Management of the economy

Before the Soviet invasion, the government budget was divided into two parts, ordinary and development. The former covered administrative activities and the latter investment expenditures, incorporated into the national plans of development. Total domestic revenue was usually exceeded by expenditures; the difference was covered through deficit financing and foreign loans and grants. Following the Soviet invasion, a balanced budget was achieved with revenue derived principally from the sale of natural gas and from foreign loans and grants. Expenditures were mainly for government ministries, the developmental budget, and foreign debt service.

The private sector engages primarily in agriculture and livestock breeding. There formerly was a mixed pattern of small, medium, and large landholdings, but this system underwent drastic change, particularly after 1978. The bulk of the trade and transport and most manufacturing were in the hands of private entrepreneurs until the late 1970s when these sectors of the economy were nationalized. Public enterprise formerly was confined to a section of the foreign trade, to mining, and to some industries.

Because most of the population is engaged in agriculture, the industrial labor force is insignificant, and labor unions have failed to develop. Traditional loyalties to families and tribes are stronger than those to workers' organizations.


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