Establishing + Consolidating Communist Rule in the
GDR
HOW SUCCESSFUL WAS THE DEVELOPMENT OF THE GDR’S ECONOMY IN THE YEARS
1949-61?
Socialist Unity Party (SED) = the main party, communist.
OBSTACLES FACED BY THE GDR IN DEVELOPING A SOCIALIST ECONOMY
1. Lasting damage from WW2 - heavy bombing of East German cities such as Dresden left them
in ruin.
2. Lack of industrial areas - the best were in West Germany. The division of Germany meant that
the GDR no longer had access to supplies of coal and steel from the Ruhr, which was now part
of the FRG.
3. Reparations - 25% of all industrial goods produced in the GDR were seized by the USSR
4. Loss of valuable labour - due to continued migration to the FRG in the 1950s
POST-WAR REPARATIONS TO THE USSR
Although the wartime Allies fixed a sum of $20 billion dollars to be extracted from Germany, they could
not agree on a timescale/ means of repayment. So, they agreed that the occupying powers could take
reparations from their own zones.
Stalin urgently needed to rebuild the Soviet economy. The USSR extracted greater reparations from its
zone on the grounds that it had suffered extensive damage to its infrastructure during WWII (the USSR’s
steel output in 1945 was half that of the late 1930s)
● It is estimated that approx 1,500 entire industrial plants and half of all East German railway
tracks were taken from the Soviet zone into the USSR.
● If the removal of industrial equipment was too difficult then it was left in Germany and the
manufactured products seized.
Reparations did not cease until 1954. The impact on the economy was to depress standards of living,
fuelling hostility towards the Soviets in East Germany, who mistreated those employed in the dismantling
operations. Overall, 25% of all industrial goods produced in East Germany were taken as reparations.
SOCIALIST ECONOMICS AND PLANNING
The economic policy of the SED was based on Marxist ideology and closely followed Stalin’s policies, as
they believed that this was the best way to eradicate fascism / naziism which they thought was a product
of the later stages of a capitalist society.
They aimed to transform the GDR into a Marxist-Leninist state:
● This would require abolishing the landowning class, private business, and small farmers and
replace them with a centrally planned economy, nationalised industry and collectivised
agriculture.
● Following the creation of the GDR a State Planning Commission was established to plan and
supervise the implementation of 5 Year Plans
From 1950 onwards, industries in the GDR were given targets in 5 Year Plans modelled on Stalin’s
industrialisation of the USSR.
GDR
HOW SUCCESSFUL WAS THE DEVELOPMENT OF THE GDR’S ECONOMY IN THE YEARS
1949-61?
Socialist Unity Party (SED) = the main party, communist.
OBSTACLES FACED BY THE GDR IN DEVELOPING A SOCIALIST ECONOMY
1. Lasting damage from WW2 - heavy bombing of East German cities such as Dresden left them
in ruin.
2. Lack of industrial areas - the best were in West Germany. The division of Germany meant that
the GDR no longer had access to supplies of coal and steel from the Ruhr, which was now part
of the FRG.
3. Reparations - 25% of all industrial goods produced in the GDR were seized by the USSR
4. Loss of valuable labour - due to continued migration to the FRG in the 1950s
POST-WAR REPARATIONS TO THE USSR
Although the wartime Allies fixed a sum of $20 billion dollars to be extracted from Germany, they could
not agree on a timescale/ means of repayment. So, they agreed that the occupying powers could take
reparations from their own zones.
Stalin urgently needed to rebuild the Soviet economy. The USSR extracted greater reparations from its
zone on the grounds that it had suffered extensive damage to its infrastructure during WWII (the USSR’s
steel output in 1945 was half that of the late 1930s)
● It is estimated that approx 1,500 entire industrial plants and half of all East German railway
tracks were taken from the Soviet zone into the USSR.
● If the removal of industrial equipment was too difficult then it was left in Germany and the
manufactured products seized.
Reparations did not cease until 1954. The impact on the economy was to depress standards of living,
fuelling hostility towards the Soviets in East Germany, who mistreated those employed in the dismantling
operations. Overall, 25% of all industrial goods produced in East Germany were taken as reparations.
SOCIALIST ECONOMICS AND PLANNING
The economic policy of the SED was based on Marxist ideology and closely followed Stalin’s policies, as
they believed that this was the best way to eradicate fascism / naziism which they thought was a product
of the later stages of a capitalist society.
They aimed to transform the GDR into a Marxist-Leninist state:
● This would require abolishing the landowning class, private business, and small farmers and
replace them with a centrally planned economy, nationalised industry and collectivised
agriculture.
● Following the creation of the GDR a State Planning Commission was established to plan and
supervise the implementation of 5 Year Plans
From 1950 onwards, industries in the GDR were given targets in 5 Year Plans modelled on Stalin’s
industrialisation of the USSR.
