PRELIMINARY EVALUATION OF THE SOVIET FIFTH FIVE-YEAR PLAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00935A000200130003-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 49
• Document Creation Date: November 9, 2016
• Document Release Date: September 2, 1998
• Sequence Number: 3
• Publication Date: August 28, 1952
• Content Type: IM

Approved For
elease11999/09/21 : CIA-RDP79T0093M000200130003-6
-c-rt--'
SECURITY INFI TION
INTELLIGENCE MEMORANDUM
PRELIMINARY EVALUATION OF THE SOVIET
FIFTH FIVE-YEAR PLAN
CIA/RR IM -366
28 August 1952
WARNING
THIS MATERIAL CONTAINS INFORMATION AFFECTING TFF
NATIONAL DEFENSE OF THE UNITED STATES WITHIN TTIF
MEANING OF THE ESPIONAGE LAW, TITLE 18, U5C, SECS
793 AND 794, TFE TRANSMISSION OR REVELATION OF
WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS
PROHIBITED BY LAW.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
'''''S11491?9046?ENNITimmo
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Release 1999/09/21 : CIA-RDP79T0093M000200130003-6
CIA/RR
IM-366
-R-E-T
SECURITY ION
PRELIMINARY EVALUATION OF THE SOVIET FIFTH FIVE YEAR PLAN
I. Direction of Soviet Planning
IL Usefulness and Reliability of Plan Data
IlL The Data
IV, Economic Aggregates in the Five Year Plan
V. Growth Potential of the USSR Economy
VI. Implications for Soviet Economic Capabilities for War
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Releas 999/09/21 : CIA-RDP79T00935M00200130003-6
-R-E-T
SECURITY ON
I. Direction of Soviet Planning.
The Fifth Five Year Plan, covering the period from the beginning of
1951 to the end of 1955, was announced in Moscow on 20 August 1952. Most
plans are announced about a year after their beginning; in this case it
may have been delayed because of the immense statistical and planning
work required. (especially since this Plan has been integrated with the
Satellite plans), or in order to use the Plan as an additional propaganda
device for the current Chinese negotiations and the Party Congress to
convene shortly.
It has been obvious for some time that the USSR has been operating
on a new plan, but until now there has been no indication of the basic
nature and direction of the planned economic effort through 1955. It is
the fifth such plan. The first, from 1928 through 1932, following the
capitalistic New Economic Policy, had its main emphasis on electrification
of the economy. The second plan laid stress on transportation and heavy
industry, while the interrupted third plan was to consolidate the gains
of the first two. The war made necessary a revision of the third plan,
and only interim planning was in effect until the issuance of the fourth
plan, covering 1946 through 1950. Restoration of the war damaged economy
was the keynote of the fourth plan.
The Fifth Five Year Plan appears to be the first balanced and
general plan. It stresses over-all development and expansion. It is
evidence that the USSR intends to enlarge the industrial base of their
economy. The output of consumer goods is to advance slightly, but the
share of total resources devoted to the consuming sector will_probably
not increase. While the military sector is not specificaii mentioned, it
does not appear that there will be any change in the proportion of total
resources devoted to military production. The rapid rat b ot growth for
such items as steel, copper, aluminum, electric power, petroleum, and
machine building demonstrate that the purpose of this Plan is to develop
natural resources, to build plants and equipment, and in general to work
toward a position where the Bloc can challenge the industrial might of
the non-Bloc world, either by peaceful competition or military aggression.
-E-T
SECURITY I
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Release,1999/09/21 : CIA-RDP79T0093M000200130003-6
C-R-E-T
SECURITY T1TION
II. The Usefulness and Reliability of Flan Figures in Estimating
Economic Activity.
Official Soviet pronouncements on planned goals and their degree
of achievement are an essential element in the intelligence picture of
the Soviet economy. Other sources of intelligence provide only scattered
information, generally of questionable reliability, on the same range
of subject matter. Most wartime and postwar statistics to be found in this
paper have been derived either from official Soviet announcements of
percentage increases or from adjustments, usually downward, of such
announcements. Since the second plan, the USSR has published fewer and
fewer absolute data on production. In the fifth plan there are no
absolute data. In the academic and intelligence communities, most
data for recent years have been derived from absolute data for 1940
(available in detail) and subsequently announced percentage increases.
Intelligence research on the Soviet economy has not advanced sufficiently
to permit a general "consistency check" to determine, for example, whether
estimates for some industries are unreasonably high when compared to
other industries. Thus we must still rely altogether too heavily upon
official pronouncements.
Pronouncements of the Central Statistical Administration on plans
and achievements may be fiction, in whole or in part. It would be easy
for top planners to carry a double set of books--one for controlling the
economy, the other for propaganda mill. The USSR is such a vast
expanse, and economic activity there is so varied, that few within the
USSR--even at high administrative and political levels--could gain a
correct insight into over-all conditions in an industry or an area.
With the convenience of a double-accounting device at their disposal,
the planners might well feel it to their advantage on the cold war fronts
to misstate their economic accomplishments and plans. The reason for
believing that this is probably not the case rests largely on the belief
that, given their world-wide objects and their tight control over the
economy, the derived statistics for particular industries--not the announced
indexes of agregates, such as gross industrial production and labor produc-
tivity--appear eminently reasonable. Comparison with U.S. achievements
Impresses one that the slopes of Soviet production are not extraordinarily
steep. Our conclusion is that the published Plan is substantially accurate.
The analysis in this paper is accordingly based upon the premises that
the post-1940 statistics are approximations to reality and that we have not
erected a "paper economy."
_7_ -E-T
SECURITY I ION
Approved For Release 1999/09/21 : CIA-RDP79TO 35A000200130003-6
Approved For Release-1999/09/21 : CIA-RDP79T00935*000200130003-6
-R-E-T
SECURITY TION
III. The Data.
Approximately 70 percent of total Soviet economic activity is
covered by the text of the official statement on the Fifth plan. The
principal areas omitted are the military production and operational sector
(15 percent); education (5 percent); certain industrial and military
construction activities (2 percent); activities of the ferrous metal,
chemical, and machinery industries (6 percent); and lumbering (5 percent).*
Using the statistics which were announced, the charts, tables, and map
which follow depict objectives of the Plan and contain statistical
analyses and comparisons with other years and with the United States.
Table A shows the increases, according to Plan, in the broad economic
aggregates, such as gross national product and industrial production.
Table B shows data for 1950, 1951, and the 1955 goals, along with
percentage changes and 1951 U.S. data. In this table approximately
50 percent of total Soviet economic activity is reported. In addition
to the sector ignored in the official pronouncement, the following activities
are not included becuase of the difficulty of obtaining proper units of
absolute measurement: health services (2 percent); other construction
activities (4 percent); consumer goods other than textiles (4 percent);
retail trade (3 percent); sundry financial and communal services (1 percent);
machinery products (3 percent); and wood products (2 percent).
Table C arranges selected items of the Plan by order of percentage
increase,
The charts compare U.S. production with Soviet production from 1928
to date, with a range of estimates for both countries. The coverage of
the economy in the charts is less comprehensive than in Table A. Only
33 percent of total Soviet economic activities are depicted herein. The newly
eliminated areas are grain, flax, and sugar (10 percenc); textiles and
footwear (6 percent); and machine tools, turbines, caustic soda, and soda
ash (2 percent).
The map, drawn wholly from the USSR published statement of the Plan
and hence unclassified, shows specific installations, such as river and
rail developments, electric stations, and other items geographically
indentified in the Plan.
* The proportions of total economic activity assigned to each sector are
based on the relationships of the wage bills of the respective sectors relative
to the total wage bill for the entire economy, as shown in the 1941 Plan.
Shifts in the relative share of the various sectors since 1941 would not
significantly alter the indicated proportions.
q
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Releaser999/09/21 : CIA-RDP79T00935A.00200130003-6
SECUR
-C-R-E-T
TABLE A
ION
Comparison of the Rate of Growth of Selected
Economic Aggregates in the Fifth Five-Year Plan
Aggregates
1950 as
% of
1940
1955
Fifth Plan:
as %
1955l25
of 1950
Gross National Income
(billions of 1926-7 rubles)
128.3
211
164
337.6
160
Gross Industrial Output
(billions of 1926-7 rubles)
138.5
239.6
173
407.3
170
Producers' goods
(billions of 1926-7 rubles)
86.1
158.6
184
275.8
174
Consumers' goods
(billions of 1926-7 rubles)
52.4
80.0
153
131,5
164
Retail Trade
(billions of current rubles)
175.1
275
128
467.5
170
Productivity of Labor
(percent)
136
150
Money Wages
(billions of current rubles)
162
294.8
182
339.8
115
Industrial Workers
(percent)
115
-E-T
SECURITY I ON
Approved For Release 1999/09/21 : CIA-RDP79 35A000200130003-6
Approved For Release.4999/09 1 : CIA-RDP79T00935/4800200130003-6
S- -E-T
SECURITY I ION
Table B
USSR Production and Man Objectives
USSR USSR USSR US USSR
1950 1950 1951 1951 1955
USSR
1955
%
Annual
Item
Index
Index
Increase
Grain (0000000 mt)
124.5
100
133
126.3
174.3
1407150
9.0
Wheat (0000000 mt)
30.2
100
36.7
26.9
47,6
1557160
12.0
sugat Beets (000 mt)
27.3
100
29.7
9,510.0
45,7
1657170
13.5
Cotton -(000 mt)
718.4
100
827.3
3,294.0
1,131.5
1557165
12.0
Flax (000 mt).
540.0
100
540.0
783.0
1407150
9.0
Potatoes (000,000 mt)
78.9
100
70.8
114.1
1407150
9.0
Cattle -(0000000 Units)
56.0
100
57.2
84.2
66.1
1187120
3.8
HOgs (0000000 units)
19.0
100
24.1
65.0
28.0
145.450
9.5
Sheep and Goats (000 animals)
89.7
100
99.0
28.1
144.4
1607162
12.2
Fish (000,000 mt)
1.8
100
2.2
2.8
158
11.6
Coal (0000000 mt)
262.0
100
282.0
532.0
375.0
143
8.6
Peat (000,000 mt)
35.7
100
42.6
45.3
127
504
Petroleum (000,000 mt)
37.5
100
41.0
307.5
69.4
185
17.0
Mineral fertilizers
(0000000 nit)
3.56 lop
...
6.69
188
1706
Meat (000 mt)
2,857.0 100
3,157.0
9,977.0
5,485.0
192
18.4
Butter (000 mt)
325.0
100
344.0
664,0
559.0
172
14.4
Sugar (0000000,000 mt)
2.18
100
2.09
-
3.88
178
15.6
Cotton fabrics (000,000,000 m) 3.6
100
-
9.2
5.8
161
12.2
Woolen fabrics (0000000 m) 145.0
100
..
382.3
223.0
154
10.8
Leather footwear (000,000 pr)
192.0
100
...
471.1
298,0
155
11.0
Paper (000 mt)
1,760.0
100
1,950.0
23,660.0
20570.0
146
9.2
Caustic soda -(000 mt)
277.0
100
300.0
-
496.0
179
15.8
Soda Ash (calcined soda)
(000 mt)
100
184
16.8
Vegetable oil (000 mt)
993.5
100
1,091.1
1,758.5
177
15.4
Synthetio Rubber (000 mt)
143.0
100
172.0
423.0
260.0
182
16.4
Metallurgical Coke(000 mt)
25.4
100
29.0
38.1
150
10.0
Bricks (000,000,000 units)
9,600.0
100
12,300.0
6,625.0
31,680.0
330
47.0
Cement- (000 mt)
10.5
100
12.4
42.0
23.1
220
24.0
Pig Iron (0000000 mt)
19.5
100
22.2
64.6
34.3
176
15.2
Steel (000,000 mt)
26.3
100
30.3
95.4
42.6
162
12.4
Rolled Steel (000,000 mt)
19.5
100
22.5
74.2
32.0
164
14.1
Nickel (000 mt)
27.5
100
29.0
0.0
42.1
153
10.6
Copper (000 mt)
275.0
100
285.0
10088.0
523.0
190
18.0
Aluminum -(000 mt)
221.6
100
260.0
759.0
576.0
260
35.2
Lead (000 mt)
100.0
100
100.0
221.2
270.0
270
34.0
-R-E-T
SECURITY ION
Approved For Release 1999/09/21 : CIA-RDP79TO 5A000200130003-6
Approved For Release4999/09/21 : CIA-RDP79T00935A000200130003-6
?R-E-T
Item
SECURITY 1TION
Table B
(contld)
USSR Production and Plan Objectives
USSR USSR USSR US' USSR USSR
1950 1950 1951 1951 1955 1955
Index Index
Annual
Increase
Zinc (000 nit)
100.0
100
105.0 845.6
250.0 250
30.0
Tin (000 nit)
8.3
100
9.0 37.9
14.9 180
16.0
Steam and
1476.0
100
1,402.0
238
27.6
gydro TUrbines
100
=.1 11=,
780
131.0
Tractors (000 units)
106.0
100
120.0
126.0 119
3.8
Machine Tools (000 units)
74.0
loo
85.0
222.0 300
40.0
Automobiles (units)
29,000.0
loo
- 60768,000.0
34,800.0 120
4.0
Electric Power
(000,000,000 kwh)
90.2
100
104.0 432.3
163.0 180
17.0
Railroad Freight
(0002000,000 T/km)
601.1
100
672.0 944.0
826.5 135-140
7.5
Truck Transport
(000,000,000 T/km)
25.4
100
46.4 180-185
1645
Ocean Transport
(0000000,000 T/km)
38.0
100
41.0
59.9 155-160
11.5
River Transport
(000,000,000 T/km)
45.2
100
51.0
80.2175-180
15.5
Merchant Ships (000 ORT)
34.0
100
53.0 147.0
133.0 390
58.0
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Release.1999/09/21 : CIA-RDP79T00935A000200130003-6
p1 n
Table C
Percentage Increases in USSR Fifth Five Year Plan
(Arranged by order of magnitude)
Item
fE2e..112I,Eze Increase over 1950
Tractors
19
Automobiles
20
Movie screens
23
Peat
27
Railway transport
35-40
Coal
43
Potatoes
40-45
Flax
Grain
Fr()
Paper
46
Coking coal
5o
Nickel
53
Woolen fabrics
. 54
Leather footwear
55
Ocean transport
55.60
Wheat
55.65
Cotton
55,65
Timber haulage
56
neh
Cotton goods
58
61
Steel
62
Rolled steel
64
Sugar beet roots
65.7o
Butter
72
River transport
75-8o
Pig iron
76
Vegetable oil
77
Sugar
78
Caustic soda
79
Electric power
80
Heavy sheet steel
80
Tin
80
Motor transport
80-85
Synthetic rubber
82
Calcined soda
84
Petroleum
85
Metallurgical equipment
85
Mineral fertilizers
88
Copper
90
Meat
92
ammwswegoinglin
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Release4999/09/21 : CIA-RDP79T00935AQ00200130003-6
S-E-C-R-E-T
Table C
(cont,d)
Percentage Increases in USSR Fifth Five Year Plan
(Arranged by order of magnitude)
Item
Percentage Increase over 1950
Air transport 100
Machine building 100
Rolling equipment 100
Precision machine tools 100
Building materials 100
Canned goods 110
Light section steel and wire 110
Cement 120
Steam turbines 130
Shale 130
Chemical equipment 130
Bricks 130
Zinc 150
Drugs and medicines 150
Aluminum 160
Large machine tools 160
River passenger boats 160
Slate 160
Steam boilers 170
Lead 170
Operation and control instruments 170
Freighters and tankers 190
Furniture 200
Bustless sheet steel 210
Oil equipment 250
Fishing vessels 280
Polished glass 300
Pipelines 400
gydro turbines 68o
Heavy forgings and presses 700
S-E-C-R-E-T
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Releas/awl 999/09/21 : CIA-RDP79T00935A000200130003-6
S-E-C-R-E-T
IV. Economic Aggregates in the Five Year Plan
The Plan text contains selected data on economic aggregates. The
information is not complete enough to permit a systematic analysis of con-
sistency bUt does provide enough to make some preliminary observations.
Appropriate statistics are found in Table A.
It is estimated that in 1951 USSR gross national product was distributed
as follows: investment--25 percent; military expenditures-17 percent;
consumption--54 percent; and government administration--4 percent. Although
the Plan text does not present aggregates in those terms, it can be deduced
from statistics on planned increases in the output of consumers' and producers'
goods that the relative weights of those two magnitudes will differ little.
from the 1950 level, as seen in the following tabulation.
1950 1955 1950
1955
(billions of 1926/27 rubles) %
Producers' goods
158.6 275.8 66.6
67.7
Consumers' goods
80.0 131.5 33.4
32.3
Gross national income is to rise by 60 percent, while gross industrial
output (consumption plus investment) is to rise by 70 percent. If problems
of definition and measurement are ignored, it will mean that the other
components of gross national product will rise by less than 60 percent.
Therefore, it may be concluded that the proportion of resources devoted
to military and administrative purposes may fall and most certainly will
not increase. This conclusion is consistent with the general proposition
that the aim of the Plan is long-term expansion of economic power rather
than immediate expansion of military operational facilities.
Other official figures lend further support to the conclusion that no
increased emphasis will be devoted to the consumption sector. The 15 percent
addition to the money wage bill will be exactly offset by a 15 percent rise
in the nonagricultural labor force. Any increase in the real income of labor
will therefore have to come in the form of reduced retail prices made
possible by increased labor productivity. The Plan proposes an increase of
35 percent in real wages through the price reduction technique, to be made
possible by an increase of 50 percent in labor productivity. A failure to
achieve this high productivity goal would severely limit the chances of a
significant increase in consumer real income.
It will be observed in Table B that percentage increases in production of
many consumer goods items are less than the over-all 64 percent for the group
as a whole. This inconsistency can be explained by the weighting system the
Russians probably employ in constructing their consumer goods production index.
The items which bulk largest in the consumers' budget should be weighted most
S-E-C-R-E-T
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Release.1999/09/21 : CIA-RDP79T00935A000200130003-6
S-E-C-R-E-T
heavily inthe index. In Table B the percentage increase for wheat is 60,
meat 92, sugar 72, and botton fabrics 61. These four items constitute
a large share of consumer goods production. It is the large increases
in these four items that account for the seemingly high rise in the
aggregate percentage.
It is interesting to note that the relative accretion to the labor force
is less than in former plan periods. The 15 percent rise in the labor force
is not much greater than the general population increase. Evidently it is
no longer possible to add to the industrial labor force by drawing upon the
agricultural population. The high goals set for farm products rule against
further reduction in the rural working population.
SER-ET
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Release-1999/09/21 : CIA-RDP79T00935/4000200130003-6
S-E-C-R-E-T
V. Growth Potential of the USSR Economy
This Plan calls for a tremendous upsurge in natural resource
development, in the processing of basic materials, and in machinery
output. Properly interpreted, the USSR contemplates that in 1955
it will have an economy half again the size of the 1950 economy. In
general, the economic system of the USSR is capable of this sort of
growth. To do so requires that consumption levels be held low;
expansion in the consumer& goods sector can proceed at no greater
pace than general expansion. In addition, the building of military
end items cannot be allowed to encroach on expansion in other areas;
the relative share of the military sector must remain about the same.
A large effort must continue to go into investment, a ploughing back
into the economy of a substantial portion of their resources. Under
these conditions the USSR can in general attain the 1955 goals they
have set for themselves.
While in the aggregate the Plan seems capable of achievement,
the details present a less optimistic picture for the USSR. In some
particular items it is dubious in the extreme that the specified goals
can be met. In other sectors, while the Plan is achievable, it would
be straining the economic and technological system to the fullest and it
is doubtful that the USSR is prepared to commit the resources necessary
to attain the particular aim.
Agriculture has long been lagging in the Soviet economy. In keeping
with the balanced progress which is the theme of this Plan, planned
increases for many agricultural products are beyond the capabilities of
the USSR. This is especially true of grains, meat, and potatoes. Other
items, such as hogs, cattle, sheep and goats, fish catch, and cotton,
are possible of achievement, but for some the Plan represents the
outside limits,
In the energy sectors of the economy--coal? petroleum, and electric
power--there is wide divergence in their ability of meeting the Flan.
The coal goal seems quite modest and the USSR is fully capable of
meeting and exceeding it. The goal for electric power is also easily
achievable and will probably-be overfulfilled. The situation in
petroleum is far different.. It calls for 69.4 million metric tons in
1955, whereas Stalin previously claimed that there would be 60 million
metric tons by 1960. This indicates a substantial oil boom. The
general concensus is that, while it is technologically possible, the
USSR cannot in fact achieve the Plan in this respect. Questionable
statistical practices, such as including natural gas with their petroleum
for 1955 but not for 1950, may account for some or all of the discrepancy
in statements. In any case, the Plan for petroleum is much too high.
S-E-C-R-E-T
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved ForRelease4999/09/21 : CIA-R0P79T00935A000200130003-6
S-E-C-R-E-T
The Plan for the iron and steel industry seems realistic and within
the capability of the USSR. Pig iron, raw steel, and railed steel plans
are in the proper balance. The high goal for nickel, in which full
aChievement-is doubtful, indicates that there will be an emphasis on
structural steel.
Construction materials, such as brick, cement, and lumber all have
very high goals. They are capable of being achieved, but only by using
plant facilities to the fullest extent and building new ones. The goal
of almost 32 trillion bricks may indicate a substitution of brick for
structural steel and lumber in construction. The planned increases
for nickel, used in structural steel, in bricks, and in lumber lends
credence to the belief that the emphasis of this Plan is on plant and
plant facilities.
On the basis of ORR estimates covering the last few years, the
planned expansion in nonferrous metals may be overambitious. The planned
increases in lead and zinc production, for instance, are considerably out
Of line with trends from 1949 through 1951 as estimated by ORR. They do
not appear so unrealistic, however, if compared with estimated trends from
1945 through 1948. It is not possible, therefore, to render a firm judg-
ment on the feasibility of plan fulfilment without a thorough re-examination
of the soundness of estimates for the last few years.
Only a small part of the chemical industry is covered in terms of
specific items. But from what is given in the Plan as a whole a general
picture of rapid building is in prospect in the industry. The mineral
fertilizer industry, to which sulphuric acid, ammonia, and nitric acid
are closely associated, has a high planned goal. It seems only barely
possible that the goals can be reached in view of the difficulties the
USSR has had in recent years in building chemical plants. Caustic soda
and chlorine seem possible, as does coke-chemicals.
The transportation sector as a whole can be attained. In rail
transport, where the USSR concentrates its transportation effort, the goal
can be realized. Truck transportation is also possible of achievement.
Water transportation, both river and oceanic, are somewhat doubtful,
and the planned increases are the outside limits.
For the large category of industrial products the Plan itself is
noticeably vague and spotty. A doubling of machine building is planned
and a few specific items are mentioned. Without knowing more about the
composition of these categories it is not possible to judge the capability
of the USSR to meet the stated goals. The 130 percent increase in chemical
equipment seems doubtful, as do the high goals for steam and hydro turbines.
The machine tool and metal cutting machinery categories are so fuzzy that
all that can be said is that substantial increases are possible in the
rather broad category of machine tools, but whether the goals can be
reached cannot be determined.
S-E-C-R-E-T
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Releaee 1999/09/21 : CIA-RDP79T00930A000200130003-6
S-E-C-R-E-T
Considering the emphasis on basic materials, such as metals,
construction materials, petroleum, and electric power, it seems
reasonable to expect substantial expansion in machinery and other
industrial products. But whether specific Plan goals can be met cannot
be assessed.
S-E-C-R-E7T
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Approved For Releaser1999/09/21 : CIA-RDP79T0093516000200130003-6
S-E-C-R-E-T
VI. Implications for Soviet Economic Capabilities for War
The Plan is an obVious indication that the military power in being of the
USSR Wiil-increaSe by 1955 and that its economic capacity for waging a War Will
be larger. These accretions do not necessarily mean, hOwever2 that Soviet power
Will I:improve relative to that of the West. Interpretations Of Soviet economic
potential for War cannot be made without determining in detail military produc-
tion in the entire Bloc, and then relating this to the Bloc's military ability
to conductglobal warfare. In order to make an estimate of this kind a complete
war game study is mandatory.
Leaking Such a- study, Comparison of economic activity between the USSR and
the U.S.', or between the Bloc and the NATO states Can be dangeroualy misleading.
In the first place there is the obvious consideration that the Bloc utilizes a
much greater portion of its total production for military purposes. But even
taking this difference into account, levels of production are only one indicator
in assessing relative power potentials. A myriad of non-economic factors--social,
psychological, geographic and military, among others--enter into power assessments.
Yet it is equally misleading to ignore economic activity as a factor in the
assessment. In economic activity is found one of the greatest disparities between
the-EU? and the NATO states. This disparity is certainly- a major, if not the
primary, element in the West's superior power potential.
? Moreover, a comparison of the USSR with the U.S., even though it ignores the
Satellite states and the states allied and associated with the U.S., is not com-
pletely out of order. This is because the vast majority of Bloc production comes
from the USSR, and because the majority of Western production comes from the U.S.
In comparing the rates of growth in selected segments of the U.S. and Soviet
economies there is thus a limited validity in assuming that these comparisons point
up a change in the power potential of the Bloc relative to the U.S. with its allied
and associated states.
If the Plan is substantially achieved, and there is every reason to believe
that it will be, the economic capabilities of the USSR in 1955 will be much greater
than they are today. Leaving aside the problems of inventories of military hard-
Ware and production of military end items, both of which are most important in
the short run,. it is the opinion of this office that the preponderant economic
superiority ol tile U.S. over the USSR will probably be reduced, perhaps to a sig-
nificant extent. Whereas at the beginning of the Plan the economy of the USSR
was not sufficiently developed to withstand the destruction of a protracted general
war, it will be in a much better position to do so in 1955. Production in the USSR
will remain substantially below that of the U.S., but the ability of the USSR to
divert proportionately more to the military sector mitigates this disability*
From an economic viewpoint, the USSR must be regarded as an increasingly for-
midable foe with an increasing potential for massive war production as a prelude
to large scale modern war on many fronts over a long period of time.
S-E-C-R-E-T
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
CD
a.
0
80
CD
(7)
a)
70
CD
CD
CD
CD 60
CD
2 50
Ca
40
C9
3
a
CD 20
CTI
a
10o
a
a
a
a
a
a
PIG IRON
US Production
64.6
0
1928
1930
1935
1940
22.2
USSR Production
?
1945
1950
SE
SECU INFORMATION
RANGE OF PROBABLE
PRODUCTION
(ORR Estimates-based
on PMPC Report)
Plan
134.3
RANGE OF PROBABLE
PRODUCTION
(ORR Estimates)
1955
MIGNI
120
310 -
20-
o
r.)
6) 0
1928 1930 1935
STEEL
US Production
USSR Production /
95.4
RANGE OF PROBABLE
PRODUCTION
(ORR Estimates-based
on PMPC Report)
plan
42.6
RANGE OF PROBABLE
PRODUCTION
(ORR Estimates)
1940 1945 1950 1955
SE INFORMATION
C
C
C
ICI
C
C
-I
1 GR1249 8-5
140
-0130
-0
20
a_
0
-9.10
CD
CD
61)100
CD
CD
CO 90
k..) 80
7).
70
I:
040
a
a
030
a
a
020
10
SE
SECU FORMATION
ROLLED STEEL
US Production
M.14?111111.11,?M
RANGE OF PROBABLE
PRODUCTION
(ORR Estimates)
Plan
32.0
RANGE OF PROBABLE
22.5 PRODUCTION
(ORR Estimates)
/*
USSR Production ?
??????
CD
CD
CD
CD
CD
9-?000? 1.00Z000'11?6
GR1237 8-52
1928 1930 1935 1940 1945 1950 1955
Approved For Release 1999/09/21 : CIA-RDP79T00935A000200130003-6
Thousands of Metric Tons
1200
1100
1000
900
800
700
600
500
400
300
200
100
SE INFORMATION RANGE OF PROBABLE
PRODUCTION
(ORR Estimates-based
on PMPC Report)
ALUMINUM
US Production
USSR Production,'""/
??????
823.4
Plan
576
? RANGE OF PROBABLE
PRODUCTION
(ORR Estimates)
260.0
1
GR1253 8-52
1928 1930 1935 1940 1945 1950 1955
9-?000? 1.00Z000V6?60016/dCIN-V10
COPPER
US Production
1,292
? Plan
RANGE OF PROBABLE
PRODUCTION
(ORR Estimates-based on
285.0 PMPC Report)
1928
?1"
?????
USSR Production
?
???????
-0
-0