Rigid But Prosperous

Can an East European state reject reform and still thrive? Yes, says the doctrinaire regime of East Germany's party boss Erich Honecker. The leadership in Berlin has stuck faithfully to the eternal Communist verities and pulled off a hat trick. Under one of the most authoritarian systems in the Warsaw Pact and with a rigid, centrally planned economy to match, East Germany boasts the most powerful industrial base, the highest standard of living and the most per capita exports to the West of any nation in the East bloc. Declared Honecker, 76, in a speech to party leaders that implicitly rejected any reform-minded changes in his winning formula: "If one finds that one has embarked on a course that is right, then one should continue along it."

Yet beneath the veneer of rosy statistics, evidence is mounting that East Germany's orthodox course ultimately leads to a dead end. A Prussian work ethic and meticulous implementation of carefully honed five-year plans are no longer quite enough. Even that well-oiled machine is wearing down under the same contradictions of Communism that have driven other East bloc economies onto the rocks. Pointing to the increasing scarcity of consumer goods, ten- year waiting lists for East German-made Trabant automobiles and deepening competition in foreign markets from third world producers, a Western diplomat in Berlin says, "They are treading water. Everything is getting pretty waterlogged."

Ironically, Honecker and his elderly colleagues in the ruling Politburo have been able to fend off unpalatable reforms in large part because of huge subsidies from West Germany: some $1 billion a year in bank credits and other transfers. East Germany also profits from back-door access to the rich European Community market through West German middlemen. The special treatment reflects West Germans' strong emotional bond with their countrymen across the Berlin Wall -- and deep-seated hopes that the two Germanys may one day be reunited.

Despite a near reverence for authority, East German youths are growing restless because of contact with the freedoms and goods of the West, while an increasingly impatient cadre of younger, more reformist party figures are chafing over the closed door to change at the top. While East Germany seems out of step with other countries of the bloc, it is still marching toward its own brand of Communist crisis.