ADMINISTRATIVE AND CENTRALISTIC ECONOMIC SYSTEM IN DFM / NRM


ADMINISTRATIVE CENTRALISTIC ECONOMIC SYSTEM IN DFM / NRM (1945-1950) – an economic system in which the resolution of the central economic problem (what to produce, how to produce and for whom to produce); the deployment of existing resources in the economy is completely left to the state (government) through central and direct planning. The system of administrative-centralist management of the economy in NRM runs relatively briefly (1945-1950). It is based on state (socialist) ownership of the means of production, which resulted from the nationalization and confiscation of former owners' properties. His important features are identical to those of the Soviet economy and other communist countries. The allocation of resources is typically non-market. Detailed state plans are compulsory and basically come down to enterprise directives. NRM is starting to realize the first five-year plan since 1947, after the number of employees and the level of industrial production in the previous two years exceeded the pre-war level. From 1945 to 1950 the number of employees in NRM rises from 26,437 to 105,237, but with very low productivity, and industrial production increases by 2,6 times, but calculated on a very low basis. The central plan determines the enterprises, according to administrative logic, the quantity of goods and services to be produced and all other conditions related to production – from where to obtain the inputs (raw materials, semi-products, etc.) and at what price whom to sell the final products and at what price. Salaries of employees are also pre-determined and fixed. The end result of such resource allocation is limited to under-utilization of existing facilities and low economic efficiency. An external manifestation of this problem is the small production and the obvious lack of goods and services. The deficiency of goods and services is determined by the action of several factors: unrealistic planning (central planning authorities predict smaller quantities of goods and services than actual needs); from the widespread practice of enterprises to derive lower planning tasks than their real production capacity, if the failure to fulfill the plans is sanctioned; from the low prices of goods and services, in this situation the planning authorities are planning to plan well, the companies to fulfill the plans, but because of the low prices consumers demand bigger quantities of goods and services, etc. IZV .: State Statistical Office. Development of SR Macedonia 1945-1984, Skopje 1986. LIT: N. Uzunov, Economy of the Republic of Macedonia 1945-1990, MANU, Skopje, 2001; K. Gligorov, All Yugoslav (economic) reforms, Skopje, 2006. T. F.



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