“This project has been a huge success, perhaps one of the most successful aid projects ever.” What would you say it is?
The Eastern Line by Katja Hoyer Beyond the Wall: East Germany 1949-1990. The context was the fact that the GDR ran out of coffee in 1977. “Afternoon coffee had become a daily ritual, not only comforting but essential as a psychological crutch,” Hoyer writes. This signaled stability and material comfort after the deprivations the middle-aged and older generations had suffered as young adults. The raw materials crisis and the GDR’s chronic lack of foreign exchange meant that the country could no longer import coffee. What to do?
The solution was to reach a fraternal socialist agreement with Vietnam, desperately poor after its own conflict. “East Germany could help the sister state rebuild while solving its own coffee problem.” The GDR provided huge aid and helped build massive infrastructure, including a hydroelectric plant, and in return would get half of Vietnam’s coffee production for 20 years.
Vietnam now produces 20 million 60kg bags of coffee a year – almost all exported – in an industry employing 2.6 million people, the book reports. Unfortunately for East Germany, the coffee plants did not produce their first beans until 1990, too late to save the communist regime. The coffee shortage is a stark illustration of the long-term unsustainability of the economy. It was too small and unproductive to continue providing enough material and consumerist comforts to satisfy the populace.
For a few years in the late 1980s, a small part of my job was to monitor the Soviet economy during the perestroika era. The West’s best estimates (those of the CIA) overestimated the strength of communist planned economies in the years up to 1989. Significant borrowing – and for the USSR itself, resource exports – was needed to finance sufficient consumption for political stability, given low productivity. beyond the wall is very interesting in its highlighting of the social benefits of the stability and growing comfort that East Germany has brought to its people; for a (significant) minority life there was intolerable, but for the majority it had some compensations. Until it doesn’t.