FOREIGN ECONOMIC INTELLIGENCE REQUIREMENTS RELATING TO THE NATIONAL SECURITY
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP67-00059A000100050003-2
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
22
Document Creation Date:
November 17, 2016
Document Release Date:
December 3, 1999
Sequence Number:
3
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OPEN
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{ LEIGH ;CO!T9.11IC ITJTEI,.t,IG: ICE RI;QUTL'ti 213TTS
IIELATIIG TO THE I.I.W1011AL SECURITY
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SFr-CRET
APPEZM3 X B
DREIU i ECONOMIC INTELLIGENCE REQUIF..1 NTS
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I. Functions of Foreign Economic Intelligence as i~t Relates to the
cc~ur 'fir of e~ 0 _. ",.
A. The primary function of foreign economic intelligence in
the service of national security is to provide the basis for United
States policy formulation and action by: (1) providing a factual
understanding of the economic situation in foreign countries; (2)
foreseeing probable future devolopments through analysis of economic
trends; and (3) assisting,, on the basis of economic evidenced in
dotormining the feasibility and probable consequences of alternative
courses of action open to the United States.
B. A ' groat many agencies of the United States Government in the
discharge of their on special missions collect economic information
and perform economic research concerning, foreign cowatries.$/ Virtually
ail of this information and research is or m W be relevant to one or
another specific problem of national security. It is t ho primary duty
of the agencies represented on the Intelligence Advisory Council to see
to it that data collected for many purposes is brought to bear on national
security problems, and that such additional information is collected as
mwf be necessary to furnish the aver.-, to critical security problem.
survey of the nature and extent of such economic intelligence is
included in this report as Appendix C.
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Accordingly this paper, while recognizing the need for the fullest
interchange among all interested parties, concentrates its attention on
the requirements of the T,AC agencies for economic intelligence relating
to the national security.
Ce In order to determine how the relatively limited economic
intelligenco facilities, both within and outside the government, can
make their mimmm contribution, and in what directions their efforts
most need to be augmented, it is necessary that there be established and
maintained machinery for combined economic intelligence analysis, on a
priority basis. Such machinery is recommended elsewhere in this report.
The purpose of this statement of requirements is to sugst the perspective
in Phich a continuing program of priority intelligence problems might be
viewed.
Do Such a program must include:
(1) Defining authoritatively the economic reports most
needed in support of United States national security policies and
actions.
(2) Determining the particular economic research studies, of
an ad hoc or continuing character, most urgent and essential as a-
basis for the reports listed in (1) above.
(3) Organizing the requisite economic reports and research
studios, including the allocation of tasks among the various
interested and competent agencies and the merging of the results
of individual analyses,,
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(4) Defining and arranging for the collection of the econcmic
information, not already available in government, which is most
essential to the preparation of the estimates and research studies
listed in (1) and (2) above.
(5) Reviewing the processing facilities (translation facilities,
industrial registers, document indexing, map production, etc.) and
the techniques of analysis needed to exploit raw intelligence materials
most effectively.
The following section (Section II) attempts a classification of the
reports and studies needed primarily for government policy and planning
purposes. Section III outlines the categories of operational intelligence
interest which must be covered by one or more of the intelligence agencies
on a continuing or ad hoc basis.
The outline of research and information requirements must be designed
to support the intelligence studios outlined in Sections II and III, and
wrl.ll, in part, grow out of these studies as they progress. Sane suggestions
are made in Section 17 an to the facilities and techniques required,
II. b orei, Economic Reo.,orts and Estimates Most Needed in !Mort of
NatIonal. Security P' and Pow
A. Introduction
The gravest threat to the security of the United States and the
free world within the foreseeable future stems from the hostile designs
and formidable power of the USSR, and from the nature of the Soviet ;system.
At least for the immediate future, therefore, first priority should be
given to economic analysis in support of policies relating to the conflict
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between the Soviet and the non-Soviot worlds. This requires intelligence
relating to the capabilities, the vulnerabilities, and the intentions
or enrobable courses of action of three main groups of countries: (1)
the USSR and its satellites, including China; (2)
(3) a band of countries on
the fringe of the iron curtain not now clearly in either camp, but
potent-dally contributing to the strength of one or the other. Also
'important to national security is intelligence relating to particular
resources in the rest of the world, principally in Africa and Latin
America, :tich contribute significantly to the strength of either center
of pogo
Studios directed at the capabilities of a country or complex of
countries should be designed to reveal what limitations the economies
of these countries place on what they can dos now and in the future.
This relates not only to their capabilities to take military action and
cold war measures, but also to their capacity to provide their populations
with the rising standards of living necessary to political stability under
free institutions. Vulnerability studies focus on the susceptibility of
one country to the application,, by another power, of selected devices
designed to reduce its capabilities; in other Swords, howie can hurt them
or they can hurt us. Studies of intentions or o~r bable courses of action
seek to presen evidence which will reveal which of several alternative
courses of action a country will follow.
It is tempting to divide intelligence problems into those concerned
with the maintenance of the peace and the strengthoning~of free institutions,
and those relating to the conduct of war if war should become unavoidable.
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This dichotomy overlooks the twin facts that policies to maintain peace
must be based on the best possible intelligence as to relative military
strength and intentions, and that the outcome of a war, should it come,
tiaill depend importantly on the stability and effectiveness of civilian
economics. Hence in illuminating the major policy problems facing uss,
intelligence as to military capabilities must be closely blended with
analyses of civilian economic development.
The framework of the outline below reflects United States security
interests in they capabilities, vulnerabilities and probable courses of
action of the three sets of countries noted above and in the strategic
resources of the rest of the world. Within this framework are examples
of reports and estimates that should be given priority treatment in the
foreign economic intelligence effort.
Ho Econcnic Analyses Rely to the USSR and its Satellites
The problem of economic intelligence relating to the iron
curtain countries is a special one in several respects. Considering the
present state of our knormledge, this area probably has a higher priority
for additional :intelligence effort than any other. On the other hand,
the collection of information is more difficult and costly than elsewhere,
and hence the sharp definition of priority requirements for collection is
more urgent. Also the cost and difficulty of collection place a greater
rrr:ium here than elsewhere on the development of special techniques to
rtracte maximum amount of information from the limited data obtainable.
in 'ricw of the hostile intentions of the Soviet bloc, analysis of its
capabilities for military and non-military aggression, its vulnerabilities,
and its intentions must take Priority at the moment over estimates of its
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capabilities for peaceful economic development. In general our present
knowledge of particular industries and segments of the Soviet economy,
;chile weak, is bettor than our knowledge of the aggregate resources and
capabilities of the economies as a whole, either of the USSR proper or of
the whole Soviet bloc.
While it is recognized that Soviet control over Communist China is
possibly loss rigid r rtd direct than that over the Eastern European satellites
it is believed that within the framework of this paper China should most
logically be classified as a satellite,
Examples of high priority economic intelligence projects are as
follows x
(1) Analysis of the- economic capabilities of the USSR and its
satellites to engage in military action or to emplo "cold war"
measures against the United States and its allies or against "neutrals"
a. wartime Capabilities of the Soviet Bloc to Meet
Essential Civilian and Military Requirements for Selected
Critical items (e.g., electronics equipment, copper, tin,,.
aviation fuel, specicl machine tools, ferrc--alloying metals,
precision instruments, natural rubber, ate.)
b. Economic Capabilities of the Soviet Bloc to Develop
and Produce Selected L:tilitary Stems (e.g., Atomic weapons,
guided missiles, germ warfare agents, radar, long range jet
bombers, tanks, submarines, etc.)
o. Effect on Soviet Economic Capabilities for Prolonged
War of the Acquisition by the USSR of Additional Areas, such as
a) Western Europe, b) the Middle East, c) Japan, d) Southeast Asia,.
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de Overall Economic Capabilities of the Soviet Bloc
as a'F:'hole Simultaneously to Conduct Specified Military
Campaigns and Maintain Essential Civilian and Military Production.
e. 'Effect of the Korean War Combined with Western Export
Controls on the Capabilities of the Chinese Economy both With
and Without Soviet Assistance.
f. Economic Capability of the European Satellites Unassisted
by the USSR to Wage War on Yugoslavia. Requirements for Soviet
Assistance.
Capabilities of the Soviet Bloc to Wage Economic
Warfare Against Pion-Soviet Nations.
(2) Ant sis of the economic vulnerability of the USSR and
its uatellites to measures of economic warfare, psychological warfare
and to military attack, including strategic bombing.
Z. Vulnerability of the Soviet and Satellite Eoonoaniesp
Including Chinas s, to Strategic Bombing with Particular Referenco
to Their Vulnerability to A-Bomb Attack.
b. Vulnerability of the Soviet Bloc as a Vole to a
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Western Program of Economic Carfare. Relative Vulnerability
c. Vulnerability of the Chinese Econor to Western Controls
on (a) 1sports to China (b) Shi ppin o
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d. Vulnerability of the Soviet and Satellite
Economies to a Program of Induced Defection of Key Technical
and Industrial Personnel.
e. Vulnerability of the Soviet and Satellite Food Supply
to Biological 117arfareo
(3) Analysis of economic indications of probable Soviet and
satellite courses of miles, and political action and analysis
of all indications of probable courses of economic action.
a. Economic Activity Within the USSR and Its Satellites
Which Might Reveal Their Intention to Resort to .Military Action.
b. Patterns of Allocation of EconaUc Resources for
the Production of Military Items Within the Soviet Bloc Which
Might Reveal the Kind of Military Operations Contemplated.
c. Courses of Action Likely to be Taken by the USSR
in Response to an Effective Western Program of Export Controls,
d. Soviet Economic Measures With Respect to China Which
Might Reveal the Extent of the Political and Economic Integration
of These Countries(,
e. Evidence Which Might Suggest What Air Target Systems
25X6 the Soviets Would be likely to Adopt for Western Europe.
This group of countries poses very different intelligence
problems from those of the Soviet Bloc. In the first place, a great deal
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of detailed economic information about them is either actually or potentially
available. Secondly much more work has been done in analyzing the aggregate
resources and capabilities of these countries than in the detailed analysis
of particular industries, facilities, and services. Nevertheless, this
detailed information can be secured with much less cost and risk than in
the case of the USSR. Hence special research techniques to exploit every
scrap of data are less urgent than effective programs of data collection,
collation, end analysis by more conventional means.
Since the intentions of these countries can be more directly observed,
a lower priority attaches to economic evidences of their intentions than
in the case of the USSR. Their capabilities to contribute to the military
stre.lgth of the !'.est are important., but their capacity to stabilize and
develop their overall economies is of equally great concern. Since they
are in the main industrially mature economies, the intelli,,ence about them
of concern to us generally relates less to basic resource development than
in the third and fourth groups (Sections D and E.below) and more to economic
organization., finance, and industrial structure. Their eeonomnic vulnera-
bilities to military attack., sabotage of all kinds and economic warfare are
subjects of very high priority.
25X6 Sample priority research projects are:
var" in conjunction with the United States against the USSR and its sate
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r r .~ w r.
b. Capabilities of the non-Soviet Nations in a Joint
Mobilization Effort to Meet Essential. Civilian and Military
Requirements for Selected Strategic and Critical Itetts (e.g.,
sulphur, copper, lead, zinc, aluminum., coal, steel,., manganese).
C. Importance of Western Europe and the Middle East-to
25X6 United States Economic Capabilities for Var.
b. Capabilities of Selected Allied I atio:is_ to Carry Out
Programs of Civilian Capital Formation and Improvement of
Productivity Concurrently With the Discharge of Their Military
Obligations .
Southeast Asia. Requirements for Foreign (primarily United States)
Assistance.
d. Consequences of Cessation of 'rade vrith the Soviet 131ce
for the Capabilities of Sell oted Allied Nations to Contribute to
the Allied Military Effort and Dovelop Their Economies.
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es importance of Foreign Econanic Assistance (primarily
United States) to the E onomic and Political Stability of Italy,
Greece, and Turkey.
f, Essential Elements of a Raw Material Program Designed
25X6
to tdeet the Requirements of Both western Rearmament and Western
Economic Stability and Development,
Requirements for Economic Assistance in Korea During
e War and During the Post-War Period of Rehabilitation.
as Vulnerability of the onmyy o Non-Soviet a ion
to Strategic Bombing, i.e.., to Target. Systems Most Likely to
be Adopted by USSR.
b. Vulnerability to Sabotage and Similar Covert Measures
of Raw Material Supplies and Production Facilities of Strategic
Importance to the Joint Mobilization Effort of the Non-Soviet
Nations. Protective Actions 1.4ost Effective Against Such Measurese
c. Vulnerability of the Non-Soviet Nations to a Soviet
Bloc Program of Economic warfare. Relative Effectiveness of
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a gment Yzith and support for proms and measures affecting the
seourit of the United States.
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In general, our economic information is inadequate on these countries
not because ue are denied access to it, as in the case of the Soviet bloc,
but bacause it has never been assembled by anybody to anything like the
extent pr^;valent in Western Europe. Strategic resources are nportant in
many of t37eso countries, but i e have a great interest in their total
economic position as vmll as in their specific commodity and service contri-
butions.
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