JPRS ID: 10154 USSR REPORT ECONOMIC AFFAIRS

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000400080008-1
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 42
• Document Creation Date: November 1, 2016
• Sequence Number: 8
• Content Type: REPORTS

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R000440080008-1
FOR OFFICIAL USE ONLY
JPRS L/ 10154
2 December 981
= USSR Re ort
p
ECONOMIC AFFAiRS
CFOUO 17/81)
~
FBlS FOREIGN BROADCAST INFORMATION SER.VICE
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2407/42/09: CIA-RDP82-40850R000400480008-1
NOTE
JPRS publications cantain information primarily from foreign
newspapers, periodicals and books, but also from news agency
transmissions and broadcasts. Materials from foreign-language
sources are translated; those from English-langua~e sources
are transcribed or reprinted, with the original phrasing and
other characteristics retained.
Headlines, editori~l reports, and material enclosPd in brackets
are supplied by JPRS. Processing indicators such as [Text]
or [Excerpt] in the first line of each item, or following the
last line of a brief, indicate how the original information was
processed. Where no processing indicator is given, the infor-
mation was summarized or extracted.
Unfamiliar names rendered phonetically or transliterated are
enclosed in parentheses. Words or names preceded by a ques-
tion mark anc~ enclosed in parentheses were not clear in the
original but have been supplied as appropriate in context.
Other unattributed parenthetical notes within the body of an
item originate with the source. Times within items are as
given by source.
The contents of this publication in no way represent the poli-
cies, views or attitudes of the U.S. Government.
COPYRICHT LAWS AND REGULATIONS GOVERNING OWNERSHIP OF
MATERIALS REPRODUCED HEREIN REQUIRE THAT DISSEi~tINATION
OF THIS PUBLICATION BE RESTRICTiD FOR OFFICIAL USE ONL,Y.
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFFICIAL USE ONLY
JPRS L/10154
_ 2 December 1981
USSR REPORT
ECONOMIC AFFAIRS
(FOUO 17/81)
CONTENTS
- ECONJMIC POLICY, ORGANIZATION AND MANAGEN~NT
Management of Industrial Organizations Scrutinized
(A. Nagovitsir~; VOPROSY EKONOMIKI, Jul 81) 1
INDUSTRIAL LEVELOPMENT AN~ PERFORMANCE
Industrial Development During lOth F`i.ve-Year Plan
(Ye. E. Beylina; ISTORIYA SSSR, No 5, 1981) 14
- a - [III - USSR - 3 FOUO]
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFFICIAL USE ONLY
ECONOMIC POLICY, ORGANIZATION AND MANAGEMENT
MANAGEMENT OF INDUSTRIAL ORGANIZATIONS SCRUTINIZED
Moscow VOPROSY EKONGMIKI in Russian No 7, Jul 81 pp 42-52
/Article by A_ Nagovitsnno "The Functions of the Management of All-Union Industrial
- Assoc3ations"/
/Text/ In the Main Directions of USSR Economic and Social Development for 1981-1985
and the Period to 1990 r;~?e task is set "to systematically improve tiie organizational
structures and to increase the efficie~cy of operation of production and industrial
associations on the basis of further concentration, specialization and coopera- �
tion..., to make more precise the general diagrams of the management of sectors,
which have been drawn up in industry, as applied to the tasks of the llth Five-Year
Plan." At present general diagrams of the management of the sector have already
been drawn up and'adopted for 35 industrial ministries, about 500 all-union indus-
trial associations (VPO's) have been formed.
It is well known that industrial associations were formed in place of the former
main production administrations of the sectorial ministries, which were organs of
administrative management, being at the same time a part of the system of the min-
istry, a structural unit of it, The main administrations did not bear material li-
ability for the work of the subsector, since they were budget-carried organiza-
tions, received financial assets centrally for the development of production, mate-
rial incentives and so on.
Unlike the main administration, the VPO is a cost accounting organization, which
has been separated from the management system of the miniatry and unites a large
number of enterprises, production associations, scientific research, planning and
design and technological organizations. The advantage of VPO's as compared with
main administrations consists in the fact that they have their own centralized and
special-purpose economic stimulation funds. This enables them to solve much more
efficiently the problems connected with the drafting and implementation of compre-
hensive plar.s. The managerial staff of the VPO, which heads the industrial associa-
_ tion, has an independent balance sheet and operates on the principles of cost ac-
- counting. Within the VPO there are primary units (independent enterprises, produc-
tion associations and organizations) which are relatively detached from each other.
The legal and organizational basis of the relative detachment of these unit~ is
connected with the combination of the formal attributes of cost accounting (the
right of a legal entity, one's own balance sheet, an established system of planning
and accounting, a current account at Gosbank) with the real attributes (the com-
parison of the expenditures and the results of activity, the self-sufficiency and
1
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
rux urr~uwL u~~, u~LY ~
profitability of production, material interest and liability, day-to-day managerial ~
- independence). Here, whereas enterprises act as a subject of the law, the VPO is
not such a subject. The director of the VPO represents the interests of the asso-
ciation, since the management of the VPO and the enterprises and organizations be-
longing to the complex can be a subject of the law and a legal entity. All this
creates great difficulties in the high quality and quick p~rformance of the func-
tions of management, which have been assigned to the VPO as a unified production
management complex.
A general methodological approach to the category "the function of management,"
first, as a state, legal function and, secoZd, as an ob~ectively necessary type of
administrative labor, which became separated in the process of its specialization
and exercises directed influences on the objects being managed �or the achievement
of the set goal, is observed in a number of works on management.l
The functions of management are broken down into general and specific functions.
Among the general functions are: the organization of work, planning, regulation,
coordination, stimulation and supervision, which are connected with the fulfillment
of general tasks and the tasks typical of the entire management process.2 An impor-
tant place among the indicated functians of management is aesigned to the function
of supervision, which unites all the functions of management in a unified whole.3
P.mong the specific functions are general line supervision, the planning of produc-
tion, including its technical preparation, pr~duct quality control, financial activ-
ity, the selection and placement of personnel and so on.4 Thus, by the category
"the function of management of industrial associations" there should be understood
the types of activity, which are performed by the management af the VPO with the
distinction of both the functi~ns whi~h are comm~n to any management (regardless o.f
the sectorial peculiarities) and the specific functions which are connected with
the peculiarities of the work of the management staff. Here the functions of man-
agenient of the VPO are a componeni: of the activity of the complex as a whole. The
scope of the functions of management depends on the sectorial affiliation of the VPQ,
the territorial distribution of all the enterprises and organizations belonging to
it, tl~e list of output being produced, the cost accounting system, the level of the
mechanization and automation of management work proper, the amount of incoming in-
formation and so on.
The assignment of rights (duties) is reviewed by the executives of the ministry for
� the purpose of exempting the middle level (the VPO's) ~rom the perforcnance of func-
tions not characteristic of them and of relieving the staff of the ministry of the
solution of routir.e questions. However, in practice the duplication of functions
often occurs. The absolute duplication of the management functions of the VPO and
= the sectorial ministr.y is observed with respect ta: the elaboration and approval
of technical and economic standards, their submittal of drafts of state standards
for approval, the drawing ~ of the title lists of construction projects, standard
structures and staff.s of enterprises, the monitoring of the proper use of prices
and rates by enterprises and organizations and so on. Thus, the same responsibil-
ity for the drafting of long-range and current plans of th.e training and improve-
ment of the skills of the regular labor force, the analysis of the state of techni-
cal norm set~ing and so on have been assigned to the administration of the organiza-
tion of labor and wages of the sectorial ministry and accordingly to the department
of the VPO.
2
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFICIAL USE ONLY
The duplication of the manager.?ent functions of the VPO by the ministry causes a con-
tradiction between the central regulation and the cost accounting of the complex
and limi~s the independence of the main units of the VPO. In the general diagrams
of management not all of the measurea on the specialization and concentration of
production are taken into account, the questions of the economic mechanism are
touched upon in part. In some instances haste was observed in the formati~n of as-
sociations, which was not preceded by the planned elaboration of the technical and
economic plans of the complexes, the appropriate substantiated designing and plar_-
ning documents were absent. As a result of this there were not fully taken into ac-
count: the technological similarity of the processes of production and the terri-
torial distribution of the enterprises and organizations being unit+ed, the similari-
ty of the products being produced by them, the existence of stable cooperative ties,
the combindtion of the performance of the complete prac~ssing of raw materials, the
complete or partial centralization of the performance of the production economics
functions of management. The VPO coordinates a number of questions of a production
nature with the ministry due to the lack at the association of the rights of day-
to-day managerial independence. Instances of the direct ties of the staff of the
management of the ministry with production associations and plants, bypassing the
management of the VPO, do occur. For example, often without the consent of the VPO
the ministry withdraws capital investments from the plants of a subsector, while an
order on t.he sending of workers to other plants of the sector is given to produc*_ion
associations and enterprises. The workers of the ministry often make direct con-
tacts with the managers of enterprises on questions of material and technical sun -
ply. These and other shortcomings make difficult the efficient implementation of
progressive measures in the subsector, check the process of the division of labor
and are at variance with standard documents. In a decree of the CPSU Central Com-
mittee and the USSR Council of Ministers (1973) it was noted that "in connection
with the improvement of the organization of the management of industry on the basis
of the creation and development of production associations (combines), all-union and
republic industr~al associations each ministry (department) should concentrate ef-
a forts on the solution of the fundamental questions of the long�~~range development of
the sector and the increase of production efficiency, on the improvement of the sys-
tem of planning and the methods of management, the pursuit of a uniform technical
policy, the assurance of the effectiveness of capital investments, the acceleration
o� scientific and technical progress, the increase of the quality of the products
being produced, the better placement and utilization of specialists, the increase
of labor productivity and the most complete satisfaction of the needs of the coun-
try for all types of products of the sector."
All this attests that the activity of the staff of the ministry, on the one hand,
has not been brought in line with the work of the management staff of *_he VPO. Oi~
the other hand, the work experience of the VPO's and production associations shows
the existence of a number of rights and duties of the middle and primary levels of
management, which act in parallel.
- At present there are only four groups of functions of management, wt~ich have been
assigned to the production as;:ociation, but not to the VPO. Among them are: the
efficient use of the equipmeat o� rail, water, air and motor transport, the sys-
tematic improvement of the organization of loading and unl~ading and materials-
handling operations, the shortening of the layovers of ineans of transportation for
loading and unloading; the tightening up of labor discipline, the improvement of
the forms and systems of wages, material and moral stimulation; the enhan~ement of
the role of mathematical economics methods ar.d the extensive use of computer and
3
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFF'IC1AL USE ONLY
communications equipment in productian management; the implementation of the neces-
sary measures on the protection of the environment against contamination by indus- ,
trial and household discharges.
The duplication ~f the management functions of the production association and the
VPO has the resu"lt that the centralization of the functions of managernent even at
the primary level i~ being accomplished on a considerably smaller 3cale than pos-
sible. For example, in the production associations of light industry the propor-
tion of the functions performed centrally is only 30-40 percent with the economical-
- ly feasibie centralization of up to 70 percent; including 45 percent of the account-
ing and 70 percent of the quality control.5
One of the shortcomings, in our opinion, is the lack in the Procedural Instructions
on the Drafting of State Plans of USSR Economic and Social Development of indicators
which characterize the centralization of the functions of management. The coeffi-
cient of centralization ~f operations for the primary level is calculated as the
ratio between the number of workers with respect to the function being ana,lyzed on
the managerial staff of the production association and the number of workers in the
production units of the association.6 The drawback of such a method consists in
the fact that the number of employed workers inaccurately reflects the amount of
work performed, the actual degree of their workload, which is far from identical,
is not taken into account. The ~..ack of data on the labor intensity of management
operations makes it impossible to determine the indicated indicator and the ratio
of the labor intensity of operations with respect to each function performed cen-
trally to the overall labor intenaity of the operations. It seems to us that it
is possible to assign the operations c~n management between the staff of the VPO and
- the other units of the association on the basis of the coefficient of the central-
ization of the functions of management, that is, as the quotient from the division
of the number of operations with respect to the function, which is perfor.med cen-
trally by the managerial staff of the production association, by the total number
of operations of this function, which is carried out by all the units of the asso-
ciation.
The analysis of the activity of the leading VPO's in the sectorial ministries of
tractor and agricultural machine building, tne electrical equipment industry, in-
strument making, automation equipment and control systems, chemical machine build-
ing and heavy and transport machine building shows that the main functians performed
by them can be reduced to the following: to take part in tha implementation of the
investment policy, to be responsible for the uniform technical policy of the subsec-
tor and for the development of new models, to organize the sharing of experience in
- the area of advanced technology, to bear responsibility for economic and financial
activity, to generalize national and world experience and so on.
The development of industrial associations is being carried out by the centraliza-
- tion of the functions of management in the staff of the VPO with the preservation
of the legal independence of the production units and organizations belonging to the
association. Here the combining of the managerial staff of the association with the
managerial staff of the chief enterprises does not occur in the VPO, as is observed
in production associations. Moreover, the performaace of individual functions takes
place entirely or partially centrally: by the enterprises of the VPO; by new organ-
izations; by an enterprise which is not a part of this association on a contractual
basis; by an organization which was established on a matching basis with other
4
- FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFICIAL USE ONLY
VPO's; by the sectorial ministry in the form of a specialized crganization which
serves a number of industrial associations (for example, for repair) or all associ-
ations (for supply and marketing). The decrease of production costs and overhead
expenses, the reduction of the cost of the managerial and service units, the use of
computers and the availability of the appropriate personnel, who are capable of the
skilled performance of the management functions assigned to them, play an important
role in the choice of one means of development or another. It is possible to ac-
complish the performance of functions in the fol.lowing versions: by means of the
managerial staff of the VPO (complete centralization); mainly by administration~ of
the associations (partial centralization); the concentration of a significant pro-
portion of the operations at the primary level of management.
If the VPO concentrates all the production capacities of the sector for the output
of certain types of products and this specialization is of a long-term nature, the
industrial association is called upon to concentrate the sectoYial functions on the
development of this production (for example, the forecast of the national economic
demands for these products, the planning of the production of its sector, scientif-
ic, technical, planning and design support, the appraisal of the design, the draft-
ing of plans of long-range development, the inspection of product quality). Here
the sectoYwide organs of management should be organized in an industrial complex
and be separated from the central staff of the mini~try. The centralization of
those functions, which are not connected with direct operational management: produc-
. tion, technical and economic planning, the technical development of production,
capital construction, the development of automated control systems, the organiza-
tion of labor and wages, the training of personnel, accounting, legal service,
settlements with the state budget and the bank, is necessary in the staff of the
VPO. Thus, the general diagram of the USSR Ministry of Machine Building for Light
and the Food Industry and Household Appliances provides for the concentration of
all the operations connected with the improvement of the technology of the prepro-
duction of new products. These functions have been assigned to the Orgtekhavtomati-
zatsiya VPO,~ in which the operations on the designing and introducti~n of progres-
sive technology, advanced forms of the mechanization and automation of production
processes and management functions, as well as on the production of accessories,
equipment for standard workplaces and intrashr~p transport are concentrated.
It seems to us that the settlements with the state budget and the bank should be
made by the VPO on the condition that the distribution of the profit obtained by the
entire complex is based on the standards of extended use. Thus, the Ministry of
Instrument Making, Automation Equipment and Control Systems is the only sectorial
ministry in the USSR in which there is a five-year financial plan. However, the
- standards of extended use, particularly of the profit withholding taxes, "became
stuck" at the level of the middle �nit of the management of industry. At present
there is still no reliable analogue of thelr extension to production associations
or large enterprises. In our opinion, in the future the standards of extended use
of industrial associations should be extended to the primary unit--the production
association and enterprise. in the future, when the long-range production and fi-
nancial plans of the middle and primary level of the management of industry should
be drafted with the assistance of computers, the establishment of the relations of
the association with the state budget on a long-term basis will become possible.
In the decisions of the CPSU Central Committee and the USSR Council of Ministers
on the improvement of the economic mechanism it is stipulated that, beginning with
the llth Five-Year Plan, "the ministries and departments along with the draft of
5
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
� v~~ va ~ ~`~~~V Vva. V~\Li
the five-year plan and in conformity with it are to draft five-~ear (with a break-
down by years), as well as annual financi.al plans.... The corresponding financial
plans are also to be compiled for production associations (enterprises)." In this
connection the drafting of the long-range financial plan by the Institute of Elec-
tronic Control Machines of the matheniatical economics modeling of the activity of
the industria? complex in the system of the :~tinistry of Instrument Making, Automa-
tion Equipment and Control Systems is of interest. Thus, for the Soyuzpromavtoma-
tika and Soyuzelektronschetmash associations multivariant forecas~ing and planning
calculations of their development up to 1990 hav~e been made.8
For the purposes of promoting the economic liability of VPO's for the results c.~f
financial and economic activity and increasing their interests in the most efricient
use of material and financial resources the decree also stipulates that during the
current five-year plan the industrial ministries are to establish on the basis of
the assignments approved in the five-year plan a stable standard of deductions from
the profit with a breakdown by years, which is placed at their disposal. The indi-
cated portion of the profit will be allocated for the financing of investments, the
repayment of bank credits, the payment of interest, the formation of the unified
fund for the development of science and technology and other economic stimulation
funds.
The basis of the organization of economic relations in the industrial association
when performing any function is: the existence of sources of expenditures on the
centralized performance of functions; the formation of the appropriate reserves,
the conclusion of long-term contracts between all the main units within the VPO
and with outside organizations; an effective system of claims and sanctions; the
use of prices for the additional stimulation of production (markups and discounts);
the payment of bonuses to workers subject to the functions performed in the a~::~oci-
ation.
If the individual functions are performed centrally by operating or specially cre-
ated enterprzses, the Statute on the Socialist State Production Enterprise serves
as the basis of the organization of cost accoun..ting relations (internal and exter-
nal). The expenditures on the centralized performance of functions are covered by
the following sources: special assets (of a special-purpose order); the funds and
reserves for the performance of individual funetions~ which are accumulated either
on the balance sheet of the managerial staff of the industrial association or on
the balance sheet of a separate organization; the assets of the production deuelop-
- ment fund of the VPO; the saving of resources as a result of the decrease of the
volume of the corresponding types of operations at enterprises and organizations.
The implementation of functions by the managerial staff of the ~ndustrial associa-
tion can lead to an increase of size and the expenditures on its pay even in the
event oE the reduction of the departments at the primary level as a result of the
emergence of a number of new functions of the VPO (for example, patent and licens-
ing work, the study of the demand--curre.nt and long-range--for items produced by
the industrial complex, qual~.ty control, the training of managerial personnel, the
activity connected with the improvement of the management and organizational de-
velopment of ttie association). It i~ possible to achieve a decrease of management
costs for ttie sector (subsector) as a whole in the process of changing over to a
shopless structure. Here the production sections, which are managed by senior
foremen, are subordinated directly to the director, while the entire functional
- staff is concentrated in the plant management. Thus, the changeover of one-fifth
6
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R004400080008-1
FOR OFFICIAL USE ONLY
of the enterprises of the pulp and paper industry to a shopless structure made it
possible to decrease the expenditures on the pay of the managerial staff by nearly
30 million rubles and to re:lease more than 10,000 people. In all 329 shops and
178 production sections were eliminated in the pulp and paper industry.9 Shopless
management is being implemented in nonferrous metallurgy and the timber and wood
processing industry. The experience of the organization of man~gement at the number
of associations of the automotive industry is a modification of the shopless struc-
ture of production. For example, at AvtoVAZ, to which the rights of a VPO have ac-
tually been granted, the management of the shops is carried out by line personnel.
There are a deputy shop chief for the shift, a foreman and a shift chief in each
shift. All the functional personnel, who are engaged in the economic and opera-
tional service of production, repair, material supply, as well as the monitoring of
the progress and preparation of production, have been removed from the shop service
and centralized for the association and the works as a whole.
The further differentiation of the functions of management takes place in the proc-
ess of the social division of labor. This leads to the development of various
services, wliich are formed in the industrial complex. Thus, the centralization of
the repair system can entail the detachment of its service from the enterprises of
basic production. Specialized equipment repair enterprises will be set up within
the VPO. The centralization of the functions of the management of major repair in
the form of the formation of a division of the preparation of production will take
place in the managerial staff of the association. It is expedient to leavn roiitine
repair services at the enterprises (production associations). The possi.bility of
creating special permanent brigades for the performance of major repair is also not
ruled out.
It is possible to carry out the centralization of ancillary and maintenance works
in the extractive sectors, where basic production maintains a finished items cir-
cularity. The centralization of basic and ancillary production is possible in the
er.tractive sectors, since the enterprises are technologically interconnected. This
reflects the unity of the industrial associations as complex systems and the exist-
ence of internal ties not only in basic production, but also in ancillary produc-
tion and maintenance.
When including in a VPO enterprises which are territorially detached, the central-
- ization of the functions of management should be be carried out by groups of enter-
prises. This principle has received the name of the cluster principle, since differ-
erit forms of specialization (item, part, unit) have bean adopted at the enterprises
which have been included in a specific management cluster.
Ttie centr~lization of the functions of day-to-day management, especially at the
enterprises of the VPO, which specialize in the production of component products,
finished items and assemblies, is necessary for the purposes of increasing the re--
sponsibility of the association for current production activity. This will make it
possible to strengthen the coordination of the work of the enterprises of the as-
s~ciation. In this case the functions of planning, scientific and technical prog-
ress, pricing, product qualir.y control~ material and technical supply and marketing
must also be centralized.
At those VPO's, the enterprises of which are territorially detached, the possibili-
ties of the centralization of the functions of management are considerably limited
along the line of basic and ancillary producti~n. In this case the enterprises
7
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR ~OF'F'iCIAL USE ONLY
cannot perform the most important functions wi~h sufficient efficiency. For example,
the study of the needs of the national eco~omy for ttie necessary products of the VPO
requires the creation of a large scientific center, the centralization of calculat-
ing and computing operations and so on.
At present centralization at the prima~y level--in production associations (PO's)--
accompanies the centralization of funct~ons in the VPO. Thus, at the Apatit Produc-
tion Association, which is a part of ~the Soyuzgorkhimprom Industrial Production As-
sociation of the USSR Ministry of the Chemical Industry and has four mines, two con-
centration factories, a large motor transport and rail management, technical train-
ing, accounting, warehousing services, general-purpose loadin~3 and unloading opera-
tions azzd the supply of enterprises and c~ties with electric power and water have
been completely centralized. The new prozedure of performing management functions
is promoting the pursuit of a uniform policy with respect to the production and
socio-economic tasks. However, the complete centralizatior, of such services as the
personnel division, the production control staff and the technical divisions is
leading to undesirable results. I3ere the influence of the managers of the subdivi-
sions on the education of the workers, day-to-day production management and the im-
_ provement of technological processes is decreasing. Therefore every mine and every
concentrar_ion factory has at its disposal a production control staff, a personnel
division, small Iauot and wage groups, planning and technical divisions. Iri this
case the managers of the subdivisions manage production more flexibly. The estab-
lishment of the Krasnyy Bogatyr' Production Associatien made it possible to central-_
ize all the functions of management, the planning of productian and labor, account-
ing, material and technical supply 3nd the marketing of products. As a result of
the decrease of management personnel the expenditures on their pay were reduced by
27,000 rubles. At the Moskovskiy Elektrolampovyy Zavod Association, which consists
of nine enterprises an~ two design bureaus, it was possible to centralize the scien-
tific research and experimental design work and to coordinate it with the prepara-
tion of prod~action. At the same time the "development-introduction" cycle of inno-
vations was shortened by more ttian one-half. As a whole the centralization of the
functions of management made it possible to release at the association 612 workers
of the managerial staff.l0
The degree of manageability of the VPO directly depends on the content of the func-
tions perform2d by the workers of the staff. This should also be the basis for the
' determination ~f the criterion of the structure of the managerial staff. The amount
of work on each function corresponds to the specific divisions of the structure of
the managerial staff into divisions and services.ll
The General Statute on USSR Ministries (1967), in which the formation of new struc-
tt~r~s, including VPO's, was not taken into accour.t, was one of the causes of the
above-indicated duplication of the functions of management by the ministry and the
industrial association. The entire system o` duties and rights of the ministry
was based on the orientation of the management of enterprises, and not production
associations and VPO's. In our opinion, it is necessary to define specifically the
functions of sectorial ministries. This will make it possible to allocate rights
more correctly not only among the line managers of production structures, but also
- among the staff inembers of the functional subdivisions.
The methodological principles of the integrated system of production management,
which were used during the lOth Five-Year Plan in the Ministry of Instrument Making,
Automation Equipment and Control Systems, the Ministry of the Electrical Equipment
8
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFICIAL USE ONLY
Industry, the Ministry of Heavy and Transport Machine Building, the Ministry of
Chemical and Petroleum Machine Building and the Ministry of Tractor and Agricul-
tural Machine Building, should be adopted more extensively in practice for the pur-
poses of optimizing decision making and the expenditures on management. The spe-
cialization of the structural subdivisions of the indicated ministries, including
VPO's, is being carried out with the combination of the linear-functional structure
of management with the goal program structure. This makes it possible to take into
account in the process of management the assimilation of new production and the in-
troduction of modern equipment and so on.
The distribution of the functions of management between the ministry, the VPO and
the primary units is clearly specified with respect to the overall functions of man-
agement. In the rlinistry of Tractor and Agricultural Machine Building, for example,
long-range questions and complex problems of the operation of the sectorial mecha-
nism of management are solved on the level of the ministry; questions of the devel-
opment of the subsector as a unif.ied production management complex are solved on
the level of the VPO; the drafting of five-year plans of retooling and the assur-
ance of their fulfillment are accomplished on the level of production associations
and enterprises. At the different levels of subsectorial management--the VPO, the
production association, the enterprise--the positions of deputy managers for eco-
nomic questions have been introduced, which has promoted the stepping up of the work
en the coordination of the activity of the economic services of all levels of man-
agement.12
Interesting experience ras been gained in. the middle level of management of the
Ministry of Chemical and Petroleum Machine Building, which is based on the fact
that the numher of engineering and technical personnel and employees is calculated
for each management function separately, on the basis of the most important factors
- which influence the amount of work. The degree of economy of the managerial sta�f
and the reduction of the expenditures on its pay are determined by means of an indi-
cator--the proportion of managerial workers in the total number of industrial per-
sonne'. engaged directly in production.
The cnangeover of the Ministry of Chemical and Petroleum Machine Building to th~
star~dard method of planning was connected with the fact that the procedure of deter-
mining the number of engineering and technical personnel and employees, which was
previously in effect, did not take into account the increasing demands on the in-
crease of product quality, the technical improvement of production, the achieved
level and planned increase of labor productivity per worker of' the indu~trial per-
sonnel engaged directly in production. The improvement of management on the basis
cf the adoption of standard structures of the staff and standards of the number of
personnel make i.t possible to identify the unnecessary units of management.
The standard method of determining the number of personnel was used during the lOth
Five-Year Plan for another five ministries: at the associations of the USSR Minis-
try of Light Industry, the liSSR Ministry of Ferrous Metallurgy, the USSR Ministry of
the Coal Industry, the USSR Ministry of Nonferrous Metallurgy and the USSR Ministry
of. the Electrical F.quipment Industry. In conformity with the decree of the CPSU
Central Committee and the USSR Council of Ministers of 12 July 1979 the work in this
direction will also be continued during the llth Five-Year Plan in other sectors of
industry.
9
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
- rult urr~LiAL U~~ UNLY
The difficulties connected with the selection of personn~l, including management
workers, do not make it possible at timea to perform at the proper level the func-
tions assigned to the managerial staff of the VPO, which is created on the average
in 1.5-2 years. At times industrial associations operate without a chief. The man-
ning table is approved, as a rule, before the functions of the future composition
of the managerial staff are determined, that ts, the size of the staff is planned
separately frc~m the fulfillment of the tasks of this organization. The implementa-
- tion of an entire series of ineasures connected with the training of the managerial
personnel of the VPO is required for the successful activity of industrial associa-
tions. Moreover, the question of the seat of the managerial staff of the VPO has
been inadequately thought out. For example, nearly all the VPO's of the Ministry
of Tractor and Agricultural Machine Building (the managerial staffs) are in Moscow,
where, as is known, there is not one tractor plant. In this case the managerial
staff of the industrial association cannot be brought close to production. A simi-
lar situation is also observed in the Ministry of Nonferrous Metallurgy, in which
of the nine VPO's eight are in Moscow, in which there is neither a mine nor a pit
of nonferrous metallurgy.
The analysis of the gained experience of VPO's on the impzovement of the organiza-
tion of management attests to the ine~ficient use of the available reserves. The
necessary criteria, which determine the cooperation of the functional services with
the production subdivisions of tr~e VPO, have not been elaborated. For example,
several services simultaneously take part in the formation of the integrated manage-
ment system of the VPO. The division of lab~r and wages or the division of the sci-
entific organization of labor and management and so on, as a rule, deals with the
organizational structure of the association. Mainly the design and scientific re-
search organizations of the VPO take part in the development of the automated con-
trol system. The functional services of the association, as well as the managers
of the different subdivisions of the VPO take almost no part in the solution of
problems and the adop~tion of the automated control system.
In our opinion, the following requirements are necessary for the determination of
the functions of management of the VPO: first, the assurance in the ministries of
th~ Eunctions of the strategic supervision of the development of the entire sector;
second, the formation of the VPO--the center of the unified production management
complex and the delegation to the industrial association of a portion of the func-
tions ~~ttached to the enterprise and the production assoc~ation; third, the concen-
tration of the management of routine processes in the production associations of the
Vf'0 and the strengthening of day-to-day supervision on this basis. The principle
of the delegation to the VPO of a portion of the rights by both the ministry and the
enterprise should be the basis for the determination of the funct~ons of management
of the VPO. Otherwise the point of the existence of the VPO as the middle level of
management is lost.
The questions connected with the further improvement of the cost accounting of the
VPO for the purpose of ensuring the performance of the functions assigned to it,13
as well as the changeover starting in the llth Five-Year Plan of industrial minis-
tries to cost accounting methods of management are acquiring great importance. In
particular, the ministrie5 have to complete the rearrangement of the organizational
structure of the management of the sector in conformity with the approved general
diagrams, to draft the five-year plan for 1981-1985, including the five-year fi-
nancial plan as a component of it, to implement measures on the increase of the ef-
fectiveness of capital investments, to strengthen the dependence of the wage of
10
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFFICCAL USE ONLY
each worker and the labor collec~ives on the increase ~f iabflr proc'uctivity and to
increase product quality for the purpose of achieving the best end results.
The establishment in the five-year pl.ans of the economic and social development of
VPO's starting with the llth Five-Year Plan of new qualitative indicators and eco-
nomic standards (~aith a breakdown by years) on production, labor and social develop--
ment, finances, capital construction, the introduction of new equipment and material
and technical supply urill strengthen considerably the economic potential of indus~
trial associations, will make it possible to carry out mare efficiently the report-
ing of the plan assignments to the primary units of management and will enhance the
role of industrial associations in the sectorial system oi management.
The extension of the functions of industrial associations will inevitably lead to
the narrowing of the day-to-day managerial independence of ministries and enter-
prises. With the appearance of new fur.ctions "the factor of material interest does
not offset the complications which actually arise during the changeover to the new
structure of sectorial management" and which are connected with the fact that new
functions "must be developed, it is necessary to acquire additional knowledge, to
study."14 The surmounting of this "barrier" is an important task of the improve-
- ment of the activity of all-union industrial associations.
The centralization of the functlons of management is not an end in itself. It is
necessary to carry it out where the flexibility and efficiency of management in-
crease. It is important for the centralization of the functions of management not
to come into conflict with the essence, which consists in the high quality and
rapid fulfillment of the assigned duties.
The further improvement of all the aspecCs of the activity of the VPO should have as
- a goal the transformation of the middle level of management of industry into such a
_ a production management complex, which would be capable not only of assuming respon-
- sibil.ity for the increase of the efficiency and the quality of the work of the mid-
dle level of management of industry, but also of ineeting in due time the needs of
the Soviet people.
FOOTNOTES
1. See "Upravleniye sotsialisticheskim proizvodstvom. Voprosy teorii i praktiki"
/The Management of Socialist Production. Questions of Theory and Practice/,
3d edition, Izdatel'stvo "Ekonomika", 1978,~ 88; V. A. Yeliseyev, "Upravleniye
vsesoyuznym promyshlennym ob"yedineniyem" /The Management of the All-Union In-
dustrial Association/, Izdatel'skoye ob"yedineniye "Vishcha shkola", 1976, p 7;
S, Kamenitser, V. Solomatin, "On the Develnpment of the Management Syseem at the
Enterprise and Association" (in the book "Osnovy organizatsii upravleniya pro-
myshlennym ob"yedineniyem i predpriyatiyem" /The Principles of the Organization
of the zndustrial :lssociation and Enterprise/, issue IV, Izdatel'stvo "Ekonomi-
ka", 1973, p 10) .
2. See B. V. Smirnov, "Funktsii upravleniya sotsialisticheskim proizvodstvom" /The
Functions of the Management of Socialist Production/, Izdatel'stvo "Ekonomika",
1977, p 30.
11
FOR OFFICIAL USE OI~LY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
EOR OFFICIAL USC ONLY
3. "Spravochnoye posobiye direktoru proizvodstvennogo ob"yedineniya, predpriyatiya"
/A Reference Ma.nual for the Director of the Production Association, Enterprise/,
Vol 1, Izdatel'stvo "Ekomonika", 1977, p 21.
~ 4. Academician A. Aganbegyan notes: "It is very difficult to give an exhaustive
list of the functions of manageme~t. On the one hand, there are the general,
'all-round' fun~tions, for example, the management of basic and ancillary pro-
duction, finances, material and technical aupply, manpower resources and so on.
' On the other hand, speciftc functions as applied to the individual subsystems of
management can be distinguished. .And even when examining only the general func-
tions w~ are faced with a great diversity of specific types of management activ-
ity. They are forecasting, planning, programming, designing, the preparation
and making of decisions, supervision, coordination, regulation, adjustment, re-
- conciliation, good management, business correspondence, evaluation, analysis,
monitoring, inspection, accounting, instruction and so on. Of course, all of
these functions are connected and interwoven, some of them 'averlap' each other.
Hence the possibility of distinguishing the key crucial functions of management:
planning; organization; regulation, including accounting and monitoring" (A. G.
- Aganbegyan, "Upravleniye sotialisticheskimi predpriyatiyami" /The Management of
Socialist Enterprises/, Izdatel'stvo "Ekonomilca", 1979, p 10).
S. See "Osnovy organizatsii i nietody upravleniya promyshlennymi ob"yedineniyami i
predpriyati~ami" /The Principles of the Organization and the Methods of the Man-
agement of Industrial Associations and Enterprises/, "Nauchnyye trudy NIIPiNa
pri Gosplane SSSR", Moscow, 1976, p 68.
6. See "Razrabotka normativov chislennosti sluzhashchikh i tipovykh str.uktur appa-
rata upravleniya predpriyatiya i proizvodstvennykh ob"yedineniy" /The Elabora-
~ tion of Standards of the Number of Employees and Standard Structures of the Man-
agerial Staff of the Enterprise and Production Associations/, Moscow, NII truda,
1972, p 34.
7. See EKONOMICHESKAYA GAZETA, No 16, 1976, p 4.
8. See "Problemy finansov v khozraschetnykh ob"yedineniyakh" /Problems of Finance
at Cost Accounting Associations/, Izdatel'stvo "Nauka", 1~78, pp 158-184.
9. See EKONOMICHESKAYA GAZETA, No 19, 1976, p 6.
10. See P. M. Volodin, G. A. Menchinov, "Ray.kom i proizvodstvennyye ob"yedineniya"
/The Raykom and Production Associations/, Izdatel'stvo "Moskovskiy rabochiy",
1980, pp 28, 60.
11. With respect to the primary levels of management the following versions of the
quantitative composition of the staff inembers subordinate to a single manager
were established by expert means: perform different functions--5-7 people;
perf.orm similar functions--8-20 people; perform identical functions--21-50
people (see Spravochnoye posobiye direktoru proizvodstvennogo ob"yedineniya,
predpriyatiya," Vol 1, Izdatel'stvo "Ekonomika", 1977, p 32).
12. V. Polyanskiy, chief of the Economic Planning Administration of the Ministry
of Tractor and Agricultural Machine Building, notes: The functions, rights
and duties of all the structural subdivisions, managers and staff inembers are
12
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFICtAL USE ONLY
allocated vertically from the ministry to the worker at the workplace, while
the interfunctional ties and interrelations of all the organizations involved
in the solution of the posed problems are worked out horizontally" (see VOPROSY
EKONOMIKI, No 8, 1977, p 47).
13. V. Naydenov notes: "That system of management, in which the maximum possible
number of functions are linked up within the cost accounting of the subordinate
units, is the most efficient" (VOPROSY EKONOMIKI, No ]0, 1975, p 67).
14. See KOMMUNIST, No 8, 1975, p 56
COPYRIGHT: Izdatel'stvo "Pravda", "Voprosy ekonomiki11, 1981
7807
CSO: 1820/4
_ 7-3
FOR OFF[CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
- ~~va~ v~ . ~...~na. v..aa; v1~a.a
- INDUSTRIAL DEVELOPMII~iT AND PERFORMANCE
INDUSTRIAL DEVELOPMENT DURING lOTH FIVE-YEAR PLAN
Moscow ISTORIYA SSSR in Russian No 5, 1981 pp 3-25
- /Article by Ye. E. B~lina: "USSR Industrial Development During the Years of the
lOth Five-Year Plan"/
/Text/ The 26th CPSU Congress, which was held in early 1981, outlirted the main di-
rections of the development of the USSR national economy for the llth Five-Year Plan
and the period to 1990. Their achievement should become a direct continuation of
the policy, which was elaUorated by the 24th and 25th party congresses and by now
has been supported by the practical experience of the 1970's. Just as during the
past two five-year plans the main task set for 1981-1985 is aimed at the increase
of the standard of living of the Soviet people. It /"consists in the assurance of
the further increase of the well-being of the Soviet people on the basis of the
_ steady, progressive development of the national economy, the acceleration of scien-
tific and technical progress and the changeover of the economy to the intensive
path of development, the more efficient use of the production potential of the coun-
try, the utmost economy of all types of resources and the improvement of work qual-
ity"/1 /in boldface/.
The policy of the intensification of production, which is integrally connected with
the utilization of the achievements of the scientific and technical reovlution, re-
- tains decisive importance here. Consequently, the role of industrial production,
which is the backbone of the Soviet economy, is increasing more and more. It is
this sector of the economy that provides the national economy with tools of labor,
with the modern technical equipment which is necessary for the reequipment of all
spheres of production, the strengthening of the defensive potential of the country
and the improvement of working and living conditions. On the eve of the llth Five-
Year Plan about 40 percent of aIl those employed in the sphere of physical produc-
tion worked in USSR industry, more than half of a11 the national in~ome of the coun-
try was created here.2
With allowance made for tlie arisen needs and the achieved gains the 26th CPSU Con-
gress indicated the need to henceforth develop industry at a rate exceeding the
growth rate of the other sectors of physical production (agriculture, transporta-
tion, capital construction and others).
What has been said completely determines the scientific importance and urgency of
the study of the means of developing industry during the preceding 5 years and of
the elucidation of the role which this sector played in the increase of the economic
1!~
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
)FFICIAL USE ONLY

r
potential of the country and thereby in its transition t~ a higher level of devel-
opment. It is quir_e clear that the time has not yet come for the full coverage of
- this complicated and multi-aspectual theme, which requires not only collective ef-
forts, but also the substantial enlargement of the group of sources. But it al.-
ready seems expedient today to begin its elaboration. For this we have the deci-
sions of the latest party congresses, the decrees of the CPSU Central Committee,
the speeches of the leaders ot the party and the state, the verbatim reports of the
sessions of the Supreme Soviet, the statistical yearbooks of the Central Statistical
Administration and extensive naterials which were ~ublished in the pages of jour-
nals anci aewspapers.
Within this article the main attention is devoted to the examination of such ques-
r.ions as the accomplishment of scientific and technical progress in industry, the
development of the fuel and power complex, as well as the production of consumer
items, that is, to the portrayal of the main directions, on which the policy of
raising production efficiency and increasing the well-being of the people depended
to the greatest extent.
The lOth Five-Year Flan was conceived of as a new step in the drive for the combina-
tion of the achievements of the scientific and technical revolution with the advan-
ta~es of socialism. During the second half of the 1970's the accomplishment of this
global task was given concrete expression in the current plans first of all in four
directions: in the area of the production of tools of labor, in the improvement of
technolo~ical processes, in the production of materials with preset properties and
in the development of power engineering.3
The drive for scientific and technical progress was also conducted on an extensive
scale during preceding five-year plans. The peculiariCy of the lOth Five-Year Plan
in this respect consisted in the fact that the State Committee for Science and Tech-
no.logy of the USSR Council of Ministers, wnile implementing one of the main direc-
tions outlined by the 25th CPSU Congress, proceeded to the development of compre-
hensive intersectorial programs which envisage the solution of the most important
scientific and technical problems. In contrast to the previously used coordination
plans, all of them, being a component of the socioeconomic developmen~ of the cor-
responding sectors, were fully backed by physical assets and were aimed at the ob-
taining of practical end results. In all during 1976-1980 200 comprehensive pro-
grams were elaborated, which presumed the fulfillment of about 6,000 different as~
signments, the majority of which were specific objects of new technical equipment.4
Of course, this was only a portion of the scientific research being conducted in
ttie USSR, the tocal amount of which was much more. But precisely the comprehen-
si.ve programs, which were of an intersectorial nature, were of especially great im-
portance for the economic development of the USSR during the years of the lOth Five-
Year Plan (half of them were completed in 1976-1980).
First of ail. major measures on the development and improvement of machine building-�-
the basis of the retooling of all the sectors of the national economy--were out-
l.ined in the comprehensive programs. The 25th CPSU Congress indicated the need to
develop machine systems which completely encompass the entire technological process,
the mechanization and automation of labor-consuming types of production, first of
all in the sectors where a considerable number of workers are still engaged in dif-
ficult manual labor. Not only economic, but also social tasks were thereby set for
the sector. Accordingly the turn to the production of sets of machines, the devel-
opment of new technological lines and the increase of the unit capacities of the
15
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
hUK Uhbll~lAL UJ~ UNLY
_ integrated sets were the main directions of the accomplishment of the new aims in
the development of machine buildtng.
Taking into account the ever increasing importance of this sector in the national
economy of the country (machine building and metalworking had at that time more
than 8,500 production associations and enterprises and produced approximately one-
fourth of the industrial output of the country),5 the CPSU Central Committee and
the USSR Council of Ministers adopted in 1978 a decree on the further development
of machine building during 1978-1980.6 The 1980 decree, which was aimed at the
considerable increase of the technical level and competitive ability of inetalwork-
ing, casting and woodworking equipment and tools, was new evidence of the concern
. of the party and the government about the enhancement of the role of the sector in
the development of the scientific and technical revolution.~ A special place in it
was assigned to machine tool building--the key sector of the machine building in-
dustry.
A conference of workers of the machine tool and tool building industry was held in
Moscow in March 1980. More than 750 party workers, executives of ministries and
production associations and leading scientista took part in the meeting of its sec-
- tions. The discussion showed that significant changes in the structure of the
equipment being produced had occurred during the lOth Five-Year Plan. Priority had
been given to the most advanced types: the production of special, standard unit and
unique machine tools and automatic lines was developed rapidly, the output of ma-
- chine tools with numerical control doubled as compared with the Ninth Five-Year Plan.
The proportion of goods of the highest quality category increased by more than four-
fold. On the whole more than 3,500 models of new types of machines, equipment, de-
vices and instruments were developed annually at machine building enterprises. Dur-
ing the years of the five-year plan the series production of 17,300 descriptions of
new types of products was assimilated and started. Each year approximately 1,800
- obsolete designs were removed from production.8
There were maay models of highly productive technical equipment among the items as-
similated by machine building. In the early 1970's the most prevalent power block
had a capacity of 300,000 k[J, at that time several units of 500,000 kW and 3 units
of 800,000 kW were produced. Duri.ng the 1Oth Five-Year Plan power blocks with a
capacity of 500,000 and 800,000 kW were delivered to thermal electric power stations,
while a unique model with a capacity of 1.2 million kW was developed for the Kos-
tromskaya CRES.9
The dynamic development of civil aviation was another vivid indication of scientific
and technical progr~ss in indust.ry. Nearly three-fourths of its passenger traffic
were carried out during the years of the lOth Five-Year Plan by modern I1-62, Tu-154
- and Tu-134 airplanes. Tt~e beginning of the operation of airplanes of a new genera-
tion: the 120-seat Yak-42 and the 350-seat I1-86 aerobus, which embodied many years
of experience of Soviet aircraft construction and the latest technical decisions,
became a noteworthy event in the history of domestic aircraft construction,l0
Considerable technical progress was achieved in the electronics industry, which by
- means of the increase of labor productivity alone doubled the output of products.
The changeover to the planning of scientific research and design development accord-
ing to comprehensive goal programs, which were aimed at the development of new elec-
tronic instruments which meet the needs ot the national economy and the defense of
_ the country, played an important role in this. Minister of the Electronics Industry
16
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFiCIAL USE ONLY
A. I, Shokin, speaking at the 26th CPSU Congress, cited the following characteris-
tic fact: at the beginning of the five-year plan Americans wrote that in micro-
electronics we lagged behind them by 8-10 years, by the end of the 1970's they esti-
mated this gap at 2-3 years and, finally, in early 1981, were forced to admit that
the quality of our products is not lower than American products, while in a number
of cases they are technically more perfect,ll
In implementing the comprehen~ive programs of scientific and technical progress much
space was assigned to the autemation of production processes and the improvement of
- the processes of planning and day-to-day management. At the beginning of 1980 about
4,500 automated control systems, which had been set up almost exclusively on the
basis of domestic equipment, were in operation in the USSR. More than half of the
automated control systems put into operation during the lOth Five-Year Plan are sys-
- tems for the automatic cantrol of complicated technological procrsses in metallurgy,
~ the chemical and pulp and paper industries, power engineering and other sectors of
industry (in 1971-1975 they accounted for less than one-fourth ui al]. the developed
automated control systems).12 The experience of their operati~~ii mrda it possible to
draw the conclusion that they ensured, other things being equal, tiie increase of thc~
output of products, increased their quality and promoted an increase of the propor-
tion of inental labor in the activity of workers.
Industry to a greater and greater extent changed over to the fittiug out of auto-
mated control systems, which were designed for territorial organizations, ministrie~~,
- and departments, with the latest equipment. By the end of the lOth I'ive-Year Plan
they existed in practically all the union ministries and approximately one-third of
ttie republic ministries. More and more complex systems operated in USSit Gosplan,
the Central Statistical Administration, Gossnab, the State Committtee for Science
and Technology and several other organizations. The introduction of automated sys-
tems in the management of industrial enterprises became a vita}3task, since they
covered f.or the time being only 6 percent of the total number.
- In tne middle of the lOth F~ve-Year Plan the proportion of automatic equipmer.t ex-
ceeded 6 percent of the value of machines and equipment. Approximately one-tenth
of the industrial personnel engaged directly in production were e.r.oaged in the main-
- tenance of inechanized, flow anci automatic lines. Automated and completely mechan-
ized (as a wr~ole or with respect to basic production) enterprises provided nearly
one-fifth of the industr:i.al output of the country.l4
At the same time equipment of the first half of our century still predominated in
industry and technology of the same era was used.15 In all the sectors of industry
a considerable portion of the workers were still engaged in the performance of mo- ~
nc~~onously r.epetitive manual operations, which at times were difficult and not harm-
less to ttieir h~ealth. It was impossible to automate many of these operations by
traditional means. Bearing in mind first of all such sectors of work, the 25th
party congress set the task to develop rapidly the production of automatic equip-
- ment with small electronic systems of numerical program control and monitoring.
For this i_t was decided, in particular, to organize the production of automatic
manipulators with program control (robots), which make it p16ssible to mechanize
and automate difficult physical and monotonous operations. The base for such a
technical innovation was created by scientific achievements and by the progress in
the development of industry. The electronics industry changed over to the series
production of microelectronic computing devices. The production of industrial
17
FOR OFFIC[AL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
rux urric.~n~, u~r: uN1.Y
robots, which afforded truly revolutionary opportunities for the further automation
of production, was begun.
The birth of industrial robots naturally ~oincided with the increasing demand for
them: the sharp decrease of the proportion of manual labor had beco~e an ir.idispen-
sable condition of economic growth.
The robots immediately demonstrated great technical and economic merits and ~nsured
a significant increase of the production indicators. At the Kovrov Machinery Plant
of Vladimirskaya Oblast, which produces sports motorcycles, 60 such new devic~s
were used in 1978. In the robot-equipped sections labor productivity increased two-
fold, more than 100 people, who had previously been engaged in difficult physical
labor, were released and a large economic impact was obtained.l~
At the Moscow Khromatron Plant robots lift and move television picture tubes. At
the Leningrad Kirovskiy zavod, Elektrosila, Optical-Mechanical and other associa-
tions they were installed at the stamping presses, machine tools and injr_cting mold-
ing machines. In Krasnoyarsk the specialists of the Sibtsvetmetavtomatika Scien-
tific Production Association jointly with staff inembers of other enterprises and
organi.zations elaborated the Sibirskiy robat Regional Intersectorial Program.18
During the lOth Five-Year Plan machine building enterprises received 7,000 automatic
manipulators, which made it possible to free 20,000 workers from difficult manual
labor,l9
The state plan of the output of manipulators, which was drawn up on the instruc-
tions of the party congress, was considerably exceeded, but the nu~r.ber of orders of
industry greatly exceeded the number of robots which industry had.
Taking into account the great promise of the introduction of robots in the national
economy and the need for the comprehensive solution of the questions of the further
- scientific elabcration of the problem and the organization of ~eries production,
the CPSU Central Committee and the USSR Council of Ministers, relying on the abun-
dant experience which had been gained by that time, in 1980 adopted a decree which
- provides for the more rapid introduction of manipulators both in industry and in
other sectors of t}~e national economy.20
The problem of the automation of production, of the use of machine tools with numeri--
- cal control and the use of computers, robots and other achievements of the scientif-
ic and technical revolution has acquired particular urgency in connection with the
overall state of manpower resources, which had arisen by the end of the lOth Five-
Year Plan.
The 1970's as a whole were characterized by a quite favorable demographic situation
from the standpoint of the natural increase of the able-bodied population: its ab-
solute average annual increase during 1971-1~78 was greater than during 1961-1970.21
The generation of young people born during the 1950's, when the level of the birth
rate was the highest during the postwar years, reached able-bodied age. This situ-
~ ation was especial.ly impor.tant under the conditions when a high degree of involve-
ment of people of able-bodied age in social production had already been achieved,
the reserves of the population previously not employed in social production were
practically exhausted, the influx of rural inhabitants to cities had decreased con-
siderably and young people became the main source of the reinforcement of industrial
personnel.
18
, FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFICIAL USE ONLY
During the years of the lOth Five-Year Plan the number of workers and employees in
~ ~ the national economy of the country continued to increase, although slightly more
slowly than during the preceding period.22 The contingent of thase employed in in-
dustry increased considerably, and the growth was even greater than in the earl~
- 1970'.s (during 1976-1979 alone the number of industrial personnel engaged dire~tly
in production increased by nearly 2.5 million, which is equal to its increase dur-
ing the entire Ninth Five-Year Plan).
At the same time the clear tendency for tYie new reinforcements to decrease both in
industry and in the entire national economy appeared by the end of the lOth Five-
Year Plan. Whereas in 1976 the increase of the regular labor force in industry was
- 572,000, while decreasing subsequently, in 1979 it was already 300,000 less.23 This
- was connected with the fact that beginning in the late 1970's the comparatively
small generation of young people born in the 1960's began to reach working age. An
even sharper decrease of the influx of young people will occur during this decade.
According to the estimates of economists, the increase of the population of able-
bodied age will decrease during the 1980's as compared with the 1970's from 18 to
3.8 percent.24 The delayed demographic consequences of the war are having an ef-
- fect. Under these conditions the economical, efficient use of manpower resources
is becoming a more and more vital problem~
Foreseeing the decline of the growth of manpower resources, the CPSU Central Com-
mittee in ~ood time set the task to create a machine building base for the consider-
able reduction of unproductive manual labor. A program of the rapid development of
the production of the appropriate equipment, which was intended for 8 years, was
adopted back in 1973.25
riuch was accomplished during the years of the lOth Five-Year Plan. More than
1.5 million people were released from difficult manual labor. The initiative of
the workers and engineering and technical personnel of Zaporozh'ye, who started
the movement under the motto "Manual Labor Onto the Shoulders of Machines," becamr-
widespread. And still the proportion of manual labor in industry for the present
remains hi.gh, especially in auxiliary operations, �irst of all materials-handling
and loading and unloading operations. The supplanting of manual labor has pro-
ceeded more slowly and with greater difficulr3~ than anticipated. The situation has
also been aggravated by the fact than none oi the materials-handling equipment
plants of those planned to be started up by the end of the five-year plan have yet
been put into operation.26
- The dynamic development of the automotive and tractor industry was of great impor-
t~nce for the accomplishment of the tasks set by the party and the government. The
automotive sector, as Minister V. N. Polyakov noted at the 26th party congress, ex-
perienced during the 1970's "a genuine rebirth."27 During the years of the lOth
I'ive-Year Plan the new unique KamAZ complex, which in 1980 produced its 200,OOOth
truck, was put into operation; the Volga Motor Vehicle Plant achieved a level of
production of 660,000 Zhigulis a year.
'The mar_erial and technical base of agriculture was strengthened by means of the in-
crease oF ti~e production of tractors and agricultural ma~chinery. But the dynamic
increase of the level of complete mechanization was checked by the lack of special-
ized machines for the mechanization of the labor-consuming processes of the tilling
of many crops in farming, as well as by the output of some machines of a low tech-
nical level and quality.28
19
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
~ ~i~� V~ ~ ~\+~AU VJIi VI\L~�
A number of other factors also complicated the drive for technical progress and
slowed the turn to the intensification of production. Nevertheless the development
of machine buiiding--this base sector of industry--proceeded more rapidly as com-
pared with other sectors, having an ever increasing influence on the progress of
the Soviet economy as a whole.
The fuel and power complex is another such base sector. In the middle of the
1970's, when the energy crisis broke out in the capitalist world, the achievements
of the USSR in the production of petroleum, gas and coal and the generation of elec-
tric power demonstrated clearly the advantages of a planned economic system. As
was emphasized at the 25th CPSU Congress, the Soviet Union is the only major indus-
trial state in the world, which bases its economy on its own fuel and energy re-
sources.~9 This situation was based on the enormous gains in the development of
the fuel and power sectors, which were made by the begini?ing of the lOth Five-Year
Plan. The USSR, which held first place in the world in the production of coal and
petroleum and second place in the production of gas and has sufficient proven re-
serves of fuel, has demonstrated a steady dynamic growth of the national economy.
In 1975 490.8 million tons of petroleum (including gas condensate), more than
- 289 billion m3 of gas and 701.3 raillion tons of coal were extracted from the ground.
Yetroleum and gas accounted for two-thirds of all the resources of the fuel balance
of the country (in 1960 t~.heir proportion was only a little more than one-third).30
The change in the str~:cture of the fuel balance of the country in the direction of
the increase of the proportion of petroleum and gas as is known, provided great
advanta~es to the national economy of the country.3~ They were connected with the
enormous saving of assets, the reduction of the production cost of fuel and the de-
velopment of the most advanced works. All this taken together made a significant
contribution to the increase of the industrial potential of the country, the level,
needs and means of which in the middle of the 1970's differed most significantly
from the analogous indicators of the late 1950's, when coal predominated in the
_ fuel balance.
The achieved gains, which were connected with the scale of production, the gained
experience and the training of personnel, in the opinion of some planning workers
- and managers, who were directly concerned with the development of certain sectors
of the fuel industry or others, it would seem, also predetermined the further in-
crease oi the production capacities in the directions which had so brilliantly
shown their worth during the preceding years.
_ The CPSU Central Committee, having thoroughly analyzed the changed situation in the
- fuel industry and the new possibilities of progress of power engineering, which re-
sulted from the scientific and technical revolution, drew a different conclusion,
which was set down in the decisions of the 25th CPSU Congress--the need to increase
in the future the power potential primarily by means of water power, nuclear fuel
and inexpensive coals. As to petroleum and gas, the increase of their production
should be aimed to a greater and greater extent at technological needs, in the
form of raw materials for the chemical iiidustry.32 The huge amounts of petroleum
and gas being extracted from the ground, given such an approach, should be used
more efficiently and economically than before (suffice it to say that during the
second half of the 1970's more than '~alf of all the fuel being produced was con-
sumed for the generation of ther:nal energy and electric power and 100 million tons
of petroleum products, 30 million tons of coal and 100 billion m3 of gas were
consumed annually at electric power stations alone).33
20
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFFiCIAL USE ONLY
_ It is appropriate to note that the feasibility of such a policy of using petroleum
as a raw material for the chemical industry was theoretically substantiated back in
the times of D. I. Mendeleyev. But only under the conditions of the developed sci-
entific and technical revolution did the shift to such a policy become practicable,
were the technology and organization of production raised to the level necessary
for this. It is a matter not only of the economic and technical substantiation of
the use of petroleum as a raw material for further processing, but also of the fact
that under present conditions a real opportunity has appeared for the gradual de-
crease of the proportion of petroleum in the fuel balance.
Precisely for this reason the 25th CPSU Congress emphasized that the qualitatively
new large-scale problem of rearranging the fuel balance of the country had arisen
for the national economy. It was of a long-term nature and required the correspond-
ing efforts on the part of the state and society as a whole. The solution of such
a problem, which is first of all directly connected with the extractive sectors of
industry, presumed the use of a comprehensive approach, the increase of capital in-
vestments in science, machine building, transportation and the training of person-
nel. At the same time it was a policy of the development of new regions and the
commitment to the economic turnover of the inexpensive coals and water resources of
Western and Eastern Siberia, Kazakhstan and Central Asia. Characterizing the fuel
= and energy program, Chairman of the USSR Council of Ministers N. A. Tikhonov said
that in 1981-1985 tlie increase of the generation of electric power will occur for
the most part due to nuclear fuel, water power and the use of coals in the eastern
- regions of the country. It is planned to obtain at nuclear and hydroelectric power
stations more than 70 percent of the increase of the generation of electric power,
and in the European part of the country nearly the entire increase of its genera-
tion.34
This change began to be made directly during the second half of the 1970's. This is
especially important to note as the expenditures whicti were made, just as the ef-
forts of many large collectives, of course, had not yet been able to obtain visible
reflection in the results of the lOth Five-Year Plan. At the December (1977) CPSU
Central Committee Plenum it was frankly emphasized: "...Looking at things realis-
tically, it will apparently have to be admitted that in the next 10 years petro-
leum and gas, first of all from Tyumen', will retain a decisive role in the provi-
sion of the country with fuel and power."35
The development of the productive forces of Western Siberia was recognized as a
program of particular importance for the lOth Five-Year Plan. It is significant
that in the early 1970's "The Main Indicators of the Development of the National
Economy of Tyumenskaya Oblast" already existed as an appendix to the plan of the
economic and social development ot the country. This document contained assign-
- ments, whicti were addressed to each ministry, on the production volume of the most
important types of output, on the amounts of capital investments, on the placement
of housing into operation and so on.36 During the lOth Five-Year Plan the Commis-
sion of the Presidium of the USSR Council of tiinisters for the Western Siberian
Petroleum and Gas Complex, as wel.l as an interd~partmental commission attached to
USSR Gosplan and located in Tyumen' were established for the coordination of the
operation of different organizations working in the Ob' River region and the elimi-
nation of departmental isolation.3~ The questions connected with the development
of the industry of the region were regularly examined at the plena and in the Polit-
buro and Secretariat of the CPSU Gentral Committee~
_ .
21
- FOR OFFICIAL USE ONLX
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFICIAL USE ONLY
In 1980 the CPSU Central Co~nittee and the USSR Council of Ministers took addi-
- tional steps which were aimed at sharply increasing the scale of capital construc-
tion in the region of the Western Siberian Petroleum an~ Gas Complex. A conference
specially devoted to the development of this region was held in the Central Commit-
tee after the outlining of the program of work. Such ministries as the USSR Minis-
_ try of Construction and the USSR Ministry of Construction of Heavy Industry Enter-
prises received important assignments on the building of projects. Additional
dutieG on the construction of housing were assigned to construction trusts of Moscow,
Leningrad, the Ukraine, Belorussia, Uzbekistan, Kazakhstan and the republics of
the Soviet Baltic area.38
lluring 1976-1980 the Soviet state channeled enormous amounts of assets into the
construction pro~ects oftdestern Siberia, and precisely the lOth Five-Year Plan ac-
counts for two-thirds of all the investments in this petroleum and gas complex,
which have been made in the last 15 years.39 Large skilled collectives, which have
- gained considerable work experience under the specific conditions of the north, have
been formed here. In 1980 the Molodogvardeyets All-Union Komsomol Shock Detachment
began its work in Tyumen'. In all more than 500,000 people worked on the prospect-
ing and working of deposits and the building of cities, transportation and power
lines. This figure exceeds by two- to threefold the number of those employed dur-
ing the period of the greatest development of construction operations and operation-
al development at such most important production investment complexes as the Volga
Motor Vehicle Plant, the Western Siberian Metallurgical Combine and the Angara-
- Yenisey Power Industry Complex.40
The complete mechanization and automation of operations and the introduction of a
new, economical technology became a firm foundation of success in the development
o� the natural resources of the Ob' River region. T.he directional cluster method
of drilling was used extensively. Along the with construction of isolated sii:gle
wells they began to drill them 18 at a time.at a single site. At the end of the
five-year plan more than two-thirds of all the fields were completely automated.
Computer centers, which were hooked up with the unified automated contr.ol system,
were set up i.n all the petroleum-producing regions. A considerable stock ~f equip-
ment, machines and machinery was concentrated in Western Siberia. Many scientific
and technical decisions, which were used at the petroleum and gas Fields, were
unique and were being used for the first time in this territorial production com-
plex. The level of ~he equipment, automation and remote control was such that the
Tyumen' workers achieved the highest labor productivity among the petroleum indus-
try workers of the country.
In Western Siberia the 1 billionth ton of petroleum since the start of the working
o: the ~?epos?rG waG extracted in the mtddle of the five-year plan. This significant
mark coincided with the start of a new stage in the development of this promising
- region,.~l The point i~ that during the preceding decade the famous deposits of
Samotlor, Ust'-Balyk and several others, which had already reached the rated capaci-
ty and had achieved the peak of production, were the main point of the exertion of
efforts. It was necessary to go farther north and to develop less productive de-
posits, where in order to obtain the same increase of production it was necessary
to increase considerably the amount of drilling, to build new reads, to construct
settlements and so on. The production of gas was developed in even more remote
northern regions--in Urengoy.42
22
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2407/42/09: CIA-RDP82-40850R000400480008-1
FOR OFFICIAL USE ONLY
Under the conditions of the advance into hard to reach uninhabited regions the work
shift and expeditionary methods of the organization of work acquired great importance 43
- In the case of the work shift system the workers and their families lived in per-
manent population centers--base cities with a developed socioecanomic infrastruc-
ture, in the regions of the main production of the Ob' River region, such as Nizhne-
vartovsk, Nadym and others. Work shift settlements were set up directly at the
fields, where the petroleun? industry and gas industry workers were transported by
airplanes and helicopters. The expeditionary system presumes the interregional use
of manpower resources: the transportation by air transport of the necessary per-
sonnel from the old petroleum regions, where the opportunity arose to release a
portion of the skilled personnel in connection with the depletion of a number of
deposits (these are first of all Tataria, Bashkiria and other regions of the "Sec-
ond Baku").
All this as a whole also determined the scale of the industrial transformation of
the vast territory, which would have been impossible without the basic breakdown of
the traditional means and methods of the development of new regions. It is general-
ly acknowledged that in the world economy there are no analogues to the rate of de-
velopment of the Western Siberian Region. The production of petroleum, which had
just begun in the middle of the 1960's, reached 147 million tons in 1975 and more
than doubled during the lOth Five-Year Plan. In 1980 312 million tons of petroleum
(including gas condensate) were recovered here, dtiring the years of the lOth Five-
Year Plan alone the increase was 165 million tons. The production of gas in 5 years
rose more than fourfold (from 34 to 156 billion m3). The proportion of the region
in the total production of gas in the country came to 52 percent and of gas--37.4
percent. In 1980 Western Siberia provided more than 10 percent of thE world pro-
duction of petroleum and gas,44
Ott~er regi.ons also made a significant contribution to the strengthening of the in-
dustrial potential of the country. On the average about 95 million tons of petro-
leum were produced annually in Tataria, Bashkiria persistently provided 40 million
tons (and this is under the conditions of a difficult stage :�n the working of the
deposits of. these autonomous republics, just as of the entire "Second Baku" as a
G~hole, which is connected witti the decrease of the resources of local hydrocarbon
raw materials).45 The contribution to the all-union production of the new regions
incr~:ased: the importance of the Mangyshlak deposits grew; the Komineft' Trust,
liavin~ increased the production of petroleum during the five-year plan by more than
'?.5-fold, moved in the absolute amounts of production from 16th to Sth place in
the country,46
The production of gas increased significantly at the Timano-Pechorskiy Complex,
wliich is being formed. In 1980 the Orenburg gas industry workers provided about
50 billion m3. In all duxing the final year of the five-year plan 603 million tons
of petroleum (including gas condensate) and 435 billion m3 of gas were produced.
At the 26th congress USSR Minister of the Gas Industry S. A. Orudzhev summed up the
development of the sector: the plan of the lOth Five-Year Plan was exceeded, labor
productivity increased rapidly. The role of natural gas in the national economy of.
tlie country is great: nearly all the steel and pig iron, mineral fertilizers, and
60 p~rcent of the cement being produced are made using it. Nearly 200 million
people used gas in everyday life. The unified statewide gas supply system, the
largest in the world in productivit and the power-worker ratio, was set up and
operated successfully in the USSR.4~
23
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
It is especially important to note the achievements of the gas industry workers as
the sector exceeded the plan assignmen~s, while the petroleum indus try workers fell
a little short in their fulfillment, and the coal industry, operat ing during the
last years of the five-year plan with a great strain, did not fulf ill the assign-
ments on the increase of the production of fuel and the growth of labor productivity
(some objects under construction were not put into operation on time, many mines
needed renovation).48
It would be incorrect, however, to evaluate unequivocally the overall process of
the development of the coal industry during the second half of the 1970's. Impor-
tant changes also occurred r~ere. They were connected not only with the retooling of
the old mining centers--the Donetsk, Kuznetsk, Pechora and Karaganda basins, which,
as before, supplied the national economy with the bulk of the needed solid fuel.
The Kuzbass alone provided one-fourth of the hard coal and one-third of the coking
coal which are mined in the country. During the years of the lOth Five-Year Plan
a decree of the CPSU Central Committee and the USSR Council of Mini sters was
adopted, which outlined the prospects of the further deve.lopment of the Donbass.49
The fact that during this period the proportion of the eastern reg ions in coal min-
ing increased, was of particular importance. The coal industry of the country has
changed its geography considerably, has enlarged the arsenal of tec hnical decisions
, being used and has improved the technology of mining.SU
Ekibastuz in Kazakhstan became a vivid sign of the new undertakings. The working
_ of this deposit had been carried out on a comparatively small scal e since the early
1950's. But with the appearance alone of powerful equipment for the open-cut min-
ing of coal Ekibastuz joined the ranks of the most promising basins of the country.
The construction of the Bogatyr' Open Pit, the largest in the world, at which the
mining of coal is carried out by means of heavy-duty rotary excavatars, which were
developed at the Novyy Kramatorsk Machine Building Plant (each such excavator, the
crew of which consists of 11 people, in productivity exceeds the largest modern
mine), was completely finished here by 1980. In 1980 Ekibastuz pro duced 67 million
- tons of coal--threefold more than in 1970. The coal mined in the basin has become
the least expensive in the country. An entire cascade of thermal electric power
stations is being built at the base of the Ekibastuz deposits; in I980 two power
blocks of the first GRES with a capacity of 0.5 million kW each we re already pro-
viding a current.51
The experience gained at Ekibastuz is of all the more importance a s the tasks of
the similar use of loca~ coals, which were placed by the 25th CPSU Congress among
rhe most important tasks, have been set down in the decisions of the 26th party con-
~ress. Among the especially promising tasks is the construction of the Kansk-
Achinsk Fuel and Power Complex (KATEK). The second half of the 1970`s was for
the new lignite basin a kind of start: the pilot production section of the new open
pit was assimilated the first millions of tons of coal weLe shipp ed for experi-
mental combustion.5~
The lOth Five-Year Plan brought to life another coal center in the eastern part of
the country--in Yakutia. When the construction of the railway line, which received
- tlie name "Little BAM," was completed ahead of time, it became poss ible to begin the
open-cut mining of Yakutian high-g~ade coking coals in Neryungri, which are neces-
sary for the metallurgical plants of Eastern Siberia and the Far East.
24
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFF'ICIAL USE ONLY
For the country as a whole open-cut mining increased, making up more than one-third
or the total amount of coal brought to the surface.53
An important role in the solution of the energy problem is being assigned to hydro-
electric power stations. In 1979 the Nurekskaya GES, the largest in Central Asia,
reached full capacity, 5 of the 10 units being built at the Sayano-Shushenskaya
station provided a current. The Ust'-Ilimskaya GES on the Angara was put into per-
manent operation. In all hydroelectric power stations accounted for more than
14 percent of the generation of electric power in the country (in 1975--12.1 per-
cent),54
During the second half of the 1970's nuclear power engineering made a mighty spurt.
The extensive multilevel set of achievements, which became a reality only under the
_ conditions of the scientific and technical revolution during the era of the trans-
formation of science into a direct productive fo~cce, was the basis for it. The
first atomic reactors were created as experimen*~1 reactors. During the years of
the lOtti Five-1'ear Plan the production of equipment for nuclear electric power sta-
tions was placed on an industrial flow. Many operating reactors bear the trademark
of the Leningrad Izhorskiy Plant. The 25th CPSU Congress directeci the attention of
the collective of Izhorskiy worke rs to the organization of the series production of
power blocks with a capacity of 1 million kW ("millionaires"). In fact this led to
the renovation of the enterprise, the reorganization of all the shops and the place-
ment of new production spaces into operation. The updating of production was car-
ried out in close cooperation with the Ukrainian Institute of Electric Welding
imeni Ye. 0. Paton and. other s~ientific institutions. As a result the outlined as-
signments were exceeded: the series production of "m~llionaires" was begun; in
5 years the plant made up 16 bloc ks of nuclear electric power stations.55
The development of various equipment for nuclear electr_~~ power stations also be-
came a most important matter for many ot~er enterpri:>es. The Yuzhno-Ukrainskaya
station, for example, was equipped with products cf.the Leningrad Elektrosila As-
sociation, tlie Kaluga and Khar'kov turbine plants.56 For the purpose of placing
nuclear power engineering on an industrial basis it was decided to increase the
capital investments in this secto r during the lOth Five-Year Plan by twofold as
compared with the preceding five-year plan. The building of a large center of nu-
clear power machine building in Volgodonsk, which was designed for the series pro-
duction of nuclear reactors, held a special place in the outlined program. In an
unusually short time the capacities of 4 million kW of the reactors and equipment
- were put into operation ahead of time. In early 1981 the vessel of ehe first re-
actor was produced at Atommash. All this gave the 26th party congress grounds to
draw the conclusioci that a new sector of industry--nuclear machine building--had
been created in the USSR.S~
During the years of the lOth Five-Year Plan the achieveme:~ts of Soviet science, the
progress in the field of machine building and the experience of operating power
blocks of various types made it possible to proceed to the extensive construction of
nuclear electric power stations. The USSR started the five-year plan having a num-
ber of large nuclear electric power stations with a total capacity of more than
5 million kW.58 During the second half of the 1970's the first station in the world
to be built in a seismic area was put into operation in Armenia, two large blocks
- of the Kurskaya AES were startsd up, later there followed the firstlings of UY,rain-
ian nuclear power engineering--the Chernobyl'skaya station near Kiev and the
25
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R040400080008-1
N'U!i UN'M~ILIAL UJ~: UNLY
Rovenskaya station, new blocks of the Bilibinskaya station on the Chukotskiy Penin-
sula and of the Novovoronezhskaya AES. With the placement into operation of the
- fourth 1 million kW reactor the Leningrad station became one of the largest in the
World. Construction was also performed in Lithuania, Smolensk and Kalinin. In
1979 12 nuclear electric power stations with a capacity of more than 25 million kW
were in operation in the country.59 Nuclear electric power stations were built al-
most exclusively in the European part of the USSR, in regions of considerable power
consumption which at the same time are remote from deposits of coal, petroleum and
gas. The placement of large reactors into operation led to a significant decrease
of the production cost of the obtained power.60
The rate with which nuclear power stations and the main principles ~f their opera-
tion were improved is significant for the age of the scientific and technical revo-
_ lution. During these years the Beioyarskaya AES in the Urals, at which in 1980 the
largest fast reactor was started up (so-called uranium-graphite boiling water reac-
tors were in operation at nearly all the stations, starting with the first experi-
mental reactor in Obninsk), aroused the greatest interest. The idea of developing
such a block arose long ago, but must time and effort were required for its realiza-
tion. Science and industry had to develop fundamentally different equipment, which
_ was capable of sim~sltaneously withstanding enormous doses of radiation and a high
temperature and of ineeting the needs of the specially developed reactor cooling sys-
tem. As a result a new scientific and technical solution was found, which makes it
possible to use nuclear fuel more efficiently.61 With the start-up of the new block
of the Beloyarskaya AES fast reactors acquired industrial importance.
With respect to the growth rate of the capacities, nuclear power engineering was far
superior to any sector of the national .economy. In 1980 nuclear electric power sta-
tions generated 73 billion kWh of electric power (that is, 1.5-fold more than was
g~nerated throughout the country on the eve of the war or during the first postwar
year). And although in the total electric power balance of the USSR nuclear power
engineering for the present accounts for only 5.6 percent, the outlook of its de-
velopment does not arouse doubts.62
The generation of electric power during the lOth Five-Year Plan was only one of the
directions in the use of the peaceful atom. Nuclear plants helped to desalinize
sea water on the Mangyshlak Peninsula and supplied heat to the settlements and mines
on the Chukotskiy Peninsula. In Gor'kiy the construction of a nuclear heat supply
station was in full swing. In 1977 the "Arktika" nuclear icebreaker was the first
surface vessel in the world to reach the North Pole. This task was set not out of
considerations of prestige; its content was exclusively an applied science one.
Using the experience of the "Arktika," the following year the nuclear-powered ves-
sel "Sibir led a carrying vessel by the shorteat route through the high latitudes
from Murmansk to the Berir.g Strait. Owing to nuclear icebreakers year-round naviga-
tion was ensured on the Murmansk-Dudinka line, which connects the mainland with the
industrial region of Noril'sk. Another modern nuclear icebreaker, the "Rossiya,"
was laid down at the end of the five-year plan.64 All these m~ans of using nuclear
power engineering were clear evidence that it had actively invaded all areas of
power consumption.
As a whole in 1980 all the electric power stations generated 1,295,000,000,000 kWh
of electric power. A new important step was taken in the formation of the Unified
Power System of the country: the United Power System of Siberia was connected to
26
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFFICIAL USE ONLY
it, as a result of which the USSR Unified Power System covered a territory with a
population of more than 220 million.65
Summing up at the 26th CPSU Congress the development of power engineering, first of
all nuclear power engineering, and noting the scale of the work in the area of the
exploration for reserves of petroleum and gas and the organization of their recovery
and transportation, President of the USSR Academy of Sciences A. P. Aleksandrov em-
phasized: "An energy crisis does not threaten us even in the distance future."66
The development of the base sectors of industry was the foundation, by relying on
which the party continued the drive for the implementation of its economic strategy.
The fundamental aims of this strategy were formulated back in 1971 at the 24rh CPSU
Congress. In their main tasks and main directions of economic activity the Ninth
and lOth Five-Year Plans were as if a unified whole.6~ The question of the con-
siderable increase of the material and cultural standard of living of the people and
the implementation of such extensive social programs as history had not previously
knowns held a centr.al place in each of them.
- In 1975 the average monthly wage of workers and employees was about 146 rubles. The
tendency for it to increase was also characteristic of the second half of the 1970's.
The increase of the minimum wage to 70 rubles a month was completed everywhere. The
rates and salaries of workers of the nonproductive sectors rose; as a result another
31 million workers and employees received a significant raise. In 1980 the average
wage came to 168.5 rubles a month.68 The personal savings of workers increased sig-
nificantly: in 1980 the deposits of the population in savings banks exceeded
156 billion rubles. On a per capita basis the average size of a deposit was more
than 500 rubles, that is, was approximately 10-fold more than in 1960 and 3-fold
more as compared with 1970.69
Of course, given such an increase of the monetary income the task of improving the
supply of the population with foodstuffs, as well as industrial consumer goods
moved to the forefront in the increase of the standard of living of the workers.
The importance of this problem also stemmed from another, no less important factor:
a shortage of consumer items decreases the stimulating role of wages. Economic
practice has clearly attested that without the timely payment to the b~:3get of the
money from the sale of goods to the population the state wiil experience a shortage
of the financial resources which are necessary for the overall development of the
economy.
The comprehensive solution of these difficult problems made it possible at the turn-
ing point between the 1960's and 1970's to plan and begin the fundamentally impor-
tant turn of industry in the direction of the more and more rapid increase of the
material well-being of the people. The amounts of capital investments in light and
the food industries increased during the second half of :he 1970's. They annually
exceeded 5 billion rubles, that is, the annual investments exceeded by 1.5-fold the
amount of all the prPwar investments in the industrial production of consumer
items.~~ Precisely this also predetermined the overall increase and the specific
nature of the growth of all the sectors of industrial production, which produced
goods for the population.
Important tasks in this direction were also set during the lOth Five-Year Plan for
heavy industry. As in the past, it was aimed at the production of ineans of produc-
tion, which are necessary for the stable growth and retooling of all the spheres of
27
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
the national economy and for the strengthening of the defensive capability of the
USSR. At the same time th~ conditians arose, which made it possible, first, to in-
crease substantially the contribution of the enterprises of group A to the develo~-
ment of agriculture, light and the food industries, housing construction, trade and
~ personal services and, second, to expand directly at these enterprises the output of
consumer goods.
Back in the early 1970's 42 percent of the output produced by the defense industry
went for civilian purposes.~l Taking into account the high scientific and techni-
cal level of this sector and the overall potential of heavy industry, the party in-
dicated catego~ically the feasibility and necessity of the attachment of the corre-
sponding plants, institutes and organizations to daily participation in the work on
- increasing the standard of living of the people.
In short, the group of practical problems being solved by heavy industry increased,
its position in the national economy grew even stronger. V. I. Lenin, as is known,
back at the end of the 19th century, in apPraising the function of heavy industry,
emphasized that "in /the final analysis/ /in italics/ the production of ineans of
- production necessarily involves the production of consumer items, for means of pro-
- duction are produced not for the sake of the means of production themselves, but
only on accounti of the facti that more and more mPans of production are required in
the sectors ~f industry which produce consum~r items."72
During the lOth Five-Year Plan more than 200 models of new types of machines, equip-
ment and instruments for light and the food industries were developed on the average
_ in a year at t:~e enterprises of heavy industry. By the end of the 1970's one-fifth
of the automatic lines of USSR industry were in operation in these sectors. Light
and the food industries accounted for nearly half of the completely mechanized and
automated enterprises of the country (in 1965 there were one-sixth as many auch fac-
tories and plants).73 ,
The turn toward the more complete meeting of the needs of the population appeared
more and more distinctly in the scale and rate of development of the sectors pro-
ducing mass demand items. The role of heavy industry in its accomplishment became
especially significant as with its help modern agro-industrial production was also
formed, mechanized poultry factories were built and services were equipped. At the
enterprises of the specialized Ministry af Machine Building alone in 1980 more than
5,000 units of different technological equipment were produced for light and the
fo~d industries and household applicanc~s (at the same time a~aide as~~rtment of
consumer goods was produced here). And as a whole this industry produced during
the last year of the five-year plan technological equipment and spare parts for it
for light and the food industries worth 1.3 billion rubles.74
About 150 machine building plants and a large number of design bureaus and scien-
tific research institutes were engaged in the development and production of equip--
ment, machines and instruments for personal service enterprises. Technically the
sector, which had 270,000 factories, shops and workshops and 2.6 million workers,
gradually became industrial. During 1976-1979 the fixed capital of the republic
ministries of personal services increased by 30 percent, reaching a value of
4.5 billion rubles.75
The 26th CPSU Congress, having rated positively the contribution of the workers of
heavy industry to the production of consumer goods, emphasized the need for the
28
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFFIC[AL USE ONLY
thorough reorientation of the sectors of group A toward the production of machine
tools, machines and equipment for light and the food industries and services. The
lao of the scientific and design base, which is called upon to serve these sectors,
was discussed with much anxiety in the Accountability Report of the Central Commit-
tee. The question of enlisting in this work the USSR Academy of Sciences, as well
as other organizations,including defense organizations, which have large scientific
_ forces, was raised.76
Changes in the structure of the means of production, which were being allocated to
subdivisions I and II of social production, were also necessary for the increase of
the proportion of consumer items in the total volume of industrial output. In prac-
tice during the year.s of the lOth Five-Year Plan the amount of ineans of production,
which were intended for subdivision I itself, increased at a preferential rate, as
a result of which the proportion of subdivision II in the total distribution of the
means and ob~ects of labor decreased (from 28.7 percent in 1975 to 28.3 percent in
1979).~~ Analyzing the data of this sort, M. M. Darbinyan, chief of a department
of USSR Gosplan, noted: "This attests that in the next few years one should hardly
expect any signifj.cant structural changes in the ratio of the output of the sectors
of industrial groups A and B, if serious steps are not taken in this direction."78
An important role was also assigned to heavy industry in the organization of the
output of consumer goods directly at its enterprises. Back during the years of in-
dustrialization heavy industry produced, for example, bicycles for the population.
Starting in the 1950's this sector began to play a prominent role in the production
of refrigerators, washing machines and tape recorders. Now the task of producing
consumer goods was set for all the enterprises of group A(in Belorussia, for ex-
ample, the following standard was established: every enterprise of heavy industry
should have in its total production volume consumer goods in the amount of 1.5-3
percent).79 During the lOth Five-Year Plan the enterprises of the ministries of
instrument making and the chemical industry made an appreciable cantribution to the
solution of this problem. The aviation industry produced about 1,000 descriptions
of different consumer goods worth nearly 1 billion rubles a year. Many metallurgi-
cal plants assimilated the production of kitchen utensils and so on.80 The output
of consumer items also increased (in absolute amounts) in both light and the food
industries; but the rates of this increase were different, which predetermined
the changes in the pattern of production of consumer items (see Table 1).
Tabl.e 1
Pattern of Production of Consumer Items
(percent of total)*
1975 1979
Output ~f light industry . . . . . . . . . . . . . . . . . . . . . . . 27.0 27.5
Output of the food industry . . . . . . . . . . . . . . . . . . . . . 46.8 43.4
Output of tre sectors of heavy industry . . . . . . . . . . . . . . . 26.2 29.1
100.0 100.0
Amour,t of cultural, personal and household goods in group B..... 13.6 15.0
*
The table was compiled according to the data on the gross output in the current
wholesale prices of enterprises (see: "Narodnoye khozyaystvo SSSR v 1979 g." /The
USSR National Economy in 1979/, Moscow, 1980, p 138).
29
FOR OFFIC[AL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
rvrc ~rr~uA~ ua~, u1vLY
If we take only nonfood consumer goods, here the proportion of heavy industry will
increase to more than 50 percent. Its contribution to the output of cultural and
personal goods especially increased: the enterprises of group A accounted for
three-fourths of their total production.81
- Such a turn, the expediency of which was indisputable, did not, however, come easy.
Shortcomings in material and technical supply, economically unsound estimates, the
poor organization of cooperative ties and the lack of the necessary skills inter-
fered. Causes of a psychological nature also hindered the matter, many managers
needed to overcome the previously formed attitude toward the production of consumer
goods as a secondary assignment. Some workers of planning and economic organs con-
tinued to regard group B as a kind of balancer: by reducing the allocations for
its development they attempted to overcome any imbalances in the plan.82 In criti-
cizing such managers, in 1976 L. I. Brezhnev noted that "far from everyone has yet
been able to overcome completely the attitude toward the production of consumer
goods as something secondary, incidental. Not everyone has yet understood that this
is a matter of enormous political and economic importance, which is directly con-
nected with the fulfillment of the program directives of the party."83
During the years of the lOth Five-Year PZan it was possible to a certain extent to
overcome these sentiments. The contribution of a number of sectors of heavy and
the defense industries to the increase of the production of many cultural and per-
sonal goods, including televisions, refrigerators and washing machines, was spe-
cially noted at the October (1980) CPSU Central Committee Plenum.84
In outlining the means of overcoming the various difficulties which are holding back
the production of consumer goods, the CPSU Central Commit~ee has repeatedly indi-
cated that the great reserves of this sector are connected with the use of local
resources and with the initiative of the republics, krays and oblasts and of the
enterprises themselves.85 Unfortunately, all the importance of such a statement
of the question was not realized everywhere and immediately.
During the five-year plan irregularities in the trade in those goods, which it was
possible to produce without particular difficulty in the most different regions of
the country, appeared at times. The simplest medicines, soap, laundry powders,
tooth brushes and tooth paste, needles, thread, children's diapers and others at
times were in short supply. Deputies of the USSR Supreme Soviet and workers of the
People's Control organized the examination of the letters and complaints of work-
ers, which were connected with such inexcusabl~ errors. It showed that it is pos-
sible to produce locally almost all gooda of everyday demand, vigorously involving
in this work local industry, consumer cooperatives, the soviets and their standing
commissions.86
Many shortcomings were corrected in a short time, which once again showed what po-
tential light and the food industries of the country have, how great the reserves
of the efficient use of local raw materials, especially in remote regions, are.
Often the shortage of certain consumer goods or others resulted from shortcomings
in the work of specific works of light industry and the sectors of the infrastruc-
ture, which are associated with them. Thus, during the years of the lOth Five-Year
Plan irregularities were noted in the supply of the popu?ation with cotton fabrics
and items made from cotton yarn (this occurred under the conditions of the constant
30
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
FOR OFFICIAL USE ONLY
increase of the harvest of raw cotton, which increased during 1976-1980 by nearly
25 percent).87 The production of fabrics increased tio a much smaller extent, during
the five-year plan more than 1 billion m2 fail to be produced. The point was that,
as was noted at the December (1977) CPSU Central Co~mnittee Plenum, "there are sev-
eral weak links in the chain, through which this most valuable raw material passes
from the field to the counter of the store."88 The cultivation of fine-fiber
strains of cotton, which are most suitable for fabrics, declined, the quality o�
the raw material decreased due to unfavorable conditions of its storage and proc-
essing. Moreover, a gap formed between the raw material resources and the possi-
bilities of the production of fabrics and items made from cotton yarn, which was
caused first of all by the lag in the placement of capacities into operation in the
cotton industry.89
Under these conditions, in connection with the rapid increase of the demand for con-
sumer items, the timely completion of construction work and the placement of new
- construction projects into operation at full capac3ty acquired especially great im-
portance. In early 1979 a conference, which examined the progress of the start-up
program of the fourth year of the five-year plan, was held in the CPSU Central Com-
mittee.90 During 1979-1980 the Perm' Syrthetic Detergenta Plant, the worsted and
spinning factory in Nevinnomyssk of Stavropol'skiy Kray and the spinning and weav-
ing factory in Andizhan, the carpet combine in Ungeny, the knitwear factories in
Ulan-Ude and Artem, the flax-processing plants in Kalininskaya and Kostromskaya
Oblasts, the Dobrinskiy Sugar Refinery in Lipetskaya Oblasty the meat combines near
Volgograd and Sverdlovsk and in Cheboksary, th~ Kuybyshev, Belgorod, Lutsk, Feodo-
- siya and Tbilisi dairy plants and combines were put into opezation. Thus, as in
previous years, enterprises for the production of consumer go~ds were built in the
most different regions of the country. The specific nature of the sector is such
that it traditionally should be located everywhere, near the main regions of
consumption.
The construction of enterprises which produce consumer items and the changeover of
- indust~y to the mass production of new goods actively promoted the formation of con-
sumer demand. When the construction of a household air conditioner plant was begun
in Baka during the Ninth Five-Year Plan, many people simply did not know about the
existence of such equipment. Meanwhile the quality of the future product at that
time had already become one of the main concerns of the party and economic execu-
tives of the republic and the Ministry of the Electrical Equipment Industry. With
allowance made for the experience of the Volga Motor Vehicle Plant they began in
advar.ce to train workers and speciali4ta. Probation work was done at enterprises
in Moscow and Leningrad, Gor'kiy and Tol'~atti, Vilnius and other cities, which
were related in specialization. Moreover, 135 workers, engineers and technicians
familiarized themselves with the work of Japanese enterprises.
In 1976 56,000 artificial climate appliances had already come off the main conveyor.
The Baku workers developed in the large cities of the country a network of firm
warranty repair shops. During the lOth Five-Year Plan the production of air con-
ditioners, which were commended with the Seal of Quality, came ta more than 1 mil-
lion. The plant became the largest enterprise of the kind in Europe and Asia.91
Much attention was devoted during those yeara to the achievement of a balance of
supply and demand, the gradual rationalization of consumption and the meeting of
the increased needs of the population. The increase of the production of passenger
cars, spare parts for them and so forth should be noted first of a11.92 This was
31
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFRICIAL USE ONLY
connected with the further expansion of the Volga Motor Vehicle Plant, the increase
of the outp~;t of passenger cars in Moscow, Gor'kiy, Izhevsk and Zaporozh'ye and the
appearance of special models designed for rural areas. ~
The production of goods which had become traditional also increased greatly. Where-
as in 1970 only half of all the families in the country had televisions, by the end
of the lOth Five-Year Plan more than 80 percent of the families watched television
broadcasts. At that time the supply with refrigerators was the same (in the early
1970's only one family in three had them). There were many more washing machinea
and radios. Approximately 1 family in 12 had a passenger car, 1 in 10 had a motor-
cycle and a motor scooter and 1 in 2 had a bicycle. It is noteworthy that the satu-
ration with these goods increased especially rapidly in the countryside. As a re-
sult the level of supply of u.rban and rural inhabitants with cultural and personal
goods grew appreciably closer, while the countryside surpassed the city in the pro-
vision of families with sewing machines, bicycles and motorcycles.93
If we look at how Soviet families broke down their budget, it would become clear
that the proportion of expenditures on food decreased, while the proportion of the
expenditures on the purchase of fabrics, clothing, footwear, furniture and cultural
and personal items itzcreased. The period when the inhabitants of the city and the
countryside were purchasing industrial goods for the first time has already passed. .
To use the expression of sociologists, the time of "secondary," "tertiary" demand
and so on had arrived.
Thus, step by step industry completed the turn to the more complete meeting of the
needs of the workers. True, it was not possible to implement everything that was
planned. One of the main difficulties was rooted in the still inadequate supply of
agriculture with modern equipment and highly skilled personnel. The situation was
aggravated by the severe consequences of the years of poor crops, from which several
sections of the food and light industries first of all suffered. Nevertheless the
lOth Five-Year Plan maintained the continuity (with respect to the Ninth Five-Year
Plan) in the overall increase of mass demand goods; the output of products of
gruup B increased by 40 billion rubles.94
In concluding the examination of the subjects which show the main directions of the
industrial development of the country during the years of the lOth Five-Year Plan,
let us note some characteristic traits af this process. At the end of the ~Oth
Five-Year Plan the growth rates of group A and group B drew closer together: in
1979 both subdivisions provided the same increase. In all during 1976-19$0 the pro-
duction of ineans of production in industry increased by 26 perc.ent, the production
of consumer items increased by 21 percent.95
Practical experience showed the inadequacy of these growth rates, and it was not
only a matter of the fact thaC they did not conform to the planned indi~ators. The
xatio of groups A and B in industry itself did not meet the needs nf the develop-
ment of the national economy and the increased demand of the population for high
quality mass demand goods. This question was covered extensively both during the
precongress discussion of the Main Directions of USSR Economic and Social Develop-
ment and directly in the speeches of the delegates of the 26th CPSU Congress. It
also found a direct reflection in the documents of the congress. "...In the draft
qf the Main Directions for the next five-year plan," L. I. Brezhnev noted at the
congress, "some acceleration of the rate of development of group B has been incor-
porated--it will slightly exceed the growth rate of group A. This is good. The
32
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
FOR OFFICIAL USE ONLY
task is to develop the truly modern production of consumer goods and services for
the population, which meets the needs of the people."96
The question of the ratio of the growth rates of industrial fixed capital, labor
productivity and the volume uf output being produced is also of great importance
with respect to the problem in question. The statistical materials, which have been
brought together, reveal the following picture (see Table 2).
Table 2
Growth Rates of Industrial Fixed Capital, Labor Productivity and the Volume
of Industrial Output by Sectors for the Period of 1975-1979*
Industrial fixed Labor pro- Production
capital ductivity volume
Industry as a whole. . . . . . . . . . . 134 114 120
Electric power engineering 126 111 121
Fuel industry . . . . . . . . . . . . . . 135 107 lI4
Ferrous metallurgy . . . . . . . . . . . 126 108 110
_ Chemical and petrochemical industry. 142 118 125
rfachine building and metalworking. 143 129 140
Timber, wood processing and pulp and
paper industry . . . . . . . . . . . . . 128 10'/ 106
Construction materials industry. 129 105 109
Light industry . . . . . . . . . . . . . 128 112 114
Food industry . . . . . . . . . . . . . . 124 104 107
*1975= 100 percent. Calculated according to "Narodnoye khozyaystvo SSSR v 1979 g.,"
pp 141, 148, 154.
First of all the achievements of the works, which are grouped with machine building,
metalworking, the chemical and pztrochemical industry, which with respect to all the
indicators led not only the other leading sectors, but also industry as a whole,
attract attention. And this completely reflected their leading role in the assur-
ance of scientific and technical progress, which, in turn, was also connected with
the determination of the priorities in the policy of capital investments. Consid-
erable assets were allocated for practically all sectors, but the return was not in
all cases proportionate to the investments. The data on the growth rate of produced
_ output and its correlation with the increase of fixed capital are evidence of this.
In addition to the named sectors electric power engineering was in the most favor-
_ able position. As to the fuel base, here, as we know, the great expenditures were
connected with the advance to the east and with the development of hard to reach
regions. The nonfulfillment of the plan by the coal industry workers also affected
the overall indicators.
The comparison of the first and third columns of the table confirms the thesis of the
continuin~ decline of the output-capital ratio, which our economists have already re-
peatedly indicated.97 Suffice it to say that the increase of fixed capital in in-
dustry by nearly 1.5-fold exceeded the increase of the total volume of output. In
light industry this gap was twofold, in the food industry--more than threefold, in
the timber, wood processing and pulp and paper industry--more than fourfold. The
situation in ferrous metallurgy was also very difficult.
33
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
� V~� V~ ~ ~~.?AL~ VULi V{\I~l
'rhe data on labor productivity once again show that with the exception of the lead-
ing sectors (machine builders and chemical industry workers) all the other detach-
- ments were greatly inferior to the all-union achievements with respect to these in-
dicators. Here we once again have to note the considerable discrepancies between
the expenditures on the increase of the technical equipment of personnel and the
return which took the form of the increase of labor productivity. On the scale of
_ all industry labor productivity increased during the five-year plan by 17 percent
instead of the planned 30-34 percent. Three-fourths of the increase of the output
of industry (90 percent was planned) was obtained by means of the increase of labor
productivity.98
In summing up the lOth Five-Year Plan as a whole, while giving full credit to the
truly historic accomplishments of the Soviet people, the 26th CPSU Congress indi-
cated the identified difficulties, shortcomings, unsolved problems, bottlenecks and
~'isproportions. "The reasons here are diverse," L. I. Brezhnev said in the Account-
ability Report of the Central Committee to the congress. "Among them are the effect
of objective factors which are independent ~f our will, the omissions in planning
and management, the inadequate demandingnes~ of a number of party organs and eco-
nomic managers, violations of discipline, displays of poor management. But, per-
- haps, the most important cause consiste in the fact that the force of inertia, the
traditions and habi.ts, which formed during the period when not so much the quali-
tative as the quantitative aspect of the matter came to the forefront, have not yet
been completely overcome."99
When specifying the ways and means of eliminating the identified obstacles and out-
lining the plans for the 1980's, the party attached decisive importance to the ex-
perience which had already been gained and which had brought the country to the turn
of the llth Five-Year Plan. The analysis of the past planning and reporting period
enabled the 26th CPSU Congress to express a high opinion of the contribution of the
workers of industry to the development of the economy and the increase of the well-
being of the people. The great absolute increases of production, the increase of
~ the output of modern equipment and the achie~ements of the fuel and power complex
were especially commended. More than 1,200 large industrial enterprises had been
put into operation. Industry developed more rapidly than all the secto~s of the
national economy. The outpul00f products as compared with the Ninth Five-Year Plan
had increased by 24 percent.
The achieved gains for their most part predetermined the possibilities of the fur-
ther stable development of USSR industry and the enhancement of its role in the de-
velopment of the Soviet economy. During the years of the llth Five-Year Plan (just
as during the past period) industry with respect to the growth rate will lead the
other sectors of the national economy; moreover, the rate of increase of i~s output,
as well as labor productivity should be greater than during 1976-1980; it is planned
to obtain 9U percent of the increase by means of the increase of labor productiv-
ity. I'or the first time in the history of the Soviet five-year plans it was de-
cided to increase the national income more rapidly than the capital investments.
Al1 this taken together attests that the poliey of increas~ng production efficiency
~ not only is being continued, but is also being intensified substantially. The poten-
tial built up in the sphere of industrial production during the years of the lOth
- Five-Year Plan will make it possible during the 1980's to take a new step in the
creation of the material and technical base of communism.
31~
FOR OFFI~CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R040400080008-1
FOR OFFtCIAL USE ONLY
FOOTNOTES
1. "Materialy XXVI s"yezda I~PSS" /Materials of the 26th CPSU Congress/, riosco~?,
1981, p 139.
2. Calculated according to "Narodnoye kh~zyaystvo SSSR v 1978 g." /The USSR Na-
tional Economy in 1978/, Moscow, 1979, p 386; "Narodnoye khozyaystvo SSSR v
1979 g." /The USSR National Economy in 1979/, Moscow, 1980, pp 312, 386, 387.
3. "Materialy XXV s"yezda KPSS" /Materials of the 25th CPSU Congress/, Moscow,
1976, pp 126-127.
4. D. Zhimerin, "Comprehensive Programs of Scientific and Technical Progress,"
POLITICHESKOYE SAMOOBR.AZOVANIYE, No 2, 1978, p 42.
5. V. K. Novikov, "For a New Upsurge of Domestic Machine Building," n~MMUNIST,
No 3, 1979, p 23.
6. "Spravochnik partiynogo rabotnika" /Handbook of the Party Worker/, issue 19,
Moscaw, 1979, pp 232-236.
7. PRAVDA, 26 March 1980.
8. "Narodnoye khozyaystvo SSSR v 1979 g.," pp 112.-114; PRAVDA, 24 January 1981.
9. D. Zhimerin, Op. cit., p 44.
- 10. PRAVDA, 8 February 1981.
11. PRAVDA, 27 February 1981.
12. "Narodnoye khozyaystvo SSSR v 1979 g.," p 114.
13. PRAVDA, 12 May 1980.
14. VOPROSY EKONOMIKI, No 2, 1979, pp 36, 93.
15. S. A. Kheynmsn, "Nauchno-tekhnicheskaya revolyutsiya segodnya i zavtra" /The
Scientific and Technical Revolution Today and Tomorrow~; Moscow; 1977, p 302.
16. "Materialy XXV s"yezda KPSS," p 189.
17. Ye. Popov, "Robots Are Assistants in Human Affairs," KOMMUNIST, No 15, 1979,
p 81.
- 18. "Stroki, rozhdennyye poiskom. Ekonomicheslciye obozreniYa 'Pravdy /Ll.nes
Given Birth to by Research. Economic Reviews of PRAVDA/, Moscow, 1980,
PP 83-84.
19. EKONOMICHESKAYA GAZETA, No 11, 1981, p 24.
20. PRAVDA, 9 August 1980.
35
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2047/02/09: CIA-RDP82-00850R000404080008-1
rux ~rr~~,1AL uDC. V1VLY
21. V. Kirichenko, "The Proportionality of Economic Growth and Efficiency," KOMMU-
NIST, No 18, 1980, pp 33-34.
22. See V. A. Yezhov, A. Z. Bakser, I. P. Trufanov, "Rabochiy klass SSSR v gody
_ devyatoy pyatiletki" /The USSR Working Class During the Years of the Ninth
Five-Year P1an/, Leningrad, 1978, pp 54-56.
23. Calculated according to "Narodnoye khozyaystvo SSSR v 1979 g.," pp 147, 387.
24. "Trudovyye resursy SSSR" /USSR Manpower Resources/, Moscow, 1979, p 12. ~
25. See L. I. Brezhnev, "Ob osnovnykh voprosakh ekonomicheskoy politike KPSS na
sovremennom etape" /On the Main Questions of CPSU Economic Policy at the Pres-
ent Stage/, Vol 2, Moscow, 1979, p 536.
26. "Stroki, rozhdennyye poiskom. Ekonomicheskiye obozreniya 'Pravdy'," pp 85-87.
27. PRAVDA, 28 February 1g81.
28. "KPSS v rezolyutsiyakh i resheniyakh s"yezdov, konferentsiy i Plenumov TsK"
/The CPSU in Resolutions and Decisions of Congresses, Conferences and Plena
of the Central Committee/, Vol 13, Moacow, 1981, p 162; I. M. Volkov, "USSR
Agriculture During the Years of the lOth Five-Year Plan," ISTORIYA SSSR, No 4,
_ 1981.
29. "Materialy XXV s"yezda KPSS," p 140. �
30. "Narodnoye khozyaystvo SSSR v 1979 g.," pp 170-171. ~
31. "Istoriya sotsialisticheskoy ekonomiki SSSR" /The History of the Socialist
Economy of the USSR/, Vol 7, Moscow, 1980, pp 259-261.
32. "Materialy XXV s"yezda KPSS," pp 140, 176-177; "Zasedaniya Verkhovnogo Soveta
SSSR devy2*_ogo sozyva. Pyataya sessiya. Stenograficheskiy otchet'.' /The Meet-
ings of the USSR Supreme Soviet of the Ninth Convocation. Fifth Session. Ver-
batim Report/, Moscow, 1976, pp 18-19.
33. "Zasedaniya Verkhovnogo Soveta SSSR devyatogo sozyva. Desyataya sessiya. Ste-
nograficheskiy otchet" /The Meetings of the USSR Supreme Soviet of the Ninth
Convocation. Tenth Session. Verbatim Report7, Moscow, 1978, p 69.
34. "~Iaterialy XXVI s"yezda KPSS," p 114.
35. L. I. Brezhnev, "Ob osnovnykh voprosakh ekonomicheskoy politike KPSS na sovre-
mennom etape. Rechi i doklady," Vol 2, p 452.
3h. "The Main Problems of the Comprehensive Development of Western Siberia,"
VOPROSY FILOSOFII, No 1, 1979, p 31.
37. "Materialy XXVI s"yezda KPSS," pp 50, 125; PRAVDA, 27 February 1981.
38. PRAVDA, 15 April 1980, 27 May 1980.
36
FOR OFFiCIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00854R000440080008-1
FOR OFFICIAL USE ONLY
39. PRAVDA, 27 May 1980, 27 February 1981.
40. A. Khaytun, "Socioeconomic Problem~ of the Development of the Petroleum and
Gas Regions of the Country," PLANOVOYE KHOZYAYSTVO, No 9, 1979, p 89; PRAVDA,
27 February 1981.
41. L. I. Brezhnev, "Ob osnovnykh voprosakh ekonomicheskoy politike KPSS na sovre-
mennom etape," Vol 2, p 452.
42. PRAVDA, 5 June 1978.
43. PLANOVOYE KHOZYAYSTVO, No 9, 1977, pp 90-91.
44. PRAVDA, 27 April 1980, 24 and 27 February 1981.
45. PRAVDA, 27 February 1981; EKONOMICHESKAYA GAZETA, No 28, 1980, p 2.
46. EKONOMICHESKAYA GAZETA, No 28, 1980, p 3; PRAVDA, 26 February 1981.
47. PRAVDA, 2 March 1981.
48. EKONOMICHESKAYA GAZETA, No 15, 1981, p 2; PRAVDA, 27 February 1981.
49. "KPSS v rezolyutsiyakh i resheniyakh s"yezdov, konferentsiy i Plenumov TsK,"
Vol 12, Moscow, 1978, pp 75-78.
S0. EKONOMICHESKAYA GAZETA, No 28, 1980, p 3; PRAVDA, 1 September 1980, 26 Febru-
ary 1981.
51. B. Isayev, "The Ekibastuz Fuel and Power Complex," PARTIYNAYA ZHIZN', No 2,
1981, pp 35-39.
52. PRAVDA, 22 March 1979.
53. "Narodnoye khozyaystvo SSSR v 1979 g.," p 171.
5!+. EKONOr1ICHESKAYA GAZETA, No 12, 1981, p 2.
- 55- EKON~MI(:HESKAYA GAZETA~ No 33, 19$~, p 1.
56. PRAVDA, 25 May 1980; IZVESTIYA, 18 June 1980.
57. "Materialy XXVI s"yezda KPSS," p 33.
58. A. P. Aleksandrov, "Atomnaya energetika i nauchno-tekhnicheskiy~rogress"
/Atomic Power Engineering and Scientific and Technical Progress/, Moscow,
1978, p 195.
59. Yu. V. Sivintsev, "I. V. Kurchatov i yadernaya energetika" /I. V. Kurchatov
and Nuclear Power Engineerin~/, Moscow, 1980, p 73.
37
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1
60. With an average production cost of electric power in the USSR of 0.8 kopeck
per kWh the Novovoronezhskaya AES generates it at a cost of 0.6 kopeck; ibid.
61. "Zasedaniya Verkhovnago Soveta SSSR devyatogo sozyva. Desyataya sessiya,"
p 21; PRAVDA, 13 March 1980, 9 April 1980.
62. EKONOMICHESKAYA GAZETA, l~0 12, 1981, pp 1-2
63. PRAVDA, 14 August 1980.
64. T. Guzhenko, "Maritime Transport of the Soviet State," KOMMUNIST, No 17, 1978,
pp 69-70; PRAVDA, 25 February 1981.
- 65. "Zasedaniya Verkhovnogo Soveta SSSR devyatogo sozyva. Desyataya sessiya,"
p 69; PRAVDA, 28 February 1981,
66. PRAVDA, 26 February 1981.
67. See "Materialy XXV s"yezda KPSS," p 39.
68. "Narodnoye khozyaystvo SSSR v 1979 g.," p 394; PRAVDA, 24 January 1981.
- 69. "Narodnoye khozyaystvo SSSR v 1979 g.," p 435; PRAVDA, 24 January 1981.
70. Calculated according to "Narodnoye khozyaystvo SSSR v 1979 g.," pp 366-367.
71. "Materialy XXIV s"yezda KPSS" /Materials of the 24th CPSU Congress/, Moscow,
1971, p 46.
72. V. I. Lenin, "Poln. sobr. soch." /Complete Work~/, Vol 4, pp 160-161.
73. "Narodnoye khozyaystvo SSSR v 1979 g.," pp 112-113, 115, 116. .
74. PRAVDA, 24 January 1981.
75. IZVESTIYA, 16 January 1981.
76. "Materialy XXVI s"yezda KPSS," pp 43-44.
77. "Narodnoye khozyaystvo SSSR v 1979 g.," p 137.
78. VOPROSY EKONOMIKI, No 2, 1981, p 53. .
79. IZVESTIYA, 18 July 1979.
80. PLANOVOYE KHOZYAYSTVO, No 3, 1977, p 105; PRAVDA, 7 February 1979; IZVESTIYA, '
_ 15 February 1980.
81. PRAVDA, 7 February 1979, 24 February 1981.
82. L. I. Brezhnev, "Ob osnovnykh voprosakh ekonomicheskoy politike KPSS na sovre-
mennom etape. Rechi i doklady," Vol 2, p 536.
' ~8
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400084008-1
FUR OFFICIAL USE ONLY
83. Ibid., p 323.
84. KOMMUNIST, No 16, 1980, p 7.
85. "KPSS v rezolyutsiyakh...," Vol 12, Moscow, 1978, p 386.
86. KOMMUNIST, No 17, 1979, p 15.
87. "Narodnoye khozyaystvo SSSR v 1975 g." /The USSR National Economy in 1975/,
Moscow, 1976, p 367; PRAVDA, 24 January 1981.
88. L. I. Brezhnev, "Ob osnovnykh voprosakh ekonomicheskoy politike KPSS na sovre-
mennom etape," Vol 2, p 450. ~
89. M. M. Darbinyan, "Means of Meeting the Needs of the Population," VOPROSY EKO-
NOMIKI, No 2, 1981, p 50.
90. IZVESTIYA, 2 June 1979.
91, V. Arkhipenko, "The Lessons and Experience of One Construction Pro~ect," KOM-
MUNIST, No 2, 1976, pp 57-58; IZVESTIYA, 15 March 1980.
92. V. Mayyer, "The Well-Being of the People and Consumer Demand," VOPROSY EKONO-
MIKI, No 2, 1981, pp 58-59; 0. Sayenko, "Needs and the Plan," EKONOMICHESKAYA
GAZETA, No 39, 1980, p 15.
93. "Narodnoye khozyaystvo SSSR v 1979 g.," pp 433-434.
94. KOMMUNIST, No 16, 1980, p 7.
95. "N,aterialy XXVI s"yezda KPSS," p 103.
96. Ibid., p 49.
97. T. S. Khachaturov, "SovetskaYa ekonomika na so~vremennom et2pe" /The Soviet
Economy at the Present Stage/, Moscow, 1975, p 222; "Effektivnost' proizvod-
stva i kachestvo raboty (voprosy teorii i praktiki)" /Production Efficiency and
Work Quality (Questions of Theory and Practice)/, Moscow, 1978, pp 134-135;
"Istoriya sotsialisticheskoy ekonomiki SSSR," Vol 7, p 190.
98. "Materialy XXV s"yezda KPSS," pp 167, 175; "Materialy XXVI s"yezda KPSS,"
pp 108, 133.
99. "Mat~rialy XXV s"yezda KPSS," pp 36-37.
100. "Materialy XXVI s"yezda KPSS," pp 100, 103.
COPYRIGHT: Izdatel'stvo "Nauka", "Istoriya SSSR", 1981
- 7807
CSO: 1820/17 END
39
FOR OFFICIAL USE 4NLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400080008-1