USSR: ECONOMIC PROJECTIONS, 1982-90

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83T00853R000100120002-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 50
• Document Creation Date: December 20, 2016
• Document Release Date: February 26, 2007
• Sequence Number: 2
• Publication Date: September 1, 1982
• Content Type: REPORT

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Directorate of Confidential
Intelligence
USSR:
Economic Projections,
1982-90
Confidential
SOV 82-10127
September 1982
465
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Directorate of
Intelligence Confidential
USSR:
Economic Projections,
1982-90
A Research Paper
This paper was prepared byl the Econometric Analysis Division, Ottice of Soviet
Analysis. Comments and queries are welcome and
may be addressed to the Chief, Econometric Analysis
Division, SOVA
Confidential
SOV 82-10127
September 1982
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Preface The 1980s promise to be a difficult period for the Soviet economy.
Demographic factors are certain to keep labor force growth at very low lev-
els. We believe that partial depletion of the raw material base in the
developed European regions will increasingly force expensive new invest-
ments in remote areas of Siberia, while improvements in labor productivity
will be hindered by a slowdown in the growth of capital investment. Hard
currency trade, which is heavily dependent on earnings from energy
exports, is likely to experience slower growth during the decade and, as a
consequence, will not offer a solution to the industrial materials and
investment problems that are already emerging. Superimposed on these
trends is the sharpening competition between the civilian and military
sectors of the economy for claims on resources.
25X1
This paper offers a preliminary quantitative picture of the growth prospects
for the Soviet economy in the 1980s to serve as a basis for discussion and
analysis. In this sense, the projections shown provide a reference point or
baseline case. Hence, the paper should be viewed as a point of departure
and should not be construed as a formal "best estimate" of the outlook for
the Soviet economy. 25X1
More specifically, the results of ongoing research on selected topics may re-
sult in changes in our baseline assumptions concerning the economic
environment (for example, the future of Soviet oil production, the outlook
for earnings of hard currency from exports, likely future divergency from
past trends in total factor productivity in selected industrial sectors). In
addition, the estimate of growth presented in this report depends in part on
a number of key judgments about Soviet policy decisions. In the coming
months, new information may clarify policy decisions already taken (for
example, raw materials-including energy-export policy toward the East
European client states) or may reveal new policy decisions (for example,'
investment policy toward agriculture following the fourth consecutive poor
harvest). A forthcoming major study-scheduled for the fourth quarter of
calendar year 1982-on Soviet economic prospects and the impact of these
prospects on Soviet military and foreign policy will consider these and
other factors. For the present, we have chosen-on the basis of current
information and research findings-initial baseline assumptions to repre-
sent what we think will be the most likely developments in the 1980s. These
are delineated on page 1.F__ I 25X1
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SOV 82-10127
September 1982
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The projections shown in this paper were developed using a large-scale
econometric model and reflect the current best judgments of analysts
following Soviet economic trends and policies.' The results are organized
into two sections: one gives a graphical summary, and the other presents
the detailed annual estimates in tabular form.2 Given the nature of the
assumptions postulated in this paper, we have much more confidence in the
general trends of the projections than in estimates for particular years. The
annual figures, however, can be used to illustrate where the economy might
be in a given year in the absence of major changes in political and
economic conditions. 25X1
To illustrate the impact of alternative assumptions concerning the econom-
ic environment or policy decisions on the baseline results, we have included
results for three hypothetical shifts in the assumptions underlying the
baseline solution. 25X1
2 Throughout this report, components may not add to the totals shown because of roun ing.
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USSR:
Economic Projections
1982-90
Overview Our preliminary projections show that Soviet economic growth will
Information available continue to decline in the 1980s as average annual rates of increase of labor
as oil August 1982 and capital decline and productivity gains fall short of lans. We expect av-
was used in this report. p
0
erage annual GNP growth to fall below 2 percent per year in thujM80s.
Our projections depend on a number of baseline assumptions. The results
of ongoing research on selected topics may result in changes in the
assumptions that concern the economic environment, and, in the coming
months, new information is likely to clarify Soviet policy decisions that
affect other assumptions. In brief, the results shown in this report are
tentative. 25X1
Slower growth of production will mean slower expansion in the availability
of goods and services to be divided among competing claimants-resources
for future growth (investment), the consumer, and defense. If Soviet
defense spending in the 1980s increases at around 4.5 percent per year, as
assumed in our projections, consumption and investment will expand at
record low rates for the postwar period. Under this scenario, the defense
burden would increase to over 15 percent of GNP in 1985 and to 17
percent in 1990. 25X1
Our projections indicate that new fixed investment in the 1980s will
expand at about one-third the annual rate of the 1970s, due not only to
slower growth in production of machinery and new construction starts but
also to the rising share of durable goods going to the military. Moreover,
the greatly expanding share of investment going to the energy sectors just
to keep up low growth in energy output will depress the expansion of
investment in nonenergy sectors. 25X1
Substitution of gas for oil will continue, and production of nuclear power
will increase. Nonetheless, according to our preliminary assessment of
energy production, these trends will not be sufficient to meet increased
energy requirements. In particular, given our assumption regarding the
decline of oil production, an oil gap emerges. The gap represents 10 to 20
percent of oil requirements in the second half of the decade but only about
5 percent of total energy requirements. A prospective shortage this large
would raise yet another problem for Soviet planners and accounts for part
of the projected slowdown in economic growth. Our projections, however,
suggest that even without an energy gap Soviet economic growth would
slow markedly. 25X1
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We assume that part of the gap between growth of energy production and
growth of requirements probably will be covered by a reduction in net
exports of energy, from 4.3 million barrels per day oil equivalent (b/doe) in
1980 to about 3 million b/doe in 1990. With the emerging tightness in the
Soviet oil balance, we assume that oil exports will fall by roughly 2 million
barrels per day (b/d) by 1990. This will be partially offset by an increase in
gas exports of 1 million b/doe.
Moscow could take steps to avoid an oil bottleneck, such as by investing
even more in energy production and conservation. Though this could
reduce and perhaps eliminate the gap, it would mean less investment and
subsequent production in other sectors of the economy. Thus, the ultimo
effect on economic growth would be similar to that of an oil shortage.
In our projections real hard currency export earnings decline by about 10
percent between 1981 and 1990. The Soviets could afford more imports
than these earnings would permit by increased borrowing from the West.
Credits at the average level of recent years, combined with additional
borrowings for the Yamal pipeline, would permit Moscow to maintain
roughly stable real imports over the next few years. But in the second half
of the 1980s new credits would be exceeded by the debt service obligations
on previous borrowing. As a result, in the absence of even higher amounts
of borrowing, real imports from the West would be determined largely by
export earnings after mid-decade. 25X1
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Possible Range in Soviet Growth Outlook 18
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USSR:
Ero'ections,
1982-90 Economic
Key Baseline The projections presented in this report reflect a number of key assump-
Assumptions tions about future trends in the Soviet economic environment. We have
chosen these to represent what we think will be the most likely develop-
ments in the 1980s. (The sensitivity of the projections to alternative
assumptions is examined on pages 18 through 20.) The baseline assump-
tions include the following:
? Growth in the productivity of Soviet plant and equipment, which has
fallen substantially since 1975, will continue to drop.
? The labor force will grow more slowly in the eighties than it did in the
seventies-at an average annual rate of 0.7 percent compared with 1.5
percent.
? Soviet defense spending in the 1980s will increase at an average rate of
about 4.5 percent per year, with growth somewhat higher than average in
the first half of the decade.
? The allocation of investment and labor among producing sectors reflects
an extrapolation of trends based on data presented in the Soviet Five-
Year Plan for 1981-85. Agriculture's share of investment is largely kept
fixed, with the share for the energy sectors increasing substantially by
1985 at the expense of the rest of the economy.
? Oil production will begin a slow decline in the next few years, eventually
reaching 10 million barrels per day in 1990, compared to the current
production level of 12.2 million b/d. At the same time, gas production
will continue to increase rapidly, more than offsetting the drop in oil.
? The energy efficiency of newly installed plant and equipment will
continue to improve at 2.5 percent per year.' When the assumed energy
efficiency gains of new plant and equipment are coupled with our
projections of capital stock, we are able to calculate total energy
requirements.
? With continued growth of domestic energy requirements, Moscow will
face a conflict between maintaining oil exports and meeting domestic
needs. We assume a middle course is followed, with reduced exports and
unmet domestic requirements absorbing roughly equal parts of the
shortfall.
? There will be no major shift in political or economic policy that will have
a significant impact on economic performance. 2X1
' By energy efficiency we mean the units of energy needed per unit of plant and equipment
to support its use in the production of goods and services. 2 X1
1 Confidential
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Results in Brief Sources of GNP
Our projections indicate that Soviet economic growth will continue to
decline in the 1980s as the average annual rates of increase of labor and
capital decline and productivity increases fall short of plans.l 2F'X1
Substitution of gas for oil will continue, and production of.nuclear power
will increase. Nonetheless, according to our projections, these trends will
not be sufficient for the Soviet economy to avoid a serious shortage of oil in
the second half of the decade.` The oil gap will represent 10 to 20 percent
of oil requirements, but less than 5 percent of total energy requirements.
This emerging shortfall will raise yet another problem for Soviet planners,
although even without this bottleneck Soviet economic growth would
continue to decline. 25X1
Prospects for industry, which contributes roughly 35 percent of the
national product, are dismal compared to its performance in the 1970s.
Besides facing the economy-wide problems of slower growth of labor, plant
and equipment, and other inputs, industry also must cope with a rapid
depletion of raw materials production capacity in traditional areas. This
means that more and more investment resources are needed just to
maintain production levels as new raw material deposits are developed in
the high cost areas of Siberia. 25X1
Agriculture is still the most unstable sector of the Soviet economy, with
performance in any year highly dependent on weather conditions. Because
weather conditions in the years ahead cannot be predicted, future crop
yields are estimated on the basis of historical trends.' Thus, the growth
estimate for farm output for 1981-85 (3 percent) is deceptively high since it
primarily reflects a return to trend-line crop yields in 1985 compared to the
below-trend yields of 1980 that resulted from poor weather. 25
Our calculations result in an ex ante oil shortage in the Soviet economy. Ex post, such
shortages are rarely observable because of adjustments taken in the economy over time. The
adjustments the Soviets could take include increased investment for energy conservation
and energy production or less than full utilization of production capacity. Our projections
assume the main Soviet adjustment would be through the latter course of action.
' Our projection of 1985 grain production is 215 million tons. A more complex method,
which explicitly accounts for weather, arrives at the same estimate for 1985, assuming
"average climate." See Russell A. Ambroziak and David W. Carey, "Climate and Grain
Production in the Soviet Union," forthcoming in the Joint Economic Committee compendi-
um, Soviet Economy in the 1980s: Problems and Prospects. 25X1
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Figure 1
Average Annual Growth
Percent
76-80 6
6
86-90 4
4
Production Shares
Percent
OOtherb
a Excludes intra-agricultural use of farm products but is
not adjusted for purchases by agriculture from other
sectors.
b"Other" includes construction, transportation and
communications, and trade and services.
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Uses of GNP
Slower growth of production means slower expansion in the availability of
goods and services to be divided among competing claimants-resources
for future growth (investment), the consumer, and defense.
:256A
If Soviet defense spending in the 1980s increases at around 4.5 percent per
year, consumption and investment will expand at record low rates of
increase for the postwar period.
The immediate impact of slower expansion of investment is fairly small.
Nevertheless, the rate of increase in production capacity is reduced because
growth in the stock of plant and equipment will eventually follow growth in
the flow of investment goods. 25X1
Despite the emphasis in the 1981-85 Plan on increasing the supply of
consumer goods and services, the arithmetic implies negligible improve-
ments in average living standards, especially in the second half of the
decade. This will have an adverse effect on labor productivity, as continued
increases in money wages, taken together with large holdings of personal
savings, create a reservoir of purchasing power that greatly exceeds the
amount of goods and services available for wage earners to buy. 25X
Assuming continued expansion of defense spending, we calculate that the
defense burden will increase to over 15 percent in 1985 and 17 percent in
1990.1 25X1
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Figure 2
Average Annual Growth
Percent
Per Capita Consumption
Legend 4
]1971-75 3
76-80 z 1 I
81-85 1
0 86-90 0
End-Use Shares
Percent
aTotal investment consists of repairs to the capital
stock, net additions to livestock herds, and new fixed
investment for expansion of Soviet production capacity.
b"Other" includes expenditures for government
administration, civilian R&D, net exports, and inventory
change.
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Key Resources
The Soviet economy has followed an "extensive" rather than "intensive"
growth path. Growth of the economy has been largely driven by a rapid ex-
pansion of the labor force and the stock of plant and equipment rather
than, as in the West, by productivity increases. 25X1
The increase in the labor force in the 1980s will be less than half of what it
was in the 1970s. The labor force-up by nearly 20 million during 1971-
80-is expected to increase by roughly 9.5 million in 1981-90.
Our projections indicate that new fixed investment in the 1980s will
increase at about one-third the rate of the 1970s due not only to the slower
growth in production of machinery and new construction starts but also to
the rising share of durable goods going to the military. (The investment es-
timate for 1981-85 is consistent with the Soviet plan for investment in this
time frame.) 25X1
The impact of the reduced expansion of investment on GNP growth will be
compounded by the increasing demand for investment goods by the energy
sectors. The greatly increasing share of investment going to these sectors
just to sustain low growth in energy output will depress the expansion of
investment in the nonenergy sectors. 25X1
Finally, in the second half of the 1980s, according to our results, a
significant oil deficit will develop in the domestic economy (1 to 2 million
b/d out of total oil requirements of 10 to 11 million b/d). This will
negatively affect expansion of the active capital stock-probably through
the combination of earlier-than-planned retirement of the most inefficient
oil-using equipment and lower rates of capital utilization. 25K1
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aDoes not include housing. The estimates for 1981-85
and 1986-90 reflect adjustments for reduced utilization
because of a projected oil deficit.
b "Other" includes construction, transportation and
communications, and trade and services. The changes in
shares between 1980 and 1985 reflect the Soviet 11th
Five-Year Plan.
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Labor Productivity
The key to Soviet labor productivity improvement has been increases in
capital per worker. Without more success in realizing technological
innovations, improvements in organization, and other sources of productiv-
ity increases, additional increases in capital per worker will have less and
less effect on productivity. r -1 25X1
Moreover, since about 1975 the effect of extra capital on output has
diminished more than in earlier years. The reasons for this include raw
material shortages, greater costs associated with the shift in the locations
of raw material supplies from the depleted traditional area to Siberia, and
worsening worker morale. 25X1
We have no indication that the Soviets will be able to draw on alternative
sources of productivity gains. On the contrary, the influence of those
factors that led to the shift in the effect of extra capital on output in the
late 1970s will probably intensify in the future so that the low labor
productivity growth estimates shown here are conservative.
25 1
The small increase for industry from 1981-85 to 1986-90 is not significant
given the margin of error in the projections. The main point of these figures
is that labor productivity growth in the industrial sector over the 1980s is
projected to be about one-half of the rate of increase achieved during the
10th Five-Year Plan period (1976-80). 25X1
Productivity gains in the energy sectors become negligible in the face of in-
creasing depletion of oilfields and coal mines in the western region of the
USSR. Greater numbers of workers and large infusions of capital are
needed just to maintain the low growth of energy production.
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Figure 4
Labor Productivity
Average Annual Growth (Percent)
Legend Total Economy
1971-75
0 76-80 7
81-85
86-90 6
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Energy Balance Trends
We estimate that in the 1980s Soviet primary energy production growth
will slow to about 1.2 percent per year on the average compared to 4.5 per-
cent in the 1970s and 5.7 percent in the 1960s. The main cause of this slow-
down is the assumed fall in oil production after 1985. Gas production will
continue to increase rapidly, while coal production will be practically
stagnant.
At the same time, our projections indicate that requirements for primary
energy, which depend in large part on the size of the capital stock and its
composition, will rise at 2.5 percent per year in the 1980s.1 25 1
We assume part of the gap between growth of energy production and
growth of requirements will be covered by reduced net exports of energy,
from 4.3 million b/doe in 1980 to about 3 million b/doe in 1990. With the
emerging severe tightness in the Soviet oil balance, we estimate oil exports
will fall by around 2 million b/d by 1990. This will be partially offset by an
increase in gas exports of about 1 million b/doe. F7 I 25X1
Although a policy of reducing oil exports will help make more energy
available for domestic needs, our calculations show it will not be sufficient
to avoid a significant oil shortage of 1 to 2 million b/d in the second half of
the 1980s. This shortage will arise even with substantial substitution of gas
for oil, as shown in the consumption charts. Further substitution that could
eliminate the oil deficit will be limited by gas production.
25
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Oil Balance Trends
Current oil production of 12.2 million b/d accounts for about 40 percent of
total primary energy production. Three-fourths of this oil is used domesti-
cally and one-fourth is exported. Roughly two-thirds of the exported oil
goes to the Council for Mutual Economic Assistance (CEMA) countries
and one-third to the West. 25X1
Although the future of Soviet oil production is uncertain, increasing
depletion rates, rising fluid lift requirements, constraints on drilling of new
wells, and lagging infrastructure development in West Siberia suggest that
it will start to decline in the next few years. We use a working assumption
that production will fall to 11.5 million b/d in 1985 and 10 million b/d in
1990.1 25X1
Hard currency oil exports have fallen over the last few years, from 1.1 mil-
lion b/d in 1978 to around 0.9 million b/d in 1981. We expect further cut-
backs in this trade, as production stabilizes and domestic requirements
increase. Because of likely high demand for hard currency imports and
lack of other exportable goods, we assume these exports will decline
gradually to 0.3 million b/d by 1990 rather than cease as implied by the
trends in production and domestic needs. 25X1
Similarly, the Soviets recently announced a reduction of 100,000 barrels
per day in oil exports at subsidized prices to the GDR, Czechoslovakia, and
Hungary effective this year. Further reductions in deliveries to CEMA are
also likely, especially after 1985 when the drop in Soviet oil production
becomes severe. Exports to CEMA probably will be allowed to fall to
1 million b/d by 1990. Any further reduction could risk economic collapse,
especially of the weaker economies in this group. 25X1
Despite a leveling off in domestic oil needs and a substantial reduction in
exports, we project a significant oil deficit of around 1 to 2 million b/d will
develop in the second half of the decade. This probably will lead to selected
retirement of the most inefficient oil-using equipment and also reduced
utilization of other plant and equipment, with lower GNP in both cases.
Moscow could take steps to avoid an oil bottleneck, such as investing
further in energy production and conservation. Though this could reduce
and perhaps eliminate the gap, it would mean less investment and
subsequent production in other sectors of the economy. Thus, the ultimate
effect on economic growth would be similar to that of an oil shortage.
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Figure 6
Oil Balance Trends
Million Barrels per Day
Hard Currency
Communist
Countries
Requirements
Deficit
5Consumption
qV,
586870 6-82
13
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Gas Balance Trends
The USSR has the world's largest gas reserves in northern Siberia.
Construction of six pipelines from this area to the central USSR during the
11th Five-Year Plan period will result in continued rapid growth of gas
production through 1985. Because gas is cheaper to extract and transport
than Siberian oil or coal, further substantial increases in gas production are
projected for 1986-90 on the basis of likely Soviet construction of increased
pipeline capacity and storage facilities. r -1 25X1
We estimate most of the production increments in the 1980s will be used to
meet greater domestic energy needs. 25X1
The Yamal export pipeline will permit a doubling in gas deliveries to
Western Europe when it comes into full operation in mid-decade. This
project will give the Soviet Union an important source of hard currency, es-
pecially in view of lost earning capacity from reduced oil exports.
25X
With stable and probably eventually lower Soviet oil exports to Eastern
Europe, increased gas deliveries are consistent with Soviet intentions to
increase overall energy exports to this region.
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Figure 7
Gas Balance Trends
Million Barrels per Day,
Oil Equivalent
Levels
0.5
0 1975 1980
Hard Currency
1 Communist
Countries
J ii I
1985 1990
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Hard Currency Trade
Improving terms of trade in the 1970s-particularly the rise in oil and gold
prices-allowed the USSR to expand rapidly imports from the West
without comparable increases in its volume of exports. The Soviets cannot
count on improved trade terms in the 1980s. We assume that oil and gold
prices do not increase in real terms from the current levels. The real gas
price is allowed to increase somewhat according to a Soviet agreement with
Ruhrgas on the price of future gas deliveries. Thus future import levels will
depend mostly on trends in export volume. 25X1
In constant dollars, the estimated increase in gas exports through the 1980s
will offset only about two-thirds of the expected drop in oil sales. Increased
gold sales will help narrow the loss. However, other commodity exports are
estimated to stay constant at best in real terms. Opportunities for expand-
ing exports of other commodities will be limited by their low marketability
in world trade and continuing tightness in domestic supplies. Under these
conditions, real export earnings (the earnings in the chart at right
discounted for inflation) decline by about 10 percent between 1981 and
1990.1 25X1
The Soviets could afford more imports by increasing borrowing from the
West. The trend in new borrowing is difficult to project because it will re-
flect policy decisions both by Moscow and Western governments and
banks. Given the present low debt burden of the USSR, a reasonable
projection of future nonpipeline borrowing appears to be a flat level of 4.5
billion dollars per year--roughly equal to average credits per year in the
second half of the 1970s, with about an extra $2 billion annually in 1982-
85 for the gas export pipeline. 25X1
These levels of borrowing from the West can permit Moscow to maintain
roughly stable real imports over the next few years. But toward the second
half of the 1980s borrowings would be exceeded by the debt service
obligations on previous drawings of credit. As a result, in the absence of
even higher amounts of borrowing, real imports (the imports in the chart at
right discounted for inflation) would be determined largely by export
earnings after mid-decade. Compared to the level in 1981, real imports by
1990 would fall by around 10 percent, a decline equal to that in export
earnings. Soviet debt would increase in the next few years and then fall to
about its current level by 1990.1 25X1
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Figure 8
Hard Currency Trade
Billion Current Dollars
Earningsa
Importsb
-10 1981 85 90
a Includes merchandise exports, gold sales, arms sales,
and net earnings on invisibles.
bIncludes upward adjustment for unrecorded
expenditures such as aid to Poland and intra-CEMA trade.
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Possible Range The estimate of Soviet growth prospects presented above depends in part
in Soviet Growth on a number of key judgments about the future Soviet economic environ-
Outlook ment and policy decisions. Although we have attempted to make the best
judgments possible, various degrees of uncertainty surround them. The
results shown in figure 9 suggest the possible impacts of some of those un-
certainties on the estimates. 25X1
Flat Oil Production
This case assumes that Soviet oil output stabilizes at 12 million b/d
through 1990 instead of falling as in the baseline assumptions. With this
greater supply, our calculated oil deficit becomes much smaller and
effective capital growth is therefore greater. Although this leads to an
increase in GNP growth of around three-tenths of a percentage point, it
clearly is not sufficient to bring about a turnaround in the long-run decline
in the rate of economic progress. The difference in consumption per capita
would be barely perceptible.
Zero Defense Growth
The baseline projections suggest a significant increase in the defense
burden by 1990 because the estimated growth of defense spending is about
twice estimated GNP growth. One option available to a new Soviet
leadership is a cutback in the expansion of defense spending. This case
examines the implications for the economy of a constant level of defense
spending from 1982 to 1990. Stable defense procurement of investment
goods-largely weapons--allows some increased expansion of production
capacity. The impacts on GNP growth are fairly small, around one-tenth
of a percentage point, because of the low productivity of extra investment
resources.' Impacts on per capita consumption growth of one-half to 1
percentage point are considerably greater because of stable rather than
increasing demands of defense on the final bill of goods available from the
economy. 25X1
Level Oil Exports
Our baseline estimate of Soviet growth prospects assumes that when oil
production starts to decline some of the resulting deficit is met by reducing
oil exports both to the CEMA countries and to the West. This policy would
raise the costs of economic progress for Eastern Europe and also weaken
6 This impact on GNP growth assumes the extra investment resources from reduced growth
of defense spending have the productivity typical in the overall economy. It is possible t26X1
sume these resources h which would increase the
impact on GNP growth
25J
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Figure 9
Impact of Alternate Assumptions on Baseline Estimates
The levels are the baseline estimates and the bars indicate the incremental changes.
Legend
Flat Oil Production
Zero Defense Growth
? Level Oil Exports
Note change in scales
GNP Growth
Percenta
0.1 0.1 Negl.
2.1 - 1.4
0.3
l- i 0.1 -0.2
-1111111
GNP
Billion 1970 Rubles
1985 1990 12
1 2
Capital Growthb Per Capita Consumption Growth
Percenta Percenta
0.5
3.8 0.3 0.1
3.3
0.5
0.1 0.1
0.8 -0.1
Energy Production Domestic Energy Use
Million Barrels per Day Oil Equivalent Million Barrels per Day Oil Equivalent
1985 1990 2.0 1985 1990
0.5 0.3 0.2 0.7 0.2 0.5 0.3
30.5 32.2 26.3 0.1
28.9-
Net Oil Exports Hard Currency Import Capacity
Million Barrels per Day Billion 1981 Dollars
1985 1990 1.4 1985 1990
5.8
2.5 0 0 0.1 0 0 0 0 2.0
1.2 26.3 24.9 0 0
aAnnual average.
bDoes not include housing. Estimates include
adjustment for energy availability.
19 Confidential
 Approved For Release 2007/02/28: CIA-RDP83T00853R000100120002-1
the economic linkage between these countries and the Soviet Union. At the
same time, reduced oil sales to the West would lead to a drop in the volume
of total imports over the rest of the decade. Moscow could conclude that
the costs of this policy are too high compared to the benefit of extra
domestic output. Our estimates suggest that if instead the Soviets maintain
oil exports at their present level this would (1) lower GNP by about 1
percent by 1990, but (2) permit imports from the West to roughly keep
pace with economic growth, and (3) also permit increased imports from
Eastern Europe. From the Soviet view a key factor in evaluating this trade-
off would involve the composition of the goods, with the trade-off being
more favorable if the increased imports were made up of critical goods not
easily produced in the Soviet economy while the lost domestic output
consisted of nonessential goods. 25X1
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Confidential
Detailed Results
The following tables contain the projection results obtained with our
macroeconomic model of the Soviet economy under the baseline assump-
tions. The tables include model estimates for 1981 as well as the years be-
yond to 1990. Since model estimates almost always result in at least small
errors, the 1981 numbers should not be used as if they were actual results.
25X1
2. New Fixed Investment: Percent Distribution 24
5. Annual Growth of GNP (Factor Cost) 27
6. Average Annual Growth Of GNP (Factor Cost) by Five- 28
Year Plan Period
8. Capital Productivity Growth 30
9. Uses of GNP (Factor Cost) 31
10. Percent Distribution Of GNP Uses (Factor Cost) .32
11. Average Annual Growth of GNP Uses (Factor Cost) by 32
Five-Year Plan Period
18. Agriculture: Selected Key Variables 39
21 Confidential
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Confidential
Table 1
Selected Key Assumptions a
Population (million persons)
267.9
270.1
272.4
274.6
276.8
278.8
280.7
282.7
284.6
286.6
Total defense (billion rubles)
74.4
78.3
82.4
86.0
89.9
93.2
96.8
100.6
104.5
108.5
Machinery procurement
(billion rubles)
25.6
27.4
29.3
30.8
32.4
33.6
35.0
36.4
37.9
39.4
Manpower (million
persons)
5.9
5.9
5.9
5.9
5.9
5.9
5.9
5.9
5.9
5.9
Oil production (million b/d)
12.2
12.2
12.0
11.7
11.5
11.2
10.9
10.6
10.3
10.0
Hard currency oil exports
(million b/d)
0.9
0.8
0.8
0.7
0.6
0.5
0.5
0.4
0.3
0.3
Oil exports to Communist
countries (million b/d)
2.0
1.9
1.9
1.9
1.9
1.7
1.5
1.3
1.1
0.9
Gas production (billion cm)
465.0
495.0
525.0
555.0
585.0
608.0
631.0
654.0
677.0
700.0
Hard currency gas exports
(billion cm)
28.8
25.7
25.7
30.7
42.1
53.9
55.9
56.3
56.7
56.7
Gas exports to Communist
countries (billion cm)
33.0
34.0
37.0
41.0
45.0
50.0
54.0
54.0
54.0
54.0
Coal production (million ml)
716.8
717.6
718.4
719.2
720.0
731.0
742.0
753.0
764.0
775.0
Nonenergy hard currency
exports (billion US $)
8.7
9.1
9.7
10.4
11.1
11.9
12.7
13.6
14.5
15.5
Gold sales (billion US $)
2.7
3.4
3.6
3.8
4.1
4.6
5.2
5.8
6.4
7.2
Sales volume (tons)
200.0
300.0
300.0
300.0
300.0
315.0
330.0
345.0
360.0
375.0
Gold price (US $)
420.0
350.0
371.0
397.0
425.0
455.0
486.0
520.0
557.0
595.0
Arms sales (billion US $)
5.0
5.2
5.6
6.0
6.4
6.8
7.3
7.8
8.4
8.9
Grain production (million mt)
160.0
165.0
208.7
212.1
215.5
218.8
222.2
225.6
229.0
232.3
a This table shows the assumed values for the key input variables in
SOVSIM. Along with the equations in the model, these variables are
the basis for the estimates presented in later tables.
 Approved For Release 2007/02/28: CIA-RDP83TOO853ROO0100120002-1
Table 2
New Fixed Investment: Percent Distribution a
36.2
37.8
40.1
43.0
9.4
9.5
9.5
9.6
1.7
1.9
2.2
2.6
1.7
1.9
2.2
2.6
3.2
3.7
4.3
5.1.
100.0
100.0
100.0
100.0
100.0
100.0
46.3
46.3
46.3
46.3
46.3
46.3
9.7
9.7
9.7
9.7
9.7
9.7
8.9
8.9
8.9
8.9
8.9
8.9
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
6.0
6.0
6.0
6.0
6.0
6.0
8.7
8.7
8.7
8.7
8.7
8.7
Transportation and
12.3
12.1
11.7
11.3
10.8
10.8
10.8
10.8
10.8
10.8
communications
Trade and services
14.4
13.4
12.1
10.5
8.6
8.6
8.6
8.6
8.6
8.6
Housing
13.2
13.1
12.9
12.7
12.5
12.5
12.5
12.5
12.5
12.5
a This table shows the investment distribution assumed for the
baseline case. Changes in this distribution through 1985 reflect
Soviet intentions as expressed in the 11th Five-Year Plan. The
distribution from 1985 onward is kept fixed.
 Table 3
Employment a
Able-bodied population
156,568.0
157,307.0
157,822.0
158,248.0
158,621.0
158,906.0
159,274.0
159,853.0
160,490.0
161,106.0
Participation rate (percent)
84.8
85.0
85.3
85.5
85.6
85.7
85.7
85.6
85.6
85.5
Military manpower
5,850.0
5,870.0
5,870.0
5,890.0
5,900.0
5,890.0
5,880.0
5,900.0
5,900.0
5,900.0
Civilian labor force
141,903.0
143,345.0
144,651.0
145,782.0
146,747.0
147,576.0
148,327.0
149,050.0
149,834.0
150,655.0
Total employment
137,544.0
138,798.0
139,925.0
140,891.0
141,700.0
142,385.0
142,996.0
143,581.0
144,223.0
144,900.0
Industry
37,615.3
38,196.7
38,746.1
39,251.5
39,717.8
40,176.5
40,608.3
41,032.2
41,475.7
41,931.8
Industrial materials
9,431.7
9,610.8
9,777.8
9,929.0
10,066.4
10,182.6
10,292.1
10,399.5
10,511.9
10,627.5
Oil
317.0
322.0
327.5
333.4
339.6
343.5
347.2
350.8
354.6
358.5
Gas
33.2
35.0
36.9
38.8
41.0
41.4
41.9
42.3
42.8
43.2
Coal
1,223.3
1,244.5
1,267.5
1,291.8
1,317.6
1,332.8
1,347.1
1,361.2
1,375.9
1,391.1
Electric power
777.0
794.0
812.5
832.0
852.8
862.7
872.0
881.1
890.6
900.4
Machine building and
metalworking
15,575.1
15,866.8
16,138.9
16,385.4
16,609.3
16,801.1
16,981.7
17,158.9
17,344.4
17,535.1
Chemicals
1,906.2
1,932.4
1,956.8
1,979.0
1,998.9
2,022.0
2,043.8
2,065.1
2,087.4
2,110.4
Consumer goods
8,351.8
8,391.2
8,428.2
8,462.0
8,492.2
8,590.3
8,682.6
8,773.3
8,868.1
8,965.6
Construction
11,447.0
11,588.2
11,707.9
11,802.9
11,874.8
12,012.0
12,141.0
12,267.8
12,400.4
12,536.7
Agriculture
34,642.1
34,051.6
33,464.7
32,883.9
32,297.0
31,717.5
31,139.9
30,557.2
29,977.5
29,397.8
Transportation and
communications
12,249.0
12,499.8
12,725.7
12,921.3
13,089.8
13,240.9
13,383.2
13,522.9
13,669.1
13,819.4
Trade and services
41,037.4
41,787.3
42,413.5
42,899.4
43,255.9
43,755.6
44,225.8
44,687.4
45,170.5
45,667.2
a The civilian labor force is somewhat greater than participants from
the able-bodied population less military manpower because the
civilian labor force also includes significant numbers of workers past
retirement age who are not counted in the able-bodied population.
Changes in the distribution of workers among sectors is tied to
changes in investment through a linking methodology. The sum of
employment over sectors is a little less than the figure for total
employment because our data base carries a small number of
workers in a residual category.
 Approved For Release 2007/02/28: CIA-RDP83TOO853ROO0100120002-1
Table 4
Sources of GNP (Factor Cost) a
GNP
529.7
544.6
563.1
576.3
583.3
591.0
599.3
608.2
617.3
626.7
Total industry
196.5
202.1
206.6
210.8
214.5
218.4
222.7
227.3
232.1
236.9
Industrial materials
46.5
47.8
48.9
49.9
50.8
51.6
52.5
53.4
54.4
55.4
Oil
9.4
9.4
9.2
9.0
8.8
8.6
8.4
8.2
7.9
7.7
Gas
2.9
3.1
3.3
3.5
3.7
3.8
3.9
4.1
4.2
4.4
Coal
6.1
6.1
6.1
6.2
6.2
6.3
6.4
6.5
6.6
6.7
Electric power
14.9
15.4
15.8
16.2
16.6
17.2
17.8
18.5
19.2
19.9
Machine building and
metalworking
74.4
77.5
79.9
82.1
84.1
86.0
88.1
90.3
92.6
94.9
Chemicals
14.5
14.8
15.1
15.4
15.6
15.9
16.2
16.5
16.8
17.1
Consumer goods
27.7
28.0
28.3
28.5
28.7
29.0
29.4
29.9
30.3
30.8
Construction
42.0
42.8
43.3
43.6
43.7
44.0
44.3
44.8
45.3
45.8
Agriculture
67.2
71.0
80.5
86.1
86.9
87.6
88.3
89.0
89.7
90.3
Transportation and
communications
62.0
63.7
65.0
66.0
66.7
67.5
68.5
69.6
70.9
72.2
Trade and services
151.1
153.9
156.7
158.8
160.4
162.4
164.3
166.2
168.2
170.2
Military personnel
9.5
9.5
9.5
9.5
9.6
9.5
9.5
9.6
9.6
9.6
Residual
1.4
1.5
1.5
1.6
1.6
1.6
1.6
1.7
1.7
1.7
a This table presents the key SOVSIM production estimates.
Because weather conditions cannot be predicted, agricultural
production for 1983 and following years reflects crop yields
estimated on the basis of trend lines. The measure of agriculture is
adjusted for both intra-agricultural use of farm products and
purchases by agriculture from other sectors.
Confidential 26
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Confidential
Table 5
Annual Growth of GNP (Factor Cost) a
GNP
1.5
2.8
3.4
2.3
1.2
1.3
1.4
1.5
1.5
1.5
Total industry
2.0
2.9
2.2
2.0
1.8
1.8
2.0
2.1
2.1
2.1
Industrial materials
1.0
2.8
2.3
2.0
1.8
1.7
1.7
1.8
1.8
1.8
Oil
1.7
0.0
-1.9
-1.9
-2.0
-2.6
-2.7
-2.8
-2.8
-2.9
Gas
6.9
6.5
6.1
5.7
5.4
3.9
3.8
3.6
3.5
3.4
Coal
0.3
0.3
0.3
0.3
0.3
1.7
1.7
1.7
1.6
1.4
Electric power
2.4
3.3
2.7
2.6
2.6
3.5
3.5
3.7
3.9
3.9
Machine building and
metalworking
2.4
4.2
3.1
2.8
2.4
2.2
2.4
2.6
2.5
2.5
3.4
1.9
2.1
1.8
1.6
1.7
1.8
1.9
1.9
1.9
1.9
1.1
0.9
0.8
0.6
1.3
1.4
1.5
1.6
1.6
1.7
2.1
1.1
0.6
0.2
0.7
0.9
1.0
1.1
1.1
Agriculture
-5.7
5.5
13.5
6.9
0.9
0.9
0.8
0.8
0.7
0.7
Transportation and
communications
3.6
2.7
2.0
1.6
1.1
1.1
1.5
1.7
1.8
1.8
a This table expresses the production estimates contained in table 4
in terms of annual growth rates. The model behind these estimates
was constructed primarily to make medium- to long-term projec-
tions. Therefore its estimates for the short term, while very near the
trend, are not generally as accurate as those available from alternate
methods. Furthermore, annual growth rates are highly sensitive to
small shifts in annual production increases or decreases. Conse-
quently, the growth rates shown here should be understood as
suggesting trends and not as estimates for individual years. The very
high growth in 1983 for agriculture reflects an assumed return to
trend crop yields from depressed yields in 1982. Although very high,
such growth is not unprecedented for this unstable sector.
 Approved For Release 2007/02/28: CIA-RDP83T00853R000100120002-1
Table 6
Average Annual Growth of GNP (Factor Cost)
by Five-Year Plan Period a
1966-70
1971-75
1976-80
1981-85
1986-90
GNP
5.2
3.7
2.7
2.1
1.4
Total industry
6.3
5.9
3.5
2.0
2.0
Industrial materials
5.0
4.4
1.5
1.9
1.7
Coal
1.6
2.3
-0.1
0.5
1.6
Electric power
7.9
7.0
4.5
2.7
3.7
Machine building and
metalworking
6.9
7.9
5.3
2.8
2.4
5.8
3.5
Transportation and communications
6.9
6.6
3.6
2.0
1.6
Trade and services
4.9
3.7
2.9
1.7
1.2
a This table translates the production estimates of table 4 into
average annual growth rates for 1981-85 and 1986-90. Although
these growth rates are more representative of trends than individual
annual growth rates are, they are very sensitive to the base years.
Thus the growth rate for GNP in 1981-85 will somewhat overstate
the trend because poor weather in 1980 affected agriculture
adversely, resulting in a below-trend GNP for that year.
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 Approved For Release 2007/02/28: CIA-RDP83T00853R000100120002-1
Confidential
Table 7
Labor Productivity Growth a
Gas
Coal
Electric power
Machine building and metalworking
Transportation and communications
Trade and services
2.3
8.5
10.7
0.8
2.5
3.0
4.5
-1.8
-1.2
0.5
4.6
5.3
2.3
0.5
2.6
2.9
4.9
3.2
1.2
1.3
4.4
3.6
1.4
0.2
0.5
0.6
0.4
0.5
-0.4
0.1
a Labor productivity is defined as the ratio of output (value-added in
rubles, factor cost, 1970 prices) to employment. The growth
estimates shown here for the 1980s are derived from the results
presented in tables 3 and 4.
 Approved For Release 2007/02/28: CIA-RDP83T00853R000100120002-1
Table 8
Capital Productivity Growth a
Electric power
-2.3
-0.2
-1.4
-2.9
-2.4
Machine building and metalworking
-2.7
-1.9
-3.8
-2.5
-1.7
Chemicals
-2.9
-0.9
-5.0
-2.8
-2.1
Consumer goods
-1.4
-3.9
-4.1
-2.3
-1.5
Construction
-6.2
-3.8
-6.5
-3.4
0.1
Agriculture
-2.9
--10.8
-6.8
0.8
-1.8
Transportation and communications
-0.2
-1.2
-3.1
-2.7
-1.9
Trade and services
-3.6
-4.1
-3.8
-2.3
-1.0
a Our measure of capital productivity is the ratio of output (value-
added in rubles, factor cost, 1970 prices) to capital stock in place
(rubles, 1973 prices). The growth estimates shown here for the 1980s
are derived from the output results in table 3 and our projections of
capital stock. Historically, capital productivity in the Soviet econo-
my has been falling. The rate of fall was especially high during the
10th Five-Year Plan period (1976-80). The estimates for 1981-85
show similar decreases. The rate of fall generally is slower in the
second half of the 1980s because of a reduction in the effect of
diminishing returns (as capital grows more slowly compared to labor
growth than in the earlier period).
 Approved For Release 2007/02/28: CIA-RDP83TOO853ROO0100120002-1
Confidential
Table 9
Uses of GNP (Factor Cost) a
GNP
529.7
544.6
563.1
576.3
583.3
591.0
599.3
608.2
617.3
Consumption
278.1
287.0
295.1
302.9
305.5
307.4
309.3
311.2
313.2
Investment
160.9
163.0
166.5
168.0
168.6
170.0
172.0
174.1
176.4
New fixed investment
128.8
130.2
133.2
134.3
134.7
135.8
137.2
138.9
140.6
Defense
74.4
78.3
82.4
86.0
89.9
93.2
96.8
100.6
104.5
Government administration
13.0
13.3
13.6
13.8
13.9
14.0
14.1
14.1
14.2
Government research and
development
4.8
5.1
5.4
5.6
5.8
6.0
6.2
6.5
6.7
a SOVSIM estimates consumption as the residual end-use after
subtracting investment and defense and other government expendi-
tures from GNP. Investment is estimated as the residual in an
investment goods balance which takes into account production of
investment goods and such claims on this production as consumer
durable goods and military procurement of machinery (including
weapons). Because of data constraints, SOVSIM must work with
two measures of new fixed investment: (1) a factor cost measure that
fits in with SOVA's reconstruction of Soviet GNP and (2) the official
Soviet measure, which is used in tracing investment flows to
producing sectors and housing. This table presents estimates of the
factor cost measure. Defense is an assumed variable, while the
estimates for government administration and research and develop-
ment are based on assumed shares of GNP. The uses of GNP shown
do not sum to the total shown because there is a small residual that
includes net exports and inventory change.
627.7
315.3
178.6
142.3
108.5
14.4
7.0
 Approved For Release 2007/02/28: CIA-RDP83T00853R000100120002-1
Table 10
Percent Distribution of GNP Uses (Factor Cost) a
GNP
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Consumption
52.5
52.7
52.4
52.6
52.4
52.0
51.6
51.2
50.7
50.3
Investment
30.4
29.9
29.6
29.1
28.9
28.8
28.7
28.6
28.6
28.5
New fixed investment
24.3
23.9
23.7
23.3
23.1
23.0
22.9
22.8
22.8
22.7
Defense
14.1
14.4
14.6
14.9
15.4
15.8
16.2
16.5
16.9
17.3
Government administration
2.5
2.4
2.4
2.4
2.4
2.4
2.3
2.3
2.3
2.3
Government research and
development
0.9
0.9
1.0
1.0
1.0
1.0
1.0
1.1
1.1
1.1
a The uses shown do not sum to 100 percent because there is a small
residual category that includes net exports and inventory change.
Table 11
Average Annual Growth of GNP Uses (Factor Cost)
by Five-Year Plan Period
Consumption
5.3
3.5
2.6
1.7
0.6
Per capita consumption
4.3
2.6
1.8
0.8
-0.1
Defense
4.3
4.0
3.6
4.9
3.8
Government administration and
research and development
8.2
3.3
0.8
5.0
1.6
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Table 12
New Fixed Investment a
Total
136.8
139.8
142.0
143.9
144.9
146.5
148.5
150.7
153.0
155.3
Industry
49.5
52.8
56.9
61.9
67.1
67.8
68.8
69.8
70.9
71.9
Industrial materials
12.9
13.2
13.5
13.8
14.0
14.2
14.3
14.6
14.8
15.0
Oil
6.6
7.7
9.1
10.9
12.9
13.1
13.3
13.5
13.7
13.9
Gas
2.3
2.6
3.1
3.7
4.4
4.4
4.5
4.6
4.6
4.7
Electric power
4.4
5.1
6.1
7.3
8.6
8.7
8.9
9.0
9.1
9.3
Machine building and
metalworking
11.7
12.0
12.2
12.5
12.6
12.8
13.0
13.2
13.4
13.6
Chemicals
4.7
4.8
4.9
5.0
5.1
5.1
5.2
5.3
5.4
5.4
Consumer goods
4.6
4.8
4.9
4.9
5.0
5.1
5.1
5.2
5.3
5.4
Construction
5.3
5.1
4.7
4.2
3.6
3.6
3.7
3.7
3.8
3.8
Agriculture
27.5
27.9
28.1
28.2
28.0
28.3
28.7
29.2
29.6
30.0
Transportation and
communications
16.8
16.9
16.6
16.3
15.7
15.8
16.0
16.3
16.5
16.8
Trade and services
19.7
18.8
17.2
15.0
12.4
12.5
12.7
12.9
13.1
13.3
Housing
18.1
18.3
18.4
18.3
18.1
18.3
18.6
18.8
19.1
19.4
a The estimates of total new fixed investment in this table are for the
official Soviet concept of such investment. The estimated flows of
investment goods to producing sectors and housing depend directly
on this total and the allocation pattern assumed in table 2.
 Table 13
Energy Balance a
Million barrels per day,
oil equivalent
Production
28.7
29.4
29.8
30.2
30.5
30.8
31.2
31.5
31.8
32.2
Oil
12.2
12.2
12.0
11.7
11.5
11.2
10.9
10.6
10.3
10.0
Gas
7.7
8.2
8.7
9.2
9.7
10.0
10.4
10.8
11.2
11.6
Coal
6.7
6.7
6.7
6.6
6.6
6.7
6.7
6.8
6.8
6.9
Peat
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.3
0.3
0.3
Hydroelectric power
0.9
1.0
1.1
1.1
1.2
1.2
1.2
1.3
1.3
1.3
Nuclear energy
0.4
0.6
0.7
0.8
0.9
1.0
1.1
1.3
1.4
1.6
Other
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
Oil
9.1
9.3
9.2
9.1
9.0
9.0
8.9
8.9
8.9
8.8
Gas
6.7
7.1
7.6
7.9
8.2
8.3
8.6
8.9
9.3
9.7
Coal and peat
6.7
6.7
6.6
6.6
6.6
6.7
6.8
6.8
6.9
7.0
Other
1.9
2.1
2.3
2.4
2.6
2.7
2.9
3.1
3.3
3.5
Net exports
4.3
4.1
4.1
4.1
4.2
4.2
4.0
3.8
3.5
3.2
Gas
1.0
1.0
1.1
1.2
1.5
1.8
1.9
1.9
1.9
1.9
Coal
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
a The production and net exports estimates reflect analysts'
judgments. Therefore, the balancing item in these calculations is
consumption.
I
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Production 12.2
Consumption 9.1
0.8
5.9
1.0
Machine building and 0.4
metalworking
Chemicals 0.5
Consumer goods 0.3
Construction 0.7
Agriculture 0.9
Transportation and 0.8
communications
Trade and services 0.0
Net exports 3.1
Hard currency net exports 0.9
Net exports to Communist 2.0
countries
12.2
12.0
11.7
11.5
11.2
10.9
10.6
10.3
10.0
9.3
9.2
9.1
9.0
9.0
8.9
8.9
8.9
8.8
0.8
0.8
0.8
0.8
0.9
0.9
0.9
0.8
0.8
6.1
6.1
6.0
6.0
6.1
6.2
6.2
6.2
6.3
1.0
1.1
1.2
1.3
1.4
1.5
1.5
1.5
1.6
0.4
0.4
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.4
0.4
0.3
0.3
0.3
0.3
0.3
0.2
0.2
0.2
0.2
0.7
0.7
0.6
0.6
0.5
0.5
0.5
0.4
0.4
0.9
0.8
0.8
0.8
0.8
0.7
0.7
0.7
0.7
0.8
0.8
0.7
0.7
0.6
0.6
0.6
0.6
0.6
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.9
2.8
2.6
2.5
2.2
2.0
1.7
1.4
1.2
0.8
0.8
0.7
0.6
0.5
0.5
0.4
0.3
0.3
1.9
1.9
1.9
1.9
1.7
1.5
1.3
1.1
0.9
a Oil consumption starts to fall below oil requirements around 1983,
with a resulting negative effect on GNP.
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Table 15
Gas Balance a
Million barrels per day
oil equivalent
Production
7.7
8.2
8.7
9.2
9.7
10.0
10.4
10.8
11.2
11.6
Consumption
6.7
7.1
7.6
7.9
8.2
8.3
8.6
8.9
9.3
9.7
Final demand
1.0
1.0
1.1
1.1
1.2
1.1
1.2
1.2
1.2
1.3
Industry
5.4
5.7
6.1
6.4
6.6
6.7
7.0
7.3
7.6
8.0
Industrial materials
1.6
1.8
1.9
2.0
2.1
2.1
2.2
2.3
2.4
2.5
Oil
0.3
0.4
0.4
0.4
0.5
0.5
0.5
0.6
0.6
0.7
Gas
0.1
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.3
Electric power
1.7
1.7
1.8
1.8
1.8
1.9
2.0
2.1
2.2
2.3
Machine building and
metalworking
0.5
0.6
0.6
0.7
0.7
0.7
0.7
0.7
0.8
0.8
Consumer goods
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.3
Construction
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
Transportation and
communications
0.2
0.2
0.2
0.3
0.3
0.3
0.3
0.3
0.3
0.3
Net exports
1.0
1.0
1.1
1.2
1.5
1.8
1.9
1.9
1.9
1.9
Hard currency net exports
0.5
0.4
0.4
0.5
0.7
0.9
0.9
0.9
0.9
0.9
Net exports to Communist
countries
0.5
0.6
0.6
0.7
0.7
0.8
0.9
0.9
0.9
0.9
a The Yamal gas pipeline is assumed to come into operation in 1986.
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Confndentia
Million barrels per day
oil equivalent
uction 6.9 6.9 6.9 6.8 6.8 6.9 7.0 7.0 7.1 7.2
,umption 6.7 6.7 6.6 6.6 6.6 6.7 6.8 6.8 6.9 7.0
Final demand 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7
Industry 5.4 5.4 5.4 5.4 5.4 5.5 5.6 5.7 5.8 5.8
Chemicals
Consumer goods
Construction
Agriculture
Transportation and
communications
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1
0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Trade and services 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Net expor8 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Hard currency net 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
exports
Net exports to Commu- 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
nist countries
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Production
Consumption
Final demand
Industry
Industrial materials
Oil
Chemicals
Consumer goods
Construction
Agriculture
Transportation and
communications
Net exports to Communist
countries
1,325.0
1,368.3
1,405.6
1,442.8
1,480.0
1,531.8
1,585.4
1,644.0
1,708.0
1,775.0
1,308.6
1,348.5
1,382.4
1,416.2
1,450.0
1,498.8
1,549.4
1,605.0
1,666.0
1,730.0
162.0
165.5
168.1
170.6
173.1
177.2
181.6
186.8
192.7
199.0
927.4
957.7
984.8
1,01.3.2
1,042.9
1,084.3
1,126.6
1,172.4
1,222.0
1,273.7
383.2
398.2
411.2
424.2
437.2
454.5
472.7
492.5
514.2
537.0
48.7
51.6
54.8
58.8
63.6
69.5
75.2
81.0
86.9
92.8
164.2
170.1
174.9
179.5
184.0
190.0
196.2
203.0
210.4
218.0
55.3
56.3
56.9
57.5
58.2
59.4
60.7
62.1
63.8
65.6
51.4
53.2
54.2
54.5
54.0
53.8
53.7
53.8
54.2
54.7
60.3
61.3
61.8
62.3
62.8
63.8
64.9
66.2
67.7
69.4
79.9
82.5
84.5
86.3
87.8
90.1
92.5
95.2
98.2
101.3
16.4
19.8
23.2
26.6
30.0
33.0
36.0
39.0
42.0
45.0
16.4
19.8
23.2
26.6
30.0
33.0
36.0
39.0
42.0
45.0
a Conversion and distribution losses are spread across domestic users
for purposes of our calculations.
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Table 18
Agriculture: Selected Key Variables a
Grain production (million mt)
160.0
165.0
208.7
212.1
215.5
218.8
222.2
225.6
229.0
232.3
Grain imports (million mt)
40.7
48.0
44.0
33.4
34.4
35.5
36.5
37.5
38.6
39.7
Grain feed (million mtfeed
units)
120.3
113.3
126.6
139.9
144.1
148.3
152.5
156.7
161.0
165.3
Nongrain feed (million mt
feed units)
273.0
269.9
277.7
288.0
289.9
291.9
293.8
295.7
297.7
299.6
Total feed (million mt
feed units)
393.3
382.2
404.3
427.9
434.0
440.1
446.3
452.5
458.7
465.0
Grain feed share (percent)
30.6
29.6
31.3
32.7
33.2
33.7
34.2
34.6
35.1
35.6
Herd (index, 1980 equals 100)
100.4
100.8
99.8
100.8
101.4
102.0
102.7
103.3
103.9
104.5
Total feed per head (centners
feed units)
27.4
26.5
28.3
29.7
29.9
30.1
30.4
30.6
30.9
31.1
Meat production (million mt)
15.0
14.7
15.2
16.3
16.5
16.7
17.0
17.2
17.4
17.7
Meat imports (million mt)
1.0
1.0
1.0
1.0
1.0
1.1
1.2
1.3
1.4
1.5
Meat consumption per capita
(kilograms)
49.8
48.3
49.5
52.3
52.6
53.2
53.9
54.5
55.1
55.8
Net agricultural output
(billion 1970 rubles)
81.3
85.0
93.6
98.8
100.0
101.2
102.3
103.5
104.6
105.7
Current purchases (billion
1972 rubles)
26.4
27.0
27.5
28.1
28.6
29.2
29.8
30.4
31.0
31.6
Agriculture value-added
(billion 1970 rubles)
67.2
71.0
80.5
86.1
86.9
87.6
88.3
89.0
89.7
90.3
a Following Soviet practice, grain production is measured in terms of
bunker weight, which includes harvest waste and losses. The feed
variables also are measured gross of waste and losses. By Soviet
definition, feed units have the nutritive value of oats. Grain
production in 1983-90 reflects the past trend in yields and a constant
area sown to grain (130 million hectares). Meat production and meat
imports are not additive because the Soviet measure of production
includes slaughter fat. Agriculture value-added (at factor cost) is
derived from net output and current purchases, but not simply as the
difference between them; it is necessary to adjust for units of
measurement.
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Table 19
Hard Currency Import Capacity a
Billion current $
(except where noted)
Nonfuel exports
8.7
9.1
9.7
10.4
11.1
11.9
12.7
13.6
14.5
15.5
Oil exports
12.0
9.5
9.3
9.0
8.6
8.2
7.7
7.0
7.2
5.3
Price (US $ per barrel)
36.5
31.5
33.4
35.7
38.2
40.9
43.8
46.8
50.1
53.6
Volume (million b/d)
0.9
0.8
0.8
0.7
0.6
0.5
0.5
0.4
0.3
0.3
Gas exports
3.7
3.4
3.6
6.0
8.8
12.1
13.5
14.5
15.6
16.7
Price (US $ per barrel
21.1
22.1
23.4
32.7
34.9
37.3
40.0
42.8
45.8
49.0
Arms sales
5.0
5.2
5.6
6.0
6.4
6.8
7.3
7.8
8.4
8.9
Gold sales
2.7
3.4
3.6
3.8
4.1
4.6
5.2
5.8
6.4
7.2
Price ($ per ounce)
420.0
350.0
371.0
397.0
425.0
455.0
486.0
520.0
557.0
595.0
Volume (tons)
200.0
300.0
300.0
300.0
300.0
315.0
330.0
345.0
360.0
375.0
Credits
5.7
7.7
6.3
6.3
6.3
4.5
4.5
4.5
4.5
4.5
a Import capacity is defined as the level of imports that could be af-
forded, given earnings, credits, and debt service. The order of the line
items in this table follows the SOVSIM calculations: import
capacity equals exports plus arms and gold sales plus credit drawings
plus miscellaneous other net earnings (not shown) less debt service
and less assumed unrecorded expenditures. Higher credit drawings
in 1982-85 reflect financing of the Yamal gas pipeline. Nonpipeline
credits are held at a flat level of $4.5 billion-roughly equal to
average credits per year in the second half of the 1970s.
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Imports other than grain
Machinery imports
27.8 28.6
5.7 6.8
150.0 150.0
37.7 45.0
22.2 21.8
5.0 7.1
25.3
26.3
26.0
25.8
25.6
25.3
24.9
4.6
4.7
4.9
5.0
5.2
5.3
5.5
150.0
150.0
150.0
150.0
150.0
150.0
150.0
30.4
31.4
32.5
33.5
34.5
35.6
36.7
20.7
21.6
21.2
20.8
20.4
19.9
19.4
6.3
5.9
3.7
3.4
3.2
3.0
2.8
a Total imports are equal to import capacity from table 19, adjusted
for inflation. The difference between grain imports in this table and
total grain imports in table 18 is a small amount of grain assumed to
be imported for soft currency.
27.8 30.0 27.5 30.1 33.6 35.5 37.7 39.9 42.2 44.4
2.7 3.4 3.6 3.8 4.1 4.6 5.2 5.8 6.4 7.2
- 1.1 -1.3 -1.8 -2.0 -1.9 -1.8 -1.6 -1.5 -1.4 -1.3
Other earnings 6.0 5.3 5.6 6.0 6.4 6.8 7.3 7.8 8.4 8.9
Current account balance 4.5 -0.3 2.7 3.5 3.9 6.7 7.3 7.6 7.9 8.2
Net borrowing 2.4 4.1 1.8 1.3 1.2 -1.2 -1.5 -1.4 -1.2 -1.1
0.0
- 1.2
a Other earnings include arms sales plus net earnings on tourism,
transportation, and official transfers. The credit assumptions are the
same as in table 19.
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Table 22
Western Debt a
Billion current $
(except where noted)
Credit drawings 5.7 7.7 6.3 6.3 6.3 4.5 4.5 4.5 4.5 4.5
Repayments 3.3 3.6 4.5 5.0 5.1 5.7 6.0 5.9 5.7 5.6
Amount available to offset 0.4 1.9 -0.9 -1.5 -1.5 -3.7 -3.8 -3.6 -3.3 -3.1
trade deficit
Gross debt (end of year) 21.0 25.1 26.9 28.2 29.4 28.2 26.7 25.3 24.1 23.0
Assets (end of year) 8.4 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0
Net debt (end of year) 12.6 17.1 18.9 20.2 21.4 20.2 18.7 17.3 16.1 15.0
Total hard currency earnings 32.3 29.7 30.3 33.6 37.5 42.2 45.0 47.5 50.1 52.6
Debt service ratio (percent) 16.3 18.6 22.5 21.9 19.8 18.6 17.8 16.5 15.1 14.1
a The debt service ratio is calculated as repayments plus interest over
the sum of exports, gold sales, and arms sales (table 19). The credit
assumptions are the same as in table 19.
 Approved For Release 2007/02/28: CIA-RDP83T00853R000100120002-1
Confidential
Confidential
Approved For Release 2007/02/28: CIA-RDP83T00853R000100120002-1