
beset by many problems and has consistently lagged behind official
plans. Inadequate planning, poor design, disregard of the limitations of
the materials base and of potential markets, improper location,
excessive size of projects, and long delays in project development and
in construction have been among the difficulties most frequently
discussed in the country's press. Completed plants often require years
to attain the projected output level, and many plants have never reached
it.

Large losses to the economy have also been caused by long delays in
installing new equipment, much of it imported at a heavy cost in foreign
exchange. At the end of 1969 the Grand National Assembly was officially
informed that the volume of unused equipment amounted to 3.5 billion
lei; some of the equipment had been lying idle for from ten to twelve
years. Government officials realize the urgent need to improve
investment performance, particularly in view of the large investment
program planned for the 1971-75 period.

PRODUCTION

Industrial production in 1970 was 3.8 times larger than it had been ten
years earlier, according to official data. This increase is equivalent
to an average annual growth rate of 12.8 percent. A rise of 11.2 percent
in industrial output was unofficially reported for 1971. In terms of
Western statistical concepts and methods, the annual increase in
industrial output was estimated at 11.5 percent for the 1960-68 period,
compared to an officially reported growth rate of 13.2 percent.
Industrial growth in Romania has been among the highest in countries of
Eastern Europe.

In line with the government's priorities, production of capital goods
increased at an annual (official) rate of 14.2 percent, and that of
consumer goods advanced by 10.2 percent. The proportion of capital goods
in the total output therefore increased from 62.9 percent in 1960 to
70.6 percent in 1970; it is scheduled to reach 72.8 percent by 1975.
Although the output of consumer goods increased 2.6 times during the
ten-year period, the availability of goods to consumers did not rise
proportionately because an increasing volume was exported to pay for
imports of machinery and raw materials. Shortages of consumer goods,
including foodstuffs, were not eliminated by 1971. The output of newly
in