I mean, I know that many of the other Warsaw Pact nations used something other than the Hammer and Sickle on all their equipment, but why a compass? It seems like such a random object.
The compass was not the only symbolic image on the GDR flag, it shared space with a circular sheaf of wheat and a hammer. Each icon had represented a class element that ostensibly was the constituency of the new socialist state. The wheat and hammer obviously represented the peasantry and workers. The compass was to represent the educated/intelligentsia. One of the legitimizing strategies of the GDR was to emphasize Germany's historical contributions to global culture and thought. This meant an emphasis upon figures like Goethe or Beethoven, as well as the German ideological figures Marx and Engels. The state portrayed these intellectuals as part of pattern of German history which the GDR was honoring by ensuring the worker's state had a strong commitment to advanced education for all Germans, not just the scions of the elite.