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> Western Germany started with the same handicap

It depends. Some counter-points:

- Western Germany had all (or at least nearly all) of Germany's supply of black coal, the energy source that powered nearly all of Germany back in the day. East Germany only had brown coal, which has a worse energy density and is more complicated to mine and use e.g. because of the water contained in it. Over the lifespan of the GDR, about 40% of all investments in industry went into the energy sector as they tried to make brown coal more efficient and build nuclear reactors.

- While the Western allies realized fairly early on that it makes more sense for them to integrate West Germany into their political and economical networks, East Germany had to pay huge amounts of reparations to the Soviets. Entire factories and hundreds of kilometers of rail tracks were disassembled and shipped to Russia. [1] That also took decades to recover from.

[1] While motivated by an understandable desire for a payback on the part of the Soviets (who suffered millions of casualties during the war), this was an incredibly stupid move for the Soviets: A lot of those reparations got lost to their "brother countries" through which stuff was shipped to the Soviet Union, and when machines managed to arrive in the Soviet Union, they often lacked qualified personnel to operate them. And, of course, it also reduced competitiveness of the GDR (and, therefore, of the Communist bloc as a whole).



Wow. Finland (which didn’t get occupied and remained nominally neutral) also had to pay hefty war reparations (mostly in the form of heavy machinery) but that had an almost opposite effect: they kickstarted rapid industrialization and economic growth in the hitherto poor, largely agrarian country.


Nominally neutral? They fought the Soviets in alliance with the Nazis! It wasn't until the end of the Winter war they switched sides.


Finland was neutral before, and only worked with Germany after a massive, unprovoked military invasion by Russia and essentially no help from the allies during the entire Winter War.


Nominally neutral in peacetime I meant. Meaning, didn’t become a Soviet vassal, remained a democratic market economy open to the West. In practice we had to make some concessions to the East.

Also, in the Winter War Finland fought alone against the Soviets. During the Continuation War we made an enemy-of-my-enemy sort of pact with the Germans and, in 1944, wiggled out of that agreement and sued for a separate peace treaty with the USSR (as it was becoming clear that the alternative was being run over).

The terms of the treaty dictated that we had to drive remaining German forces out of the country, leading to the Lapland War as the understandably pissed Germans used scorched earth tactics as they retreated from Finnish Lapland to Norway, at the time under Nazi occupation.


They did not have much choice, it was either ally with the germans and receive aid, or get taken over by the USSR.


Inefficiently moving around some resources may have contributed, but that the overall system was inefficient is more to be blamed of course.




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