Strain in West Berlin

There is no trouble getting a job in West Berlin. Plants have enough advance orders to keep production lines rolling far into next year. Though it lost all its workers who lived in East Berlin, the electrical industry--which accounts for 30% of West Berlin output--has hardly skipped a beat since the Wall went up just one year ago. Of course some of West Berlin's stimulus is artificial: tax concessions from the Bonn government and wage levels that are lower than in West Germany even make it profitable to barge raw steel into the city from the West, shape it into beams, then ship it back. Berlin's cigarette, liquor and food-processing industries also prosper with the help of tax concessions.

But even with all the outside help, West Berlin is beginning to show some economic strain. The city's latest economic survey reports that new industrial orders from West Germany have dropped 12.8% from last year's fat first half. More disturbing, orders from foreign countries have fallen by almost one-third. There has also been a drop-off in big new firms opening in Berlin, and West German bankers and insurance executives have begun to shy away from lending money to West Berlin industry.

Much of this reflects the slowing down of the boom in West Germany itself, which has brought on a tightening of credit. And some of the lag in new orders can be blamed on Berlin's big backlog of business, which has delayed deliveries and produced a more relaxed spirit in hard-selling Berlin executives. But a deeper reason is long-range anxiety over Berlin's fate in the cold war. While the West would not permit free Berlin's economy to falter badly, one West German banker admits that "the lack of security in Berlin makes investment by outsiders intrinsically unattractive."

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