The Results of Privatization in the Area of Industry and in the Services Sectors
If one looks back at the desolate economic starting point, at the developments and setbacks caused by the disappearance of the Eastern European markets, one can assess the industrial restructuring as having been rather successful – surely also as a success brought about by high investments in East Germany. During the Treuhand years, investments stood at 50% of the gross national product (GNP); the West, during these years, only achieved investments of 25% of the GNP.
It is regrettable, however, that only a few large industrial companies (e.g., Jenoptik, …) could be preserved, and that few East German owners had a chance because they had neither the financial nor the entrepreneurial resources, and could not have had them coming from the GDR era.
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Weaknesses and Mistakes
Even though, from the perspective at the time, employees were hired, an organization with a headquarters and branches was established, and guidelines were created at breakneck speed – always in tandem with day-to-day business – there were many sources of errors. It was only with the introduction of controlling, auditing, and staff positions that the work was done in a more orderly fashion. The Treuhand, however, could probably never live up to the standards of a German court of auditors.
A personal note: the purely entrepreneurial decisions of the early period, which had to be made without rules of any kind, were not the worst. However, the documentation was inadequate.
And then, unfortunately, there were also old-boy networks in East and West, there was criminal activity, as is so often the case in times of upheaval. And of course there were also bad individual decisions, each of which is still painful today. From the perspective of the time it was already a mistake not to require, along with a business plan, a plan for research and development. From today’s perspective it was a mistake not to have boosted the equity capital after the collapse of the CIS* markets, since the hopes of the early buyers were focused on the markets in the East, which were now suddenly lost to them.
A chance for a joint shaping of the united Germany was lost when more than 200,000 paragraphs of the West German legal system were transferred [onto the East]. It would have been better to trim back the overgrown bureaucracy in the Federal Republic and adjust it to the new conditions. As it is, the incrustations in the West have remained in place and were passed along to the East.
* CIS refers to the Commonwealth of Independent States that was founded at the time of the collapse of the Soviet Union. It includes eleven (up to 2005 twelve) former Soviet republics – eds.
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