USSR MONTHLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T01083R000100150003-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 48
• Document Creation Date: December 22, 2016
• Document Release Date: June 20, 2011
• Sequence Number: 3
• Publication Date: February 1, 1984
• Content Type: REPORT

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Directorate of
Intelligence
USSR Monthly Reviev~
SOV UR 84-003X
February 1984
Copy 5 7 2
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Directorate of Secret
USSR Monthly Review
table of content
The USSR Monthly Review is published by the
Office of Soviet Analysis. Comments and queries
regarding the articles are welcome. They may be
directed to the authors, whose names are listed in the
Secret
SOV UR 84-003X
February 1984
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Contents
Soviet Economic Strategy Perspective: Andropov's Economic Legacy)
Andropov's economic policies represented basic continuity with the
Brezhnev era; perceptible differences were largely in style rather
than substance. Economic performance improved somewhat in 1983
over the previous two years, a result of fortuitous events as well as
Andropov initiatives. However, Andropov laid only a very tentative
groundwork for future changes in economic policy, testimony to the
innate conservatism of the leadership and to the economic and
political obstacles that block any shift in course. As a result, General
Secretary Chernenko inherits the same set of economic problems
that plagued his predecessor
The pace of Soviet economic growth picked up somewhat in 1983.
Better weather was partly responsible, but the discipline campaign,
managerial changes, and new additions of plant and equipment also
played a role.
Plan goals for 1984 recently announced by Moscow imply an intent
to continue the more rapid rate of economic growth achieved in
1983. Sustaining growth at last year's pace, however, will prove
difficult.
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Although the Soviet economy is largely self-sufficient, imports are
important to Moscow's plans for improving per capita consumption,
boosting productivity, and removing industrial bottlenecks. While
Moscow seems to be intent on shifting its trade even more toward its
East European allies, imports from these countries are, in most
cases, poor substitutes for those from the West.
Soviet Economic Planning for the 1990s
Moscow has begun to sketch out economic plans for the 1990s and
beyond. So far, programs have been announced for consumer goods
and services, energy, and transportation. Analysis of the few
fragments of the long-term programs released suggests that the new
strategies are ambitious and probably will be overhauled more than
once.
Other Topics Soviet and East European Contributions to Warsaw Pact 21
Airpower F__-]
Recent analysis of trends in the strength and composition of
Warsaw Pact air forces opposite NATO indicates that the number
of East European combat aircraft has remained nearly constant
since 1960 while the Soviet contribution to Pact aircraft totals has
increased. The East Europeans have modernized more slowly than
the Soviets and only recently have begun to balance their heavy
emphasis on air defense with a substantial ground attack capability.
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Soviet Analysis of the Falklands Naval Campaign
A number of Soviet naval officers writing about the Falklands
conflict in the open press apparently are urging acceptance of large,
US-type aircraft carriers in their service. The series of articles also
uses the conflict to underscore the threat from antiship cruise
missiles and the need for improved air defenses.
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The Role of Military Commissariats in Mobilizing Soviet Medical 29
Resources for Civil Defense
Soviet military commissariats oversee the training, mobilization,
and transportation of civil defense medical services and play a key
role in balancing military and civil defense requirements for medical
resources.
Environmental Protection Under Andropov 33
The Andropov leadership stressed the need to improve protection of
the environment, but the overriding priority that plant managers
accord to production and sales goals makes implementation of
antipollution measures difficult.
The Soviets continue to reduce the number of economic statistics
released to the public. The latest volume of their annual statistical
handbook is the smallest in 25 years. The disappearance of useful
data from this and other publications has made the analysis of
Soviet economic activity more difficult.
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Briefs Soviet Naval Response to INF Deployments F__1 41 25X1
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Results of US-Soviet Grain Meetings 42
More Soviet Media Coverage of Afghanista 42
New Travel Restrictions in Leningrad 42
Soviets Threaten To Limit Palladium Exports to the United
44
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Soviet Economic Strategy
Perspective:
Andropov's Economic Legacy
Andropov's economic policies represented basic continuity with the Brezh-
nev era; perceptible differences were largely in style rather than substance.
Economic performance improved somewhat in 1983 over the previous two
years, a result of fortuitous events as well as Andropov initiatives.
However, Andropov laid only a very tentative groundwork for future
changes in economic policy, testimony to the innate conservatism of the
leadership and to the economic and political obstacles that block any shift
in course. As a result, General Secretary Chernenko inherits the same set
of economic problems that plagued his predecessor
Andropov came to power with a confident can-do attitude that seemed to
belie his self-effacing denial of "ready solutions" to the economy's major
problems. He launched a tough discipline campaign as a necessary "first
step" to raising economic growth. He fired some ministry-level officials, an
apparent warning to the stodgy governmental bureaucracy that had
remained virtually intact throughout the Brezhnev years. He named
several technocrats to key positions, indicating a choice of competence over
convention, and supported the formation of two new organizations-one in
the party and one in the government-to study new methods of organiza-
tion and management. Although goals of the 1983 Plan showed no
departures from Brezhnev's basic economic strategy, this could be excused
by the short interval between the succession and the time when the
economy had to receive its marching orders for the next year.
His accomplishments appear modest, however. His discipline campaign
was soon toned down and transformed into a more subtle emphasis on
personal responsibility. It apparently did succeed in achieving improved
efforts from both management and labor, but its long-run effects are
uncertain. The governmental and party ranks have experienced some
personnel renewal, but whether the new men are more innovative than
their predecessors remains to be seen. Moreover, the head of the ministerial
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SOV UR 84-003X
February 1984
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indicators, leaving central planning responsibilities almost untouched
bureaucracy is still Nikolay Tikhonov-an old crony of Brezhnev-who
seems hardly the candidate to sanction, much less inspire, a fresh approach
to economic problems. In the pivotal area of correcting systemic weakness-
es, there is little evidence that Andropov's early call to explore the
experience of other socialist countries bore much fruit. The five-ministry
experiment announced last July and introduced the first of this year was
hailed as a significant tilt toward enterprise independence. Upon closer
examination, it is much more modest; it picks up many of the initiatives
that were a part of the mid-1979 reforms but never implemented and
continues a longstanding tradition of tinkering with enterprise success
11th Five-Year Plan (1981-85), which decreed historically low rates of
investment growth to be compensated for by rising capital productivity.
Last year Soviet GNP growth accelerated moderately, and Andropov could
take some of the credit for this improvement (see "Economic Performance
in 1983"). His emphasis on discipline and order, in addition to management
changes in critical sectors such as transportation, apparently paid off in the
better use of industrial capacity, improved coordination in planning
material supplies, and eased bottlenecks. Other key factors were not of his
making. Improved weather helped both industry and agriculture, and
investment growth substantially exceeded plans as it had done in the
previous two years. The reasons for the latter are not fully understood, but
such an increase has been in direct violation of the spirit and letter of the
West (see "The Role of Trade in Soviet Growth Strategy").
The economic plan for 1984 was the first drafted entirely under Andro-
pov's tutelage and, as such, afforded him the opportunity to place his
unique stamp on future Soviet economic policy. He did not. In the domestic
policy area, his strategy for production and resource allocation in 1984
hews close to the pattern of growth achieved in 1983 (see "Economic Plan
for 1984"). Production targets are ambitious, and nearly equal growth is
planned for GNP, consumption, and investment. In foreign economic
policy, the objective stated in the 1981-85 Plan continues to be followed-
increased trade with Communist countries at the expense of trade with the
Pursuing such a course has meant that the Soviet leadership continues to
avoid a direct confrontation with the hard economic issues of the 1980s:
? Slow Growth. By maintaining the fiction that GNP growth can be
sustained by unrealistically high productivity gains, Moscow implies that
adequate growth is ensured for the major end users-consumption,
investment, and defense.
? Capital Productivity. An investment policy of modernization through
renovation is at variance with the failure to grant necessary resources to
the machine-building sector or to provide adequate incentives for the
introduction of new technologies.
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? Labor Productivity. Calls for greater efficiency from the Soviet worker
are not supported by the introduction of strong, well-defined programs
that dangle the carrot or wield the stick.
? Bottleneck Sectors. Plans for grand programs to deal with priority areas
such as energy, transportation, and consumer goods contain solutions
that are neither bold nor new. Moreover, they are built on the present
ministerial system-a natural obstacle to the successful implementation
of programs that cut across sectoral lines (see "Soviet Economic Planning
for the 1990s").
? Economic Reform. Admission that the present system of planning,
organization, and incentives is inadequate for spurring intensive growth is
followed by changes that continue to be incremental and experimental.
? Defense Burden. Despite a slowdown in the growth of resources devoted
to the military effort since the mid-1970s, the burden of defense is still
high-13 to 14 percent of GNP. The evidence suggests that this burden
will remain high throughout the 1980s
The reasons for this conservatism probably lie in the leadership's percep-
tion that the costs of pursuing a more dynamic economic policy outweigh
the benefits. Economically, they see few clear-cut, risk-free, or costless
solutions. Politically, they know that adopting a different set of economic
priorities threatens to upset the always fragile balance between competing
groups and institutions. Moreover, this demands greater movement in
major personnel appointments than has occurred to date. An economic
policy shift would have been difficult enough at the outset of the Andropov
regime when it was busy consolidating power, but it became even more so
as Andropov's health began to deteriorate.
Andropov, then, as Brezhnev before him, leaves a legacy of stunted
potential for the Soviet economy. Chernenko faces a norm of slow growth
and low efficiency for the rest of this decade if present policies are
maintained. His maiden speech as General Secretary stressed continuity
with Andropov's policies. His past record suggests that he may take a more
proconsumer stance and eventually deemphasize the discipline theme. Even
if he decides that he wants to do things differently, the impact will not be
immediate. Politically, it will take some time to consolidate power, and,
economically, relatively long leadtimes are needed for major shifts in
resource allocation to be felt.
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Economic Performance
in 1983
Soviet economic growth accelerated slightly in 1983,
as it had in 1982. The preliminary nature of the
available data precludes a precise calculation of GNP
for 1983. We estimate, however, that the increase in
GNP last year was in the 3- to 31/2-percent range,
compared with 2.6 percent in 1982 and 2.1 percent in
Table 1
USSR: Growth of Gross National
Product by Sector of Origin,
Selected Periods
Average annual
percent change
1981.
Agriculture recorded another large gain in output, but
substantial increases also occurred in industry, con-
struction, and rail transport (table 1). Better weather
contributed to the economy's improved performance;
however, the discipline campaign, managerial
changes, and substantial additions of new plant and
equipment also played a role.
Soviet consumers benefited from the economy's faster
growth last year, with per capita consumption rising
roughly 1'h percent following a small decline in 1982.
Growth in capital investment also increased. As in
1981 and 1982, capital outlays grew more rapidly
than consumption and GNP as a whole, indicating
continued high priority for expansion of productive
capacity.
Industry
Industrial production increased by 3'h to 4 percent, a
substantial improvement over the 2'h-percent rise the
previous year. Output of almost all industrial com-
modities was up. For instance, production of over 90
percent of the nonfood industrial items for which the
Soviet Central Statistical Administration gives figures
was greater in 1983 than in 1982. In 1982 output of
only about two-thirds of these products increased and
then generally by smaller amounts than in 1983.F-
Sharp increases were registered in the chemical, food,
machine-building, and ferrous metallurgy sectors. In
the case of steel, there was a particularly sizable
improvement over 1982. Production of both crude and
finished steel increased 4 percent, reversing the fall in
output that took place the previous year.
Gross national 2.6
products
2.1
2.6
3 to 3'
Agriculture b 1.2
0.4
6.1
5.4
Nonagricultural sectors 3.0
2.5
1.9
3.0
Industry
3.2
2.4
2.3
3'k to 4 c
Construction
1.9
2.1
0.8
3.5
Transportation
3.5
3.8
0.9
2.7
Communications
5.8
5.0
3.2
3.2
Trade
2.9
2.4
0.7
2.2
Services
2.8
2.5
2.2
2.2
CIA estimates valued at factor cost.
b Excludes intra-agricultural use of farm products but does not
make an adjustment for purchases by agriculture from other
sectors. Value added in agriculture grew at an average annual rate
of 0.5 percent in 1976-80, -0.4 percent in 1981, 7.1 percent in
1982, and 4.6 percent in 1983.
c Because of conflicting evidence concerning the output of several
major sectors of industry in 1983, our preliminary estimate is
expressed as a range.
Performance in the critical energy sector was mixed.
Total combined output of major fuels-oil, gas, and
coal-increased less than 2'h percent, compared with
the 3-percent rate of growth attained in 1982. After
three decades of growth, oil production is leveling off.
It grew by only slightly more than half of 1 percent
and averaged 12.3 million barrels per day in 1983.
While gas output grew rapidly-by about 7 percent-
raw coal output fell to 716 million tons, 7 million tons
below plan (table 2).
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Table 2
USSR: Average Annual Growth in
Industrial Production a
Industrial production
3.2
2.4
2.3
31/2 to 4
Industrial materials
2.3
1.9
1.5
3.0-3.5
Ferrous metals
0.9
-0.2
0.4
4.0
Rolled steel
0.8
-0.1
-0.9
4.0
Steel pipe
2.6
0.5
-0.4
4.0
Primary energy b c
4.0
2.4
2.6
NA
Coal c
0.4
-1.7
2.0
-0.3
Oil c
4.2
0.9
0.6
0.6
Natural gas c
8.5
6.9
7.6
7.1
Electric power
4.5
2.5
3.1
3.7
Chemicals
3.6
4.0
1.8
5.0-6.8
Wood, pulp, and -0.6
paper
1.8
0.4
3.3
Construction
materials
1.1
1.3
0
3.0
Machinery
5.0
3.2
3.8
3.7-4.2
Consumer nondurables
1.9
2.0
1.3
3.3
Food
1.4
2.0
2.8
4.3-5.1
Soft goods
2.7
1.9
-0.5
0.8-1.1
a CIA estimates except as noted.
b Includes oil, natural gas, coal, hydro and nuclear electricity, peat,
oil shale, fuelwood, and other renewable energy sources.
c Calculated from official Soviet data.
Agriculture
After four consecutive poor or mediocre harvests,
domestic farm output rose by about 5'/2 percent last
year.' Major factors underlying this surge were a
larger grain harvest and sizable gains in the livestock
sector.
Of the crops reported on, sugar beet and potato
outputs were up markedly; cotton and vegetable crops,
however, were down from 1982 levels.
A particularly good performance was turned in by the
livestock sector. Meat output reached a record 16
million tons, up 4 percent from 1982. Milk output
' Our calculations of growth in farm output are subject to
considerable uncertainty, largely because the Soviets have not
Table 3
USSR: Production of
Selected Farm Products
Million metric tons
(except where noted)
189 1
58
180
210
10.0
9.6
9.3
9.2
81
61
72
82
Sunflower seed
4.6
4.7
5.3
5.1 a
Potatoes
67
72
78
83
Vegetables
27.5
27
30
29
Livestock products
Meat
15.1
15.2
15.4
16.0
Milk
91
89
91
961/2
Eggs (billion units)
68
71
72.5
741/2
Livestock herds b
(Index: 1970 = 100)
121.5 1
22.2
124.3
126.7
a USDA estimate.
b End-of-year livestock numbers weighted by respective 1970
average realized prices.
grew by 6 percent to an alltime high of more than 96
million tons, reflecting the mild 1982-83 winter and
unusually good forage crops in 1982 and 1983. At the
same time, livestock herds also rose to new highs,
reflecting both the better harvest in 1983 and the
leadership's strong emphasis on the building of herds.
The availability of quality foods in the USSR in-
creased last year as a result of the improved agricul-
tural performance, although not enough to relax the
informal rationing system for selected food items.
Surveys of private farm markets and state retail stores
as well as other reports showed increased supplies of
most foodstuffs. However, private farm market prices
rose slightly, indicating that the availability of foods
was not sufficient to completely offset the additional
demand generated by income growth.'
fluctuate in accordance with supply and demand.
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Table 4
Average Annual Growth of Metric
Ton-Kilometer Freight Turnover a
4
1
5
Railroads
2
-1
4
Rivers
4
3
4
Highways
7
2
-0.4
Table 5 Billion US $
USSR: Estimated Hard Currency Debt
Gross debt
17,865
20,850
20,100
20,400
Commercial debt
10,015
13,000
11,500
11,000
Government and
government-backed
debt
7,850
7,850
8,600
9,400
Assets in Western banks 8,565
8,425
10,000
10,500
Net debt 9,300
12,425
10,100
9,900
Transportation
The transportation picture was also rosier in 1983.
Total freight turnover increased about 5 percent with
all modes of transport showing marked improvement.
Most significant was the turnaround in the perform-
ance of the railroads, the backbone of the transport
system. Rail freight turnover climbed to 3.6 trillion
ton-kilometers, an increase of 4 percent over 1982-it
had fallen over 1 percent in 1982
Foreign Trade
We estimate that the value of Soviet imports grew
about 5 percent and the value of exports approximate-
ly 7 percent in 1983, with about three-fourths of the
increase in both coming from increased trade with
Communist countries. Moscow's hard currency
balance-of-payments position is estimated to have
remained at about the 1982 level. The Soviets boosted
oil exports last year to counteract the fall in oil prices,
increased arms deliveries to less developed countries,
and restricted the growth of imports. Most of the rise
in imports came from an estimated $600 million jump
in oil imports (for reexport) from Iraq, Libya, Saudi
Arabia, and Syria-largely in repayment for deliver-
ies of arms. Soviet imports of Western machinery and
equipment also may have increased. The value of
agricultural imports fell, on the other hand, reflecting
a better performance in the domestic farm sector.
Imports of pipe-which increased substantially in
1982, largely because of the needs of the gas pipeline
construction program-and of nontubular steel may
have stabilized. Soviet net hard currency debt appar-
ently remained at about $10 billion (table 5).
Reasons for the Better Performance
The somewhat improved economic performance owes
much to last year's return to normal weather, which
helped boost farm production. In addition, a relatively
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temperatures and below-normal snowfalls benefited
nonagricultural sectors. The more favorable condi-
tions bolstered industrial production by permitting
some rebuilding of stocks of fuels and other inputs less
in demand when the weather is mild. The weather
also helped to ease transportation snarls, which, in
turn, relieved industrial bottlenecks.
Another factor that contributed to improved perform-
ance was the substantial addition to new productive
capacity in the last two years. Commissionings' of
new plant and equipment increased by a hefty 5
percent in both 1982 and 1983, up sharply from the
rate at which capacity had been increasing since the
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i'olicy and personnel changes introduced by the new
regime also played a part in the upturn in growth.
Andropov's discipline campaign appears to have com-
pelled greater effort from both labor and manage-
ment. Management changes may have been a particu-
larly significant factor in the turnaround in rail
transportation, a sector which seems to have suffered
from especially lax leadership during the Brezhnev
era. The new Minister of the Railways, Nikolay
Konarev, not only tightened discipline but also insti-
tuted several new programs-such as enlisting indus-
trial enterprises and other shippers in the repair of
damaged freight cars-that apparently paid some
dividends.
Resource Allocation
Capital investment rose by about 4 percent last year,
thereby absorbing a larger share of GNP, as it had in
the first two years of the 11th Five-Year Plan (1981-
85). For 1981-83 as a whole, average annual growth in
investment was almost 4 percent, compared with
about 2.7 percent for GNP. The 11th Five-Year Plan
called for slower growth in investment than in overall
economic growth. The rationale was that lagging
investment growth would be offset by rising capital
productivity based on more efficient use of capital and
speedier technological progress. The consistently fast-
er increase in investment than in GNP suggests (1)
that this strategy was abandoned or ignored, and the
premise on which it was based rejected from the
outset, and/or (2) that planners have been unable to
control investment from the center-particularly new
construction activity, which has been increasing faster
than planned.
Although consumption continued to increase at a
slower rate than GNP, the consumer fared better in
1983 than in 1982, with per capita consumption rising
roughly 1'h percent. Serious imbalances in consumer
markets continued in 1983, however, reflecting the
mismatch between output mix and consumer demand.
In addition, mostly because of previous price in-
creases, inventories of some nonfood goods rose, caus-
ing Moscow to reduce prices on selected consumer
items three times last year.
The Soviet data yielded no direct information on
allocation of resources to the third major end-use
component of GNP-defense. The official defense
budget for 1983 did not increase over the previous
year, but this figure is of little significance; it is far
lower than actual defense expenditures and incompat-
ible with known Soviet force levels and military
programs.
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Economic Plan for 1984
The economic goals announced at the Supreme Soviet
meeting in December imply an intent to continue in
1984 the more rapid rate of economic growth
achieved in 1983. Sustaining growth at last year's
pace will prove difficult, since fulfillment of the 1984
goals depends heavily on substantial increases in
productivity. It could be accomplished, however, par-
ticularly if the weather (which took a turn for the
better in 1983) continues to improve and if a continua-
tion of the discipline campaign exacts increasingly
greater effort from Soviet workers.
These special factors, however, cannot be counted on
to give the economy a lift steadily and indefinitely.
Fluctuations in the weather are inevitable, and gains
from heightened discipline must eventually level off.
Meanwhile, the problems that have constrained
growth since the mid-1970s-for example, a tighten-
ing labor supply and increasing costs of exploiting
natural resources-have not abated. Thus, the outlook
is still for a trend rate of GNP growth in the balance
of the 1980s of about 2 percent a year.
The 1984 Plan is conservative. It points to no signifi-
cant changes in resource allocation policy and con-
tains no new initiatives for altering the way the Soviet
economy is run. It is unlikely to be significantly
affected by Andropov's death. With 1984 already well
under way, Chernenko is not in a position to introduce
major changes this year. Furthermore, he has not
indicated any disposition to do so. He has stressed
continuity in economic policy, endorsing the discipline
campaign and the other, more modest initiatives
introduced by Andropov.
1984 Targets
Soviet plans imply a GNP growth rate in 1984 of 3 to
3'h percent. Planned growth in industrial production
is 3.8 percent-in the upper half of the range for
actual growth of roughly 3'h to 4 percent in 1983. Of
those sectors for which goals have been published, the
key machine-building sector is scheduled for the most
rapid growth-5.8 percent
Table 1
USSR: Average Annual Growth in GNP
In the energy sector the targeted rates of growth for
oil and natural gas are 1.3 percent and 8 percent,
respectively. Both goals are probably overly ambi-
tious-oil output grew only about one-half of 1 per-
cent in 1983. Indeed, production from the key
Tyumen' region failed for the first time last year to
reach planned output. Annual increases in natural gas
production of about 7 percent have been more typical
in recent years. The 723-million-ton goal for coal
production is the same as the 1983 target. Coal
production declined from 718 million tons in 1982 to
716 million tons last year.
Agricultural output is to rise by roughly 5 percent,
following the 5.4-percent gain calculated for 1983.
Good snow cover and plenty of soil moisture so far
this year bode well for both the winter grain crop and
spring planting. The mild winter weather experienced
so far this season also holds out the prospect of an
even better performance by the livestock sector in
1984. But favorable weather conditions must continue
if agricultural output this year is to exceed the 1983
level.
The plan calls for growth in rail freight turnover to
slip to 1.8 percent from 4 percent in 1983. This
projected decline, despite plans to maintain the 1983
GNP growth rate, probably reflects Soviet intentions
to markedly improve efficiency of the railroads by
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reducing the amount of "irrational" hauls through
new incentives, decentralizing management, and step-
ping up the pace of modernization. In addition, it
could indicate continuing efforts to raise the share of
freight carried by other modes of transport.
Prescriptions for Meeting Goals
As to how the 1984 Plan is to be fulfilled, the
December speeches by the party leadership and the
plan goals themselves listed general requirements-
higher productivity, more conservation of resources,
"a decisive turn" toward scientific and technological
progress-but offered little on how these require-
ments are to be met. Nor did Chernenko's speech to
the Central Committee on 13 February give any
guidance on how this was to be done.
The earlier speech delivered on behalf of Andropov at
the December Central Committee meeting repeated
previous appeals for stricter worker and management
discipline and increased efficiency in use of labor,
plant and equipment, and raw materials. It called for
growth in labor productivity to exceed by a percent-
age point the targets laid down in the plan itself (3.4
percent for labor productivity in industry, 3.3 percent
in construction, and 8'h percent in socialist agricul-
ture-far above what the Soviets have actually
achieved in recent years). Andropov's speech likewise
urged an additional cut in production costs of half a
percentage point beyond the cost reduction targets in
the plan. The purpose in tacking on these additional
requirements is perhaps to dramatize the urgent need
for greater efficiency.
Demands for higher labor productivity are rising as
the labor supply squeeze intensifies. Total civilian
employment increased by 0.6 percent in 1983 (0.5
percent in industry) compared with an average annual
rate of growth of 1.2 percent during 1976-80 and of 1
percent during 1981-82. The plan indicates even
slower growth-about 0.4 percent-in 1984. F__1
The plan also lays down tougher conservation goals
for energy, metals, and raw materials. Like most such
targets, they are not likely to be reached; enterprise
managers still must concern themselves foremost with
meeting output targets.
Andropov's December report urged more rapid "sci-
entific and technological" advances. If the new regime
maintains the same policies, a more serious effort may
be made to increase the payoff from research work
and to spur the introduction of new technology into
the economy. A number of machine-building indus-
tries were criticized, in particular, for failing to
produce more technologically advanced equipment.
Greater innovation and the more rapid introduction of
new technology into industry are necessary if the
Soviets are to achieve higher rates of economic growth
over the long run. But nothing in Andropov's remarks
suggested an intent to make significant changes in the
Soviet planning and incentive system, which discour-
ages innovation and retards technological progress.
Little Change in Policy Implied
In his short tenure, Andropov repeatedly and candidly
acknowledged that the USSR was plagued by serious
economic problems. Despite his demands for bold
action to deal with them, he basically continued
Brezhnev's policies, although Andropov's mark is
evident in selected areas-the discipline campaign,
for instance. In 1984, even under Andropov's succes-
sor, continuity will apparently remain the hallmark of
the USSR's economic program. For the most part, the
1984 Plan merely reemphasizes programs and initia-
tives inherited from the Brezhnev regime.
Resource Allocation. The 1984 Plan calls for a
3.9-percent increase in fixed capital investment. How-
ever, since investment growth has run well ahead of
plan each year since the 11th Five-Year Plan began,
the actual increase in investment in 1984 may well be
greater. The 1984 Plan also does not indicate major
changes in the allocation of investment resources
among the major claimants. Finance Minister Garbu-
zov indicated that capital investment will go "in the
first place" for projects in energy and the agro-
industrial complex, metallurgy, machine building,
chemicals, transport, and consumer goods. With the
exception of consumer goods and chemicals, these
sectors are the same ones singled out for priority
attention in the 1981-85 Plan.' Investment in energy
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is to grow by 11 percent this year. This is in line with
the five-year increase of 50 percent originally targeted
for energy in the 11th Five-Year Plan.
Table 2
USSR: Average Annual Growth
in Foreign Trade a
Several of the planned goals imply a 4-percent in-
crease in consumption for 1984, compared with a rise
of about 2 percent in 1983. Fulfillment of the con-
sumption plans will be dependent in part on availabil-
ity of foodstuffs and, therefore, on agricultural
performance. The planned acceleration in growth of
consumption is to be accompanied as usual by a
continuing decrease in wage growth to help contain a
buildup of unspent purchasing power should targets
for consumer goods and services not be met. The
regime is also continuing its efforts to better match
supply and consumer demand by improving the as-
sortment and quality of both food and nonfood con-
1981
1982
1983b
1984
Plan c
1981-85
Plan
With
Communist
countries
2.3
5.3
5
10
5.6
With non-
Communist
countries
7.8
10.8
4
-10
2.3
a Calculated from Soviet data expressed in constant prices.
b Estimated.
c Soviet statements are unclear as to whether plan figures are stated
in constant or nominal terms.
sumer goods.
No targets for military spending are given except the
meaningless defense budget, which is essentially the
same as the ones published for the last three years.
The only reference to defense in the Andropov speech
presented to the party plenum last December stated
that "everything necessary has been done to maintain
the country's defense capacity at a proper level.'t
Agricultural Policy. Soviet agricultural policy does
not appear to have changed. No new plans for crop
production were promulgated, and support for the
Food Program apparently will be continued. The
agro-industrial complex is to receive a huge share of
total investment-about one-third-with large in-
creases going to support activities such as rural
transportation, storage facilities, and production of
agricultural machinery and fertilizer
Foreign Trade Policy. The foreign trade plan suggests
that Moscow is still bent on increasing trade with its
Warsaw Pact partners and other Communist coun-
tries at the expense of trade with the West. In his
annual report to the Supreme Soviet, Gosplan Chair-
man Baybakov said that trade with "socialist coun-
tries" would increase 10 percent and would reach 61
percent of total Soviet trade turnover. It amounted to
54 percent in 1980. He implied that trade with
capitalist countries would drop about 10 percent
This is an even more ambitious goal for reducing
trade with the West than the one last year. Aside
from the desire to reduce the reliance of CEMA
countries on the West, an important factor in Mos-
cow's policy is a longstanding desire to limit its
borrowing from the West. The regime also may be
anticipating some decline in its hard currency earn-
ings this year (perhaps because it expects reduced
earnings from recent, exceptionally high levels of oil
and arms exports).
Economic Reform
The 1984 Plan and the accompanying comments by
Soviet leaders-including those by Chernenko since
he became General Secretary-indicate that the lead-
ership does not intend to introduce new initiatives in
1984 beyond the modest innovations already institut-
ed or announced before December. The Andropov
speech to the Central Committee, for example, called
for continuation of the drive to expand the use of
small labor brigades in industry, construction, and
agriculture. In addition, it strongly endorsed the
"industrial experiment"-announced in mid-1983
and given mounting publicity since then-that gives
increased autonomy to enterprises in five industrial
ministries. The experiment began 1 January 1984. In
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early February, on the eve of Andropov's death, a
similar experiment giving greater operational inde-
pendence to personal services establishments in a few
areas of the RSFSR was announced. Both the brigade
system and the main elements of the two experiments
in the industrial and services sectors are essentially
continuations of programs and experiments intro-
duced under Brezhnev.
Andropov undoubtedly faced both economic and polit-
ical obstacles-such as a conservative ideology and an
entrenched bureaucracy-in his efforts to introduce
change. In addition, however, other factors may have
played a role in the Andropov leadership's reluctance
to introduce a more dynamic economic program:
? The somewhat improved performance of the econo-
my in 1983 may have increased Moscow's confi-
dence that actions already taken had been sufficient
to ensure more rapid growth in the years ahead.
? Andropov may have been mustering his resources
for the 1986-90 planning period.
? It is also possible that Andropov was forced to slow
the pace at which he was proceeding in exchange for
gaining the appointment of "his team" to key party
and government posts.
? Failing health also may have prevented Andropov
from pushing for a more dynamic program.F_
For the moment, the watchword under the Chernenko
leadership is "continuity." It is difficult to know what
approach to the economy the new General Secretary
might take in the longer run, particularly since his
past statements do not suggest a clearly defined or
comprehensive economic philosophy or strategy. He
has been aligned with those urging more attention to
consumer welfare and corresponding increases in the
availability of consumer goods. He thus might opt, in
the 12th Five-Year Plan, for some redirection of
investment toward the consumer goods and services
sectors. He has also advocated regional administra-
tion of specific economic programs, such as the Food
Program. He apparently prefers regional to ministeri-
al organization. In 1982 he attacked the autonomy of
the ministries, which he said "eats away like rust at
the economic mechanism." However, there is nothing
in his background or past pronouncements to indicate
an inclination toward bold systemic change that
would significantly reduce centralized planning or
Outlook
Although fulfillment of the 1984 Plan depends on
rises in labor productivity that are out of line with the
increases the Soviets have achieved in recent years,
Moscow could sustain last year's GNP growth in
1984. Better weather, stimulation of still greater
worker effort by the discipline campaign, opportuni-
ties for greater efficiency that can be capitalized on
without systemic change (as in transport), and contin-
ued sizable additions to the capital stock could all
combine to maintain, or conceivably elevate, growth
in 1984.
In the long run, however, these special factors-that
either move erratically (such as the weather) or will
lose force eventually-are likely to bow before the
deeper problems that have constrained growth since
the late 1970s. Some of these problems are intensify-
ing. The increment to the working-age population has
fallen to its lowest level in two decades. The cost of
extracting, processing, and shipping energy and raw
materials continues to rise, while the quality of some
materials continues to deteriorate. Transportation re-
mains a problem-particularly the railroads, which
continue to operate under strain despite the improved
performance in 1983. In agriculture, chronic difficul-
ties such as organizational problems, weak incentives,
insufficient skills, and inadequate infrastructure will
continue. These problems are likely to keep the trend
rate of growth for GNP to about 2 percent a year for
the rest of the decade. Only if fixed capital investment
were to continue to increase at the 4-percent rate
reached in 1983 would the trend rate be raised to a
perceptible degree. To raise it substantially would
require a much more rapid increase in investment.
management.
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The Role of Trade in
Soviet Growth Strategy
Foreign trade has become an important, albeit not
critical, element in Moscow's economic strategy.
Growth in the volume of trade has outstripped growth
in real GNP since 1970. While Moscow has tradition-
ally favored trade with its East European allies, it has
had to acquire advanced technology and agricultural
products from the West. A reluctance to depend too
heavily on its Western trading partners may be
prompting Moscow to reorient trade even more to-
ward the East.' Because imports from the East are
generally not good substitutes for those from the
West, however, Soviet gains from any substantial
shift in trade between the two regions will be difficult
to accomplish.
Trends in Soviet Trade: East Versus West
Although the Soviet economy is largely self-sufficient
(purchases from abroad account for only about 10
percent of GNP), imports are important to Moscow's
plans for improving consumption, boosting productivi-
ty, and removing industrial bottlenecks. The role of
imports in the economy has steadily increased since
1970. The average annual growth of Soviet import
volume during 1971-83 was 8 percent-roughly twice
the growth rate of domestic economic activity
Most of the import growth occurred in the first half of
the 1970s as a sharp boost in purchases of Western
machinery and equipment pushed total real imports
from the West up by about 16 percent a year. This,
together with an 8-percent average annual growth in
imports from Communist countries, resulted in a 10-
percent annual growth in total imports. Concerned
over the rapid increase of its hard currency debt in the
mid-1970s, Moscow sharply curbed the growth of
imports from non-Communist countries. Since 1975
real imports from both Communist and non-Commu-
nist countries have grown at about the same rate,
roughly 6 percent a year, but only because of the
extraordinarily large imports of Western grain and
other agricultural commodities necessitated by disap-
pointing farm output after 1978.
Eastern Europe as a Source
Soviet imports from the East and the West are largely
complementary in that the USSR imports from the
West mainly those goods not available in sufficient
quantities or quality (if at all) from the East. For
political and strategic as well as economic reasons,
Moscow also has been willing to import from Eastern
Europe commodities not readily salable in the West.
About 70 percent of the USSR's machinery and
equipment imports come from its Communist allies-
mostly the East European countries. These imports
represent more than 40 percent of all Soviet purchases
from the Communist countries (see the chart). While
this equipment is outdated and often not of quality
comparable to that available in the West, in many
instances it is equal to or better than Soviet-produced
equipment. The trade partly reflects ongoing efforts
by the USSR to plan for and to integrate East
European components into output of the Soviet ma-
chine-building industry-inputs that range from basic
machine tools, to component parts, to semimanufac-
tures.
The USSR also looks to the Communist countries for
manufactured consumer goods to supplement its own
production. More than half of Soviet imports of such
goods-primarily clothing and furniture-currently
are purchased in Eastern Europe, and 15 percent are
from other Communist countries. Consumer goods
produced in Eastern Europe generally are of better
quality than those produced in the Soviet Union. The
concentration on purchasing manufactured consumer
goods from Eastern Europe may reflect a historical
Soviet reluctance to spend hard currency on consumer
goods imports. In those instances where the USSR
has gone to the West for such purchases, orders have
been placed largely with soft currency trading part-
ners like India rather than hard currency trading
partners.
' In this article, the terms East and West refer respectively to the
USSR's Communist and non-Communist trading partners
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Soviet Imports by Commodity'
Consumer goods
Agriculture
Ferrous metals
Unspecified
Other
A substantial share-about 40 percent-of the
USSR's meat imports comes from Eastern Europe.
While meat imports from the West stagnated in 1982,
those from the Communist countries, especially Hun-
gary, continued to grow. Well over half of Moscow's
imports of fruits and vegetables also come from
Eastern Europe.
Reliance on the West
While continuing to rely on Eastern Europe for much
of its machinery and equipment needs, the USSR
began in the early 1970s to look to the West for
imports of capital and technology to spur productivity
and to break production bottlenecks. For example,
imports of Western equipment and technology have
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been critical to Soviet efforts to expand the chemical
and automotive industries even though these im orts
often were difficult for the USSR to assimilate.
Moscow also has come to rely on Western suppliers
for a wide variety of specialty imports such as high-
strength steels and chemical products (notably phos-
phate materials, plastics, pesticides, and manmade
fibers). These are commodities that the Communist
countries either'do not produce at all or do not
produce in the quantity needed by the USSR.
Imports of grain and other agricultural commodities
have long been the largest component of the USSR's
Western trade. Four consecutive poor harvests begin-
ning in 1979 pushed agricultural imports to record
levels. Because of the limited ability of the Commu-
nist countries to expand grain production, Moscow
had to rely almost entirely on Western countries to fill
the gap between domestic output and demand.
Looking Ahead
The USSR faces a dilemma if it tries to boost imports
substantially in the coming years. With regard to its
Western trade, the USSR is not expected, at least in
the near future, to benefit from another round of
sharp price increases for major export earners like oil
and gold that helped pay for most of the import bill in
the 1970s. (Export price increases accounted for most
of the nearly fivefold increase in the value of Soviet
exports that occurred during 1971-80.) The Soviets
probably would also calculate that any effort to boost
hard currency earnings through an export drive would
be a limited success. Weak energy demand in West-
ern Europe suggests a Soviet push there could falter
fairly quickly, and demand for the USSR's nonenergy
products is uncertain.' Moscow also would be loath to
greatly increase its hard currency borrowing in order
to sustain high import growth as it did in the first part
of the 1970s.
The Short-Run Outlook
The USSR is continuing its attempts to limit imports
from the West while increasing pressure on Eastern
Europe to provide more. This effort stems from
Moscow's longstanding conservative approach to bor-
rowing and an apparent reluctance to rely too much
on Western suppliers. The deficits Eastern Europe has 25X1
accumulated in its trade with the USSR over the past
several years represent a prior Soviet claim on the
region's output. A sharp decline in Soviet price subsi-
dies to its allies has put even more pressure on Eastern
Europe to come up with larger amounts of goods for
the Soviet Union. Finally, not only is the USSR trying
to get more and better goods from its allies, it is also
curtailing its own exports to them of oil and other raw 25X1
materials.
The current five-year plan (1981-85) emphasizes Mos-
cow's desire to limit its trade with the West and to
increase its ties with its Communist trading partners.
The plan originally envisaged an annual average rate
of growth in overall volume of trade of 4 percent;
trade with Communist countries was to grow at an
annual rate of nearly 6 percent, implying a growth
rate of only 2 percent per year for trade with non-
Communist countries.
The plan for 1984 targets a rise in trade with
Communist states of 10 percent and implies a decline
of roughly 10 percent in trade with non-Communist
countries. This prospective drop in trade with the
West in 1984 reflects in part Moscow's concern over
having substantially exceeded planned hard currency
outlays for imports from the West during 1981-83.
The volume of trade with non-Communist countries
rose 7 percent a year-far ahead of the 2-percent rate
planned for 1981-85-during these three years. The
sharp runup in imports of Western farm products had
a particularly large effect on the growth of this trade.
Had agricultural imports not surged in 1981, real
imports would probably have declined in that year.
Although the Soviets may be able to hold the growth
of this trade in 1984 considerably below the annual
7-percent rate of 1981-83, they are unlikely to realize
a substantial drop in their trade with non-Communist
countries.
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1986 and Beyond
Over the longer run the Soviets also are limited in
how much they can curb imports from the West
without sacrificing the health of the domestic econo-
my. Moscow will need to: (1) maintain access to
sufficient-in some years perhaps very large-quanti-
ties of grain and other farm products from the West
to maintain consumption of quality foods at least near
current levels, (2) purchase the necessary industrial
materials-notably specialty steels-to operate pro-
ductive plant at planned levels, and (3) import ad-
vanced machinery and technology to help meet energy
and other priority investment needs. Barring poor
harvests, the USSR should be able to hold agricultur-
al imports below the record levels of the recent past. If
so, it may even be able to make moderate increases in
nonagricultural imports without running its import
bill up sharply. In addition, in some areas-such as
specialty steels and large-diameter pipe-the Soviets
may soon be able to rely to a greater extent on their
own production.'
Moscow, meanwhile, will probably continue its efforts
to get more from its allies. Although East European
countries' ability and interest in redirecting output to
the Soviet market is constrained by their own limited
resources and economic difficulties, Moscow seems
determined to pressure its allies for more and better
quality goods. This will include a push on Eastern
Europe to contribute more to the Soviet machine-
building and defense industries.
Eventually, Moscow hopes that broader and tighter
integration within CEMA will provide substitutes for
a larger share of trade with the West than it has in the
past. While the Soviet rhetoric is not new-the USSR
has long advocated joint production and specialization
within CEMA-Moscow seems to be pressing its East
European allies more than ever to make firm commit-
ments on this issue. This Soviet push is perhaps
reflected in the recent report that the East Europeans
have agreed to provide manpower, equipment, and
possibly hard currency toward construction of an iron-
ore combine in the Ukraine. The project is the first
major CEMA joint investment to be negotiated since
the late 1970s. Balanced against the desire for greater
cooperation are strong national interests on the part of
both the East Europeans and the Soviets that have
hindered progress toward a fuller integration in the
past
The limited prospects for turning trade toward East-
ern Europe and the growing constraints the Soviet
economy is likely to face in the coming years give
Moscow strong reasons to keep its options open with
respect to its future trade with the West. While Soviet
leaders are sure to continue to view any relationship
with the West with a cautious eye, they also know
that circumstances could force them to turn again to
the West, as they did recently with agricultural trade.
They also know that continued access to advanced
Western technology can provide relief to a troubled
economy. The future course of relationships between
the USSR and its Western trading partners will
depend on a number of factors-chief among them
the political climate, Soviet export potential, Mos-
cow's willingness to increase Soviet debt to the West
and, in turn, Western willingness to lend to the
USSR.
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Soviet Economic Planning
for the 1990s1
With the 12th Five-Year Plan (1986-90) still on the
drawing boards, Moscow has begun to sketch out
economic plans for the 1990s and beyond. In addition
to the Food Program, adopted in 1982, the Soviets last
year announced that long-term plans for consumer
goods and services, energy, and transportation were in
the works. These three sectors, together with the food-
producing sectors, currently account for roughly 48
percent of GNP and about 60 percent of investment.
So far only fragments of the new programs have been
released. The success of these programs will depend
on (1) future decisions concerning expansion of the
resource base, (2) allocational decisions, taking into
account the competing demands from other claim-
ants, and (3) the resolution of chronic problems within
each of the three sectors. However, even the frag-
ments suggest that the plans are ambitious and
probably will be overhauled more than once.
Consumer Goods and Services
The leadership faces the challenge of improving work-
er performance at a time when gains in Soviet living
standards have slowed. Chronic shortages of sought-
after goods and services, as well as the poor quality
and mix of products, have contributed to lackluster
performance by workers.
As a supplement to the Food Program, the recently
announced program for nonfood consumer goods and
services rounds out the plan for increasing the quality
and availability of consumer goods and services. The
Politburo last September approved the inclusion of the
program in the 1986-90 Plan. The Soviet media
reported in November that a Politburo commission
had been established to oversee the program for the
"12th Five-Year Plan and the longer term." The
program, according to Moscow Radio, is aimed at
boosting the output and quality of-
? Nonfood consumer goods.
? Personal transportation services.
? Everyday services (including laundry, dry cleaning,
personal care, and rental services, as well as auto-
mobile, housing, and other repair services).
? Housing construction.
? Recreational services.
No further details have been released. According to
the December plenum speech delivered on behalf of
Andropov, the Politburo is still drawing up the pro-
In working out the details, Soviet planners must
address two key issues:
? How to influence consumer-goods producers to raise
product quality and to provide a mix of products
more compatible with consumer demand.
? How to ensure the availability of resources to meet
production goals for consumer goods and services.
Administrative measures taken so far hold little prom-
ise for a sustained boost in the production of consumer
goods and services. For example, in an effort to
encourage heavy industry to produce more consumer
goods, enterprises are being tasked with producing a
specified amount of consumer goods per ruble of the
wage fund. This new success indicator is unlikely to
help much, however, since it does not relieve enter-
prises of the obligation to meet their primary output
targets. Moreover, it does nothing to improve quality
and encourage a product mix more in line with
consumer demand. On the services side, the leader-
ship in early February adopted a decision to institute
an "experiment" designed to boost the quality and
volume of consumer services and ensure the timely
completion of orders. The experiment, however, is
focused on a very small sample of provinces and does
not provide for an acceleration in allocation of re-
sources. Unless greatly expanded in scope, it holds
little promise for making substantial improvements in
consumer services for the foreseeable future.
Officially, the Soviets have not raised the resource
priority of nonfood consumer goods and services, but
they may increase investment in light industry during
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the 12th Five-Year Plan. Increases for food process-
ing are already included under the Food Program.
Deputy Minister of Foreign Trade V. N. Sushkov said
last April that investment in the light and food-
processing industries will increase at the expense of
heavy industry such as chemicals and that the invest-
ment changes would be reflected in "the five-year
plan," probably a reference to the 12th. Soviet Pre-
mier Tikhonov, during a meeting with West European
officials last year, stressed that Moscow wants to
improve the quality of consumer goods by moderniz-
ing old plant and equipment and building anew-
perhaps with Western equipment. Although he ex-
pressed hope that the Soviets would soon contract
with Western firms to build model plants in the
USSR, no details were given.
Energy
The impetus for a longer term energy development
scheme has been building for several years as growth
in energy production has slowed, become technically
more demanding and costly, and has required longer
project leadtimes. The annual growth of oil produc-
tion has slowed to an average of less than 1 percent in
the past three years. Coal production has stagnated
since 1978. Gas production increased at a rapid
average annual rate of 7 percent in 1981-83 and has
accounted for about two-thirds of the total increment
to total energy production since 1978. Although nu-
clear power production has increased fairly rapidly, it
is dwarfed by the fossil fuels in the Soviet energy
supply.
A 20-year energy program, in gestation since at least
the mid-1970s, calls for more emphasis on coal and
nuclear power production. At the same time, oil and
gas industries-particularly in West Siberia-are to
continue as important sources of energy growth and
exports despite some shift of emphasis from current
production to exploration. The energy program en-
dorses the sizable expansion of surface coal mines east
of the Urals, primarily Ekibastuz and Kansk-Achinsk,
and of the mine-mouth power plants which would
transmit electricity along ultra-high-voltage lines to
the Urals and the central industrial region. In the
sphere of nuclear energy, the program calls for accel-
erated development of nuclear power generation. F_
The long-range program also sets goals for energy
consumption. The key consumption targets are based
on (1) a vigorous program to convert boilers from oil to
gas and (2) a renewed drive for energy savings,
perhaps backed up by a new monetary incentives
program.
Foreign trade also has an important role in the
20-year energy program.
the plan calls for oil and natural gas to
remain key export commodities. Imports of Western
technology and equipment will apparently still be
needed for specialized operations in the exploration,
recovery, and refining of oil and natural gas, as well
as for speeding up surface coal mining, constructing
coal slurry pipelines, and developing synfuels from
coal
The underlying goals of the energy program are
ambitious and will be difficult to achieve. Moscow has
a poor track record in meeting energy conservation
goals and accurately predicting leadtimes, investment
requirements, and technical effort for large energy
projects. Although the energy program does not spell
out requirements for resources, we believe that, in
view of the likely requirements, energy's share of
investment must increase. Moscow's plans to intensify
its effort in oil and gas exploration and expand coal
and nuclear power development will add to the cur-
rent investment burden-much of which is being used
to prop up oil production.
Transportation
Even less is known about the transportation program
than about the consumer goods and energy programs.
V. E. Biryukov, deputy chairman of Gosplan for
transportation, announced its existence during a
Znaniye Society lecture in October. His only elabora-
tion was that the program recommended a new
centralized organ be formed to oversee all transport
ministries. This was also the recommendation from a
meeting of transport experts in January 1983. So far,
however, no additional resource commitments have
been linked to the program, and we have no indication
that the Politburo has adopted or even considered it.
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Secret
Even though little has been said directly about the
transport program, its origins extend back at least to
Brezhnev's 1979 plenum speech. Since that time
Moscow has voiced the need to:
? Expand the use of water transport.
? Upgrade automation and control of freight ship-
ments within and among carriers.
? Increase the capacity of the rail network through
use of higher capacity freight cars and more power-
ful locomotives.
? Increase the efficiency of highway transport by
emphasizing common carriers dispatched centrally
rather than truck fleets operated by enterprises. F_
The creation of an overall coordinating body called
for in the long-term transportation program may
reflect Moscow's intention finally to improve the
integration of rail, highway, and water transport. If
the trends in rail freight persist away from raw
materials toward semifinished or finished goods-
greater integration, particularly of rail and highway
services, is essential.
However important, this administrative change will
not solve the ongoing problem of inadequate resource
allocation to transportation. The performance of the
Soviet transport system has deteriorated markedly
since the mid-1970s. The root cause lies in past
investment priorities that shorted the transport sector
and focused available transport capital on large spe-
cialty projects such as the Baikal-Amur Mainline
(BAM) and oil and gas pipelines. The rail system,
which carries the majority of bulk freight, is operating
at alarmingly high densities, and major bottlenecks
have developed along the main lines
Transportation planners may be counting on the
completion of the BAM and perhaps the current gas-
pipeline construction program to free up resources for
new transportation projects. The wisdom of this strat-
egy is questionable. For example, there is considerable
debate among Soviet planners and economists about
the future disposition of the manpower, machinery,
and materials currently devoted to the BAM.
Resource Implications
Even though the long-term programs-as stated-do
not spell out requirements for resources, Moscow
cannot ensure their success without pledging addition-
al resources to back them up. However, it is difficult
to see how Moscow would balance simultaneous in-
creases in resource commitments to these sectors with
the likely competing demands of other claimants, such
as those supporting other heavy industry and the Food
Program. For example, even increased investment
allocated for energy development will not yield a
return if other sectors that contribute to or depend on
the energy supply are shorted.
It is likely-at this stage-that Moscow has not even
attempted to balance these resource equations. The
programs probably reflect ambitious "wish lists" in
the Kremlin rather than firm agendas. As such, the
strategies and timetables for the programs probably
will be subjects of continual revision.
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Other Topics
Soviet and East European
Contributions to
Warsaw Pact AirpowerF_
Recent analysis of trends in the strength and composi-
tion of Warsaw Pact air forces opposite NATO
indicates that the number of East European combat
aircraft has remained nearly constant since 1960
while the Soviet contribution to Pact aircraft totals
has increased. The East Europeans have modernized
more slowly than the Soviets and only recently have
begun to balance their heavy emphasis on air defense
with a substantial ground attack capability.
The non-Soviet Warsaw Pact (NSWP) air forces have
a combined strength of about 2,400 active fixed-wing
combat aircraft-about 35 percent of the 6,600 com-
bat aircraft opposing NATO (see figure 1).' While the
number of aircraft in the East European forces has
remained virtually unchanged since 1960, the number
in Soviet air force units opposite NATO has increased
about 15 percent, from 3,600 to about 4,200. As a
result, the share of NSWP countries in the total
Warsaw Pact aircraft inventory has decreased from a
high of about 43 percent in 1970 to its present level.
Figure 1
Fixed-Wing Combat Aircraft Opposite
NATO, 1960-83
I I I I I I L_L l- -L J L1. J
0 1960 65 70 75 80 83
Force Modernization
The NSWP air forces have lagged the Soviet Air
Forces in deploying newer, more capable aircraft (see
figures 2 and 3). Extensive deployment of newer
aircraft in the NSWP air forces has generally fol-
lowed modernization of the Soviet forces opposite
' This total for fixed-wing combat aircraft opposite NATO includes
all Soviet frontal aviation units in Eastern Europe and in the
Leningrad, Baltic, Belorussian, Carpathian, Odessa, and Transcau-
casus Military Districts; the Soviet strategic air armies headquar-
tered at Legnica, Vinnitsa, and Smolensk; and the national forces
of Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and
NATO by an average of about five years, although
token numbers of new aircraft have often appeared in
East European units simultaneously with their deploy-
ment in the Soviet Air Forces.
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Figure 2
Modernization of Non-Soviet Warsaw
Pact Aircraft, 1960-83
Figure 3
Modernization of Soviet Aircraft
Opposite NATO, 1960-83
III II IIIIIII11111111111 IIIIII1111111111IIIIII11
0 1960 65 70 75 80 83 0 1960 65 70 75 80 83
As a consequence of this lag, the East European air
forces currently include smaller components of later
generation aircraft than do comparable Soviet units.'
As of mid-1983, less than 50 percent of aircraft in the
NSWP forces were relatively modern third-genera-
tion models, almost 30 percent were second genera-
tion, and more than 20 percent were of the pre-1960
first generation. By comparison, 80 percent of Soviet
aircraft opposite NATO were third generation and
about 15 percent were second generation. Only a
handful of first-generation aircraft are in active
service in Soviet combat units.
3 We classify aircraft by generations according to their initial
operating capability (IOC) date. First-generation aircraft, intro-
duced prior to 1960, include the Badger, Beagle, Fagot, Flashlight,
and Fresco. Second-generation aircraft, with an IOC date of 1960
to 1970, include the Brewer, Fishbed C-H, and Fitter A. Third-
generation aircraft, introduced after 1970, include the Backfire,
Blinder, Fencer, Fishbed J-N, Fitter C-K, Flogger B-H, and
A closer examination of the East European and Soviet
inventories reveals a greater disparity in aircraft
capability than this generational comparison indi-
cates. Whereas a high percentage of the third-genera-
tion aircraft in the Soviet forces are MIG-23 Flog-
gers, a large proportion of NSWP third-generation
aircraft are updated variants of older aircraft such as
the MIG-21 Fishbed. Several newer Soviet third-
generation aircraft-the SU-24 Fencer, for exam-
ple-probably never will appear in the NSWP forces
unless Pact planners decide to establish a much
greater NSWP offensive capability.
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The lag in modernizing non-Soviet air forces reflects
the USSR's priorities for updating its own forces
before exporting large numbers of new aircraft to its
Pact allies, as well as the reluctance of the East
Europeans to increase spending on new weapons, in
spite of strong Soviet pressure. The net result is that
the contribution of the NSWP air forces to overall
Pact air capability is substantially less than their
35-percent share of the Pact aircraft inventory would
Mission Contrasts
The traditional role of the NSWP air forces has been
air defense. In 1983 about 1,600 aircraft were air
defense fighters. Although this represents a decline of
about 200 since 1970, fighters still constitute nearly
two-thirds of the total NSWP fixed-wing combat
force. By contrast, only 40 percent of the Soviet
aircraft opposite NATO in 1983 were fighters (see
While NSWP fighter strength has decreased, the
number of aircraft with a ground attack role has
grown. In 1983 about 640 aircraft were in NSWP
ground attack units, an increase of 180, or 40 percent,
over the number 10 years earlier. Nearly half of this
increase resulted from the establishment of a ground
attack force in Romania, which now has 80 aircraft-
about 25 percent of its air force-assigned this role.
The growth in the NSWP ground attack forces
paralleled a similar trend in the Soviet forces opposite
NATO. Since 1970 the number of aircraft in Soviet
fighter-bomber units has increased nearly 25 percent,
to more than 2,000, while the number of aircraft
assigned to defensive units has grown little. These
increases in ground attack aircraft reflect Soviet
General Staff stress on the need to achieve air
supremacy by attacks on airfields. East European air
forces were first included in Pact plans for such
operations in the mid-1970s.
Despite the increased emphasis on ground attack,
approximately 60 percent of the NSWP ground at-
tack forces still consist of first-generation aircraft.
Although the addition of 100 Flogger H fighter-
bombers into East German, Czechoslovak, and Bul-
garian units since 1975 has increased the ground
Figure 4
Mission Emphasis of Soviet and
Non-Soviet Warsaw Pact Air Forces, 1983
\\~ Reconnaissance
Ground
attack
Non-Soviet
U Fighter-bombers/
li
ht b
g
ombers
Fighters
attack capabilities of those national forces, it falls
short of a substantial upgrading of NSWP forces. E
Tactical reconnaissance aircraft in the NSWP forces
number about 180, or less than 10 percent of the total
force. The 430 Soviet reconnaissance aircraft opposite
NATO represent a somewhat larger percentage of the
total Soviet force, but include aircraft having long-
range theater reconnaissance roles.
Implications
The large disparity between the Soviet and NSWP
contributions to Warsaw Pact airpower provides th(
Soviets with a compelling argument to encourage
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greater East European expenditures for Warsaw Pact
defense. The East Europeans probably will continue
to resist such pressures, however, and we expect their
air forces to remain at about their current numerical
strength through the end of this decade. Much of any
additional expenditure for new aircraft is likely to be
allocated for fighter-bombers. We do not expect,
however, that expenditures will be sufficient to up-
grade significantly the NSWP air forces.
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Soviet Analysis of the
Falklands Naval Campaign
Several Soviet naval officers have used the Falklands
conflict to emphasize the necessity of controlling the
air in modern naval combat. The officers have focused
on carrier-based air support as the centerpiece of
warfare on the open ocean and have also detailed the
threat to surface ships from antiship cruise missiles.
Writing in the Soviet Navy's professional journal
Morskoy Sbornik and other open-source publications,
they buttress arguments that have appeared over the
years in support of large carriers for the USSR.
Furthermore, the articles suggest that these officers
believe there are aspects of naval warfare-such as air
defense and electronic warfare-that deserve particu-
lar attention in the Soviet Navy
The articles are notable for several reasons other than
their analysis of the conflict. The authors stress the
same themes and, in some cases, use almost the same
words when discussing the role of the British aircraft
carriers. In addition, their interpretations of the war's
events are remarkably similar. These similarities and
the lack of dissenting views in the press suggest strong
support for their analysis among the naval leadership.
The dearth of anti-Western propaganda and adher-
ence to key tenets of Navy Commander in Chief
Gorshkov's writings indicate the articles are serious
efforts to shape the thinking of naval officers and
government officials about prominent issues in the
Navy. We do not know how widely the issues have
been debated within the Soviet military leadership,
particularly the General Staff. That several of the
articles appeared in publications other than Morskoy
Sbornik suggests, however, that an effort was made to
reach a diverse audience outside the Navy.
None of the authors refer to the Soviet Navy or make
specific recommendations based on an analysis of the
Falklands naval campaign. However, writers on naval
matters frequently cite Western naval developments
to indirectly advocate a particular course of action
when discussing policy issues in the open press, and
Admiral Gorshkov has endorsed the study of Western
naval experiences for application to the Soviet model.
Advocacy for Aircraft Carriers
The Soviets have debated the place of aircraft carriers
in their Navy since the mid-1930s. On at least three
occasions, plans were made to acquire carriers, but
none came to fruition until construction of the first
Kiev-class carrier, which carries helicopters and verti-
cal takeoff and landing (VTOL) aircraft, began in
1970. Since that time, there have been signs of
continuing debate over the wisdom of building large
carriers capable of supporting conventional takeoff
and landing (CTOL) aircraft. The strong support
given carriers in the present articles by such promi-
nent officers as Admiral Kapitanets, commander of
the Baltic Fleet, and Rear Admiral Uskov, one of the
Morskoy Sbornik editors, suggests the debate has
closed and efforts are now being directed at develop-
ing a unity of views within the Navy. The articles
appeared as we began to see evidence that the Soviets
are building what we believe is their first US-type
The important role played by the British carriers is
couched in terms of two key elements of Soviet naval
doctrine-the necessity of deploying a balanced force
and assuring the combat stability of naval forces.
Both Admiral Kapitanets and Admiral Uskov, writing
in Morskoy Sbornik, are specific in declaring that the
makeup of the British force was balanced and, more
important from our standpoint, that "the aircraft
carrier force served as the main combat might and on
the whole gave the formation combat stability."
Furthermore, Uskov and Kapitanets note that "under
modern conditions no ship formation (including an
amphibious assault formation) is capable of effectively
carrying out assigned missions without a reliable air
cover" provided by "multimission air-capable combat-
ants with multipurpose aircraft and helicopters."
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Kapitanets adds that "there is a continuing increase
in the role of aircraft in combat actions at sea" and
"without winning and holding air supremacy on an
operational and tactical scale it is impossible to count
on success of an action or an operation as a whole."
The Baltic Fleet commander leaves no doubt that
carriers are what he has in mind by stating that
combat in the "zone of oceans and seas" requires a
different approach than combat in enclosed sea the-
aters and coastal seas, where small combatants armed
with missiles and guns are more appropriate
The authors specify the roles they envision for carrier-
based aviation. Admiral Uskov holds that "carrier
aircraft should be prepared not only to carry out air
defense missions for surface ships but also to operate
against ground targets." Others suggest an antiship
role by criticizing the Argentines for not using their
carriers to launch strikes against the British naval
force. The commentators agree that to accomplish
these missions, as well as provide for the carrier's
defense, carrier aircraft should also be responsible for
long-range reconnaissance and early warning. Both
the Argentines and British are criticized for deficien-
cies in these areas.
The Soviet naval officers believe that British air
support would have been much improved if early
warning and interceptor aircraft could have been
accommodated on the Hermes and Invincible. Lack-
ing these aircraft, the British were unable to prevent
the high losses they suffered. This criticism is note-
worthy because the British carriers are similar to the
Kiev-class in that neither can launch the type of
aircraft the Soviet writers feel are necessary to help
counter the high-speed, low-flying threats so prevalent
in modern naval combat
The substance and tone of these articles indicate
strong support for large carriers capable of operating
a variety of aircraft, including those requiring cata-
pult-assisted takeoffs. If, as we believe, the Soviets
have begun a new class of aircraft carriers, it probably
will be similar to US carriers, although with some
differences reflecting Soviet design practices. If the
debate over the suitability of CTOL carriers were
continuing, the commentaries would probably have
focused on Western analysis of the conflict, which
emphasized the vulnerability of aircraft carriers in
today's threat environment. We believe, however, that
the criticism of the British carriers in the articles is an
effort to point out how a good performance could have
been improved using larger, more capable carriers.
Bolstering Fleet Air Defenses
The Soviets thoroughly scrutinized British air defense
efforts, giving them mixed grades. After the Argen-
tine Navy withdrew to coastal waters, the major
threat to British naval forces was from Argentine
aircraft attacking with bombs and cruise missiles.
While the Soviet writers do not ignore the effective-
ness of Argentine bombing, they appear determined to
sensitize their audience to the seriousness of the cruise
missile threat. Admiral Uskov declares that the con-
flict confirmed the high effectiveness of cruise mis-
siles in destroying surface ships. The other writers
follow up on this theme by describing in detail
Argentine cruise missile attacks but concentrate on
British defenses, including electronic countermeas-
ures. They go on to prescribe a variety of means for
overcoming British deficiencies.
In their opinion, the British could have significantly
reduced their losses if they had been able to deploy
long-range early warning aircraft and high-perform-
ance interceptors on their carriers. Without these and
adequate numbers of Harrier vertical/short takeoff
and landing (V/STOL) aircraft, British surface com-
batants had to rely primarily on their own defenses to
counter Argentine air attacks. Destroyers were used
as radar pickets to warn of attacks, but, without
effective air cover, they were vulnerable and two were
sunk. Picket ships arrayed in echelon did provide 25X1
notice of attacks but with little warning time since
Argentine pilots came in at very low levels.
Under these conditions, electronic countermeasures
became the backbone of shipboard air defenses, ac-
cording to the Soviet commentators. Admiral Kapi-
tanets opines that "electronic warfare acted not so
much as a form of support as a form of combat
actions directly interconnected with air defense." In
addition, Captain 1st Rank Rodionov, in the January
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1983 Morskoy Sbornik, and other commentators
analyze how the British were generally successful
using both passive and active measures against Ar-
gentine aircraft. Rodionov concludes, however, that
without early warning by reconnaissance aircraft
"only completely automated antiaircraft missile and
gunnery complexes with a high density of fire can
solve the problem of destroying antiship missiles."E
The articles appear to lay down a framework for
organizing naval air defenses that includes carrier-
based aircraft. Early warning aircraft well out from
the main force would signal the appearance of a
threat and possibly direct the response of interceptor
aircraft from a carrier. Inside this initial line of
defense, surface ships would respond with longer
range surface-to-air missiles (SAMs) and electronic
countermeasures. Attacking forces passing through
this second echelon of defense would then be faced
with concentrated fire from short-range SAMs, addi-
tional electronic countermeasures, and antiaircraft
These deficiencies in ground-based air support cur-
rently leave Soviet surface combatants vulnerable to
Western carrier-based airstrikes.2 Their ship-based air
defenses would probably be ineffective in the face of
even limited US naval airstrikes. Even with anticipat-
ed improvements in their capabilities, we do not
believe that total reliance on shipboard defenses will
prove adequate through the 198k
The British ability to project power effectively at such
a great distance clearly impressed the Soviet writers
and probably demonstrated to them the importance of
carrier-based air support for intervention operations.
The problems of providing air defense for Soviet naval
forces operating close to home without carrier-based
aircraft would be magnified in operations distant from
the USSR against even limited opposition. There is no
guarantee, for example, that Soviet aircraft and their
supporting forces could gain access to airfields within
range of landing operations.
This outline suggests a significant improvement in the
Soviet concept of layered defenses-the addition of
large carriers for fleet air defense. We believe that
using large, catapult-equipped carriers is the only way
the Soviets could deploy the types of aircraft they
touted in the articles for an effective air defense of
their naval forces in wartime. The Soviets have long-
range, land-based AWACS aircraft to provide early
warning for the approaches to the USSR. Some of
these may be tasked during wartime to work with the
Navy, but because there are so few of them it is
unlikely any would operate continuously with naval
surface forces at sea. Bear D reconnaissance aircraft
also could provide some early warning capability
against hostile aircraft and cruise missiles, but their
primary task would be supporting strikes against
interest ideveloping a capability to support ground
operations with carrier-based aircraft. We believe,
however, that the Forger is only marginally accept-
able in this role and that the Soviets see a need for a
more capable attack aircraft.
Other Topics of Interest
The articles discussed other elements of the British
naval operations, and the Soviets appear to have
begun exploring whether they can adopt some of these
measures in their own Navy:
? Conducting amphibious landings at night was one
of the key factors in the success of the landings at
San Carlos, according to Admirals Kapitanets and
Some elements of the Soviet Air Forces will support
naval operations. Their bombers will participate with
naval aircraft in strikes against Western surface
combatants, particularly aircraft carriers. Ground-
based interceptors could provide air defense for naval
units operating in coastal areas, but do not have the
range to cover areas where the most critical surface
operations would occur
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? Using airborne assault forces in an amphibious
landing. The speed with which troops can be put
ashore by helicopters is stressed in several of the
articles. The Soviets may have recently added an
airborne-trained battalion to each of the three naval
infantry brigades.
? Modifying merchant ships to carry aircraft. The
authors point out how the British were able to
quickly adapt merchant ships to transport additional
Harriers and helicopters. The Soviets have recently
modified a roll-on/roll-off ship to accept VTOL
aircraft and helicopters and may have begun train-
ing pilots to test this concept.
In addition, one article deals exclusively with logistic
support for the British operations, and others note
that the British could not have succeeded in retaking
the Falklands without a well-developed "mobile rear."
Nevertheless, there are no indications that the Soviet
Navy intends to place a higher priority on construct-
ing fleet support ships. Merchant ships on contract to
the Navy resupply combatants at sea with fuel but are
not able to transfer stores such as ammunition. Fur-
thermore, naval repair ships have not operated at sea
away from protected anchorages under the conditions
experienced by the British
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The Role of Military
Commissariats in Mobilizing
Soviet Medical Resources
for Civil Defense)
In the aftermath of an intercontinental nuclear ex-
change, the Soviet Union would rely heavily on its
civil defense medical resources to aid in poststrike
recovery. Although the armed forces clearly have
priority in medical resource allocations, we believe
that the Soviets have taken steps to provide for the
training, mobilization, and transportation require-
ments of civil defense medical services through mili-
tary commissariats
Background
One of the stated objectives of the Soviet civil defense
program is to provide sufficient medical resources for
the protection of the population and treatment of
civilian casualties during wartime. Soviet unclassified
writings describe civil defense measures designed to
"eliminate the medical consequences" of nuclear,
biological, or chemical weapons. These measures
include:
? Mobilization of civil defense medical personnel and
facilities for treating mass casualties.
? Special civil defense training for all medical
personnel.
? Provision of emergency medical supplies and
transportation.
? Organization of sanitation and epidemic control
teams to prevent the onset of infectious diseases.
? Medical evacuation of casualties from urban areas
Implementation of these measures would consume
huge quantities of medical resources. A major prob-
lem the Soviets would face is the need to balance the
manpower, training, and transportation requirements
of the armed forces with those of civil defense. We
believe that the Soviets see the military commissariats
as the key to resolving this problem.
maintaining records on reservists, and issuing defer-
ments. They also are responsible for registering na-
tional economic resources suitable for military needs,
conducting partial or general mobilization, and allo-
cating civilian transportation for military purposes
during mobilization.
in addition to the military
activities noted above, military commissariats play a
role in the civil defense training, classification, and
assignment of medical personnel and in the allocation
of civilian transportation for civil defense needs. In
1978 the civil defense staffs of the Baltic republics,
for example, were placed under the control of military
commissariats. If such subordinations of civil defense
staffs to military commissariats are the norm, they
may be intended to balance the mobilization require-
ments of the armed forces with those of civil defense
and eliminate the dual assignment of medical re-
sources that might occur with separate civil defense
and commissariat staffs.
Training
Virtually all Soviet medical personnel receive exten-
sive military and civil defense instruction while at
medical training institutes through courses taught by
resident military faculties that are supervised by
military commissariats. A four-year combined mili-
tary and civil defense training program at the State
Medical Institute of Alma Ata is typical of this type
of instruction. Civil defense training at the institute is
mandatory for both males and females, and the
courses include combined instruction in basic military
subjects and civil defense topics. The civil defense
topics include treatment of nuclear, biological, and
chemical casualties and the use of protective clothing.
In some cases traditional military instruction is em-
phasized for males, while instruction for females
.Military commissariats are administrative organiza-
tions subordinate to the military district within which
they are located. Their activities include supervising
preinduction military training and indoctrination, is-
suing callups for military service and reserve training,
concentrates on civil defense.
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Military faculties also give civil defense medical
training at other specialized institutes. F
The
program had two semesters devoted to civil defense
training and three semesters to medical training.
Upon graduation, the commissariats assigned the
students to the military reserves as nurses. A similar
program also exists at the University of Uzhgorod. In
addition, commissariats generally supervise first aid,
civil defense, and premilitary training of Soviet youths
in the Voluntary Society for the Cooperation of the
Army, Air Force, and Navy (DOSAAF).
Military commissariats, in conjunction with civil de-
fense staffs, also provide for postgraduate civil defense
training of medical personnel. We have evidence that
some medical personnel are assigned to a resident
physician course taught at the Balashikha civil de-
fense school in Moscow Oblast. The course is taught
twice a year and lasts about six weeks.
between 40 and 50 physicians graduate rom t e
course each year, and these probably are assigned to
military civil defense units after graduation. In some
areas, commissariats recall medical personnel to ac-
tive duty for two weeks every five years to receive civil
defense training. The training is normally conducted
at the commissariat headquarters by full-time person-
nel assigned to the commissariat's medical section.
Personnel Allocations
Commissariats play a key role in balancing the medi-
cal personnel requirements of civil defense with those
of the Soviet armed forces. Upon graduation medical
personnel are either inducted into the armed forces or
are issued a reserve military service booklet contain-
ing their military specialty code, reporting location in
the event of mobilization, and other service-related
information by the commissariats. Those medical
personnel who are called to active military duty are
given a similar military reserve booklet on leaving
active duty. We are uncertain as to the length of time
medical personnel remain on military reserve service
rosters. Although the Soviet law on universal military
service varies the reserve retirement age according to
rank, sex, and length of service
which time they are assigned to civil defense reserves
permanently. Female medical reservists are usually
assigned to civil defense reserves at age 50.
We are uncertain as to the number of medical
personnel that would be allocated to the armed forces
and civil defense after mobilization because of the
similarity of their training. However, we believe that a
share of the total would be available for civil defense
after the needs of the armed forces are met. While the
primary mission of medical personnel after mobiliza-
tion is to support the armed forces
some military medical reserve personnel
may be assigned to civilian hospitals after mobiliza-
tion.
Soviet civil defense plans call for the relocation of
urban hospitals to exurban areas. Many hospitals will
provide cadres for first aid field detachments (OPM),
each with approximately 150 personnel of which 25
are doctors. Large hospitals will provide sufficient
cadres for two OPM, while the smaller hospitals and
polyclinics will provide cadres for one. These cadres
are to be augmented by personnel trained in first aid
from civil defense formations at factories, schools,
institutes, and similar enterprises.
We estimate that the total number of medical person-
nel available to both the Soviet armed forces and civil
defense in wartime would be roughly 4 million. At
present there are approximately 1.1 million doctors in
the Soviet Union (see table). Soviet medical personnel
also include approximately 2.9 million feld'shers (phy-
sician's assistants), nurses, midwives, laboratory tech-
nicians, medical orderlies, and other assistants. We
have no reliable figures on the breakdown of medical
workers by category since 1975, when about 17
percent werefeld shers, 50 percent were nurses, and
33 percent were technicians, midwives, or other medi-
cal personnel
Transportation
'Transportation assets to supplement the armed forces
and for civil defense will be drawn from the civilian
economy and allocated by military commissariats
during mobilization.
military commissariats generally carry male me ica
reservists on military reserve rosters until age 55, at
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Soviet Physicians by Specialty
Total a
1,063,000
Internal medicine
237,000
Surgery
115,000
Obstetrics/gynecology
62,000
Pediatrics
120,000
Ophthalmology
21,000
Ear, nose, and throat
21,000
Neurology
26,000
Psychiatry
25,000
Tuberculosis
23,000
Dermatology/gyphilology
18,000
Radiology
36,000
Sports medicine
5,000
Epidemiology
61,000
Stomatology
92,000
Dentistry
48,000
General practitioners
153,000
a Includes approximately 100,000 military physicians.
Moscow Main Administration of Motor Transport
would transfer 30 percent of its heavy trucks, 30
percent of its lifting machinery, and 70 percent of its
fuel-carrying vehicles to the military. Most of the
remainder would be available for civil defense use.
We believe that, once mobilization is accomplished,
the military commissariats will make additional trans-
portation assets available to assist in civilian medical
evacuation and supply. Some transportation assets
probably would be available to assist in medical
evacuation of civilian casualties in the poststrike
period. Military commissariats also maintain rosters
of civilian ambulances for wartime mobilization.
We estimate that the Soviet Union has approximately
681,000 buses; 86,000 were built in 1982 alone.
Although a portion of these buses would be used to
provide support to the military, we believe that a large
percentage would be available for civil defense. Modi-
fication kits for converting civilian buses into ambu-
lances have been available since at least 1977, but we
are uncertain as to the numbers and locations of these
kits. The conversion process reportedly takes four to
six hours and involves the addition of litters and
medical equipment. Once converted, the buses can
accommodate 10 to 20 stretchers. The converted
medical buses and some support vehicles would be
deployed to the exurban area to provide medical
support
Exercises
Exercises have shed further light on the role of
military commissariats in civil defense.
personnel from military commissariats have su-
pervised medical evacuation and training exercises in
conjunction with civil defense staffs.
he exercise
included setting up a first aid field detachment for
civilians and instruction in general civil d nse medi-
cal topics a civil
defense medical exercise in o ma in the Kirghiz
SSR that had about 1,000 participants and was
supervised by the head of the local military commis-
Outlook
It is clear from the evidence available that military
commissariats play a significant role in balancing the
medical resource requirements of civil defense and the
armed forces. Although the Soviets still face major
uncertainties in providing sufficient trained medical
personnel and civilian transportation assets for both
the armed forces and civil defense, subordination of
the civil defense staffs to military commissariats has
helped eliminate the dual assignment of medical
resources in some areas. Further improvements in the
system of allocating medical resources to civil defense
will depend to a large degree on the extent of these
resubordinations.
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Environmental Protection
Under Andropov
Public statements by high-level Soviet officials ex-
pressing distress over pollution increased significantly
during the Andropov reign. Indications of heightened
concern included:
? Frank and forceful comments in Andropov's speech
to the Central Committee in December, labeling
environmental problems "acute" and assailing the
inadequacy of previous efforts to deal with them.
? A Politburo order in January to the Council of
Ministers to draft a comprehensive plan for improv-
ing the environmental protection system.
? Measures adopted in recent months to step up
monitoring and enforcement of antipollution laws.
? A public Politburo reprimand of the heads of five
major industrial ministries ' in January for pollut-
ing.
The greater attention to safeguarding the environ-
ment was in line with Andropov's emphasis on candid-
ly identifying the USSR's economic problems. It may
also have reflected greater sophistication on the part
of the Andropov regime, which evidently recognized.
more clearly than its predecessor the damage done to
the economy by disregard for the environment. An-
dropov explicitly linked environmental protection with
the drive to conserve resources, a vital element in his
efforts to improve the economy. The shock effect of
the spectacular Dnestr River disaster last Septem-
ber-when a dam at a fertilizer plant in Drogobych
burst, spilling poisonous chemicals that killed more
than 2,200 metric tons of fish and disrupted the
supply of fresh water to the major cities of Odessa and
Kishinev-may have further stiffened Andropov's re-
solve to undertake more vigorous environmental pro-
tection programs
It remains to be seen, however, whether heightened
attention will lead to significantly better results.
Andropov's intention to increase investment in anti-
pollution projects at a somewhat faster rate than in
the past several years and faster than the rate planned
for total investment has been ratified as part of the
1984 budget. But the share of total investment is still
small. He was evidently counting mainly on stricter
and more efficient application of existing environmen-
tal protection laws. It is too early to tell whether
Chernenko, a member of the old guard closely identi-
fied with the conservative policies of Brezhnev, will
follow through on Andropov's get-tough approach.
However, even if he does, any drive to impose greater
antipollution discipline faces formidable obstacles as
long as the economy's system of rewards and penalties
continues to give overriding priority to fulfillment of
short-term production and sales goals.
Evidence of Disregard for the Environment
The Soviet press provides abundant statistical and
anecdotal evidence of the severity of the USSR's
environmental problems. For example, according to
illustrative newspaper and journal reports in the last
two years:
? Only one-third of the harmful emissions from plants
under the Ministry of Ferrous Metallurgy are
treated.
? Forty percent of the water discharged by enterprises
in the following ministries is polluted: Timber, Pulp,
Paper, and Wood Processing; Chemical and Petro-
leum Machinery; Power Machinery; Petroleum In-
dustry; Meat and Dairy Industry; Heavy and Trans-
port Machinery; Machine Tools and Tool Industry;
and Mineral Fertilizer Production.
? Pollution in the city of Apatit on the Kola Peninsula
was so severe last summer that "for two days the
polar day turned into night; small ventilating win-
dows in residential buildings couldn't be opened
even a crack; people walking along the streets
wrapped their faces in whatever they could, for
what they breathed was not air, but stinging dust."
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USSR: Investment Expenditures for
Environmental Protection
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
Expenditures 1,143
(million
rubles, 1973
prices)
1,528
2,084
1,887
1,783
1,833
1,879
1,900
1,845
1,854
1,900
2,000
Rate of NA
growth
(percent)
33.7
36.4
-9.5
-5.5
2.8
Share of 1.2
total
investment.
(percent)
1.5
1.8
1.6
1.5
? Heavy industrial pollution is killing off thousands of
acres of forest around the Soviet automaking city of
Togliatti.
? Large areas of the Crimean seascape-well known
as vacation spots-have been polluted by industrial
wastes.
? Environmental problems in the Kuznetsk Basin are
"causing increasing deaths and genetic defects
among babies."
Western observers also report cases where the Soviets
have been heedless about preserving the environment.
A visiting US oilman, after touring a showcase oilfield
in the Caspian area, commented that it was "the
dirtiest mess" he had ever seen and if it were in the
United States it would be shut down by regulatory
authorities. Pollution, probably emanating from the
heavy industrial areas of the USSR, has, according to
a recent US Office of Naval Research study, caused
environmental damage in the Far North "on a scale
that could never be imagined, even by the most
pessimistic observer." This contamination-called
Arctic haze-"could cause excess heating of the
atmosphere, acid rain, scattering and absorption of
Lack of Concern: The Essence of the Problem
The long history of serious and mounting environmen-
tal problems in the USSR is fundamentally a reflec-
tion of the low priority accorded to environmental
protection. Although the share of total investment
allocated to environmental protection projects rose
sharply in 1973-75 from 1.2 to 1.8 percent, it has
returned almost to the earlier level. For the last four
years the share has been 1.3 percent, which is less
than half of the share in the United States, where
environmental investment is roughly 3 percent of total
investment. Moreover, not all of the appropriated
funds are spent. In the 10th Five-Year Plan, the
Ministry of Power and Electrification spent only 83
percent of the funds it was allocated for air pollution
control; the Ministry of Tractor and Agricultural
Machine Building, 82 percent; Nonferrous Metallur-
gy, 76 percent; and the Coal Industry, only 48
percent. Similarly, ministries exhibiting high rates of
water pollution spent less than their full allocation:
Chemical and Petroleum Machinery, 86 percent; Ma-
chine Tool and Tool Industry, 77 percent; and Heavy
and Power Machinery, 74 percent.
visible light, and cloud changes.'
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A recent Pravda article observed: "Year after year
the environmental projects are the ones where the
least amount of work gets done. Such projects are
usually avoided because they are unprofitable. They
take a lot of work but do very little for the gross
output figure." Even when pollution control facilities
are built, they often do not serve their function. For
example, pollution levels from the Semipalatinsk Ce-
ment Plant actually rose for three years after installa-
tion of abatement equipment because, in striving to
maximize production increases, the plant ignored
optimal operating procedures and produced a higher
level of pollutants than the equipment could handle.
Furthermore, maintenance of pollution abatement
equipment tends to be poor. A Soviet commentator
recently complained that "Even when plants do have
pollution control systems no one takes a real interest
and they often break down." This is caused, in part,
by a lack of trained specialists. At present about
40,000 specialists are trained a year, a number
Pravda has labeled inadequate. To make matters
worse, according to Pravda, "only a small percentage
of graduates are assigned to jobs in the field."F___1
A major reason for the high equipment breakdown
rate and the low fund utilization rate is the Soviet
system for formulating and implementing pollution
control policies. There is no single independent organ
to formulate policy, detect violations, and enforce
environmental laws. The primary responsibility for
protecting a resource is entrusted to the same ministry
that exploits the resource. Since the number-one
priority of the ministry is meeting annual production
targets-a goal to which pollution control contributes
nothing-this is like putting the fox in charge of the
henhouse. Although the central government has
formed commissions to study and monitor the envi-
ronmental problem, they have limited enforcement
powers and primarily serve in an advisory capacity.
Government inspection teams had twice ordered the
managers of the fertilizer plant on the Dnestr River to
shore up the dam holding industrial wastes in the
months before the dam broke. Similarly, repairs have
been recommended for an industrial waste dam near
the Crimean resort of Lake Saki, but as Pravda
recently reported, "The dam can be reinforced proper-
ly only by allocating more than 1.5 million rubles ...
and the Ministry of the Chemical Industry isn't about
to come up with the money."
In the past such defiance on the part of ministry and
enterprise officials has generally gone unpunished, in
large measure because of a lack of personnel and legal
power in the enforcement bodies. For example, while
water resources are technically protected by the Min-
istry of Land Reclamation and Water Resources,
local inspectorates are understaffed, cannot impose a
fine of more than 100 rubles, and have no authority to
shut a plant down. Pravda recently stated that "As a
rule people who are found responsible for environmen-
tal violations get off with slaps on the wrist every
Recent Measures
There are indications that Andropov tried to support
his tough antipollution rhetoric with concrete-but
limited-measures. Investment in environmental pro-
tection facilities is scheduled to rise 5.3 percent in
1984-slightly faster than the projected 3.9-percent
rise in total investment. The planned increase
amounts to only 100 million rubles, however, and will
bring antipollution investment (measured in constant
1973 rubles) to only 2 billion rubles, still slightly
below the peak of 2.1 billion rubles reached in 1975.
A few steps were taken with respect to monitoring and
enforcement. In July 1983 the USSR Supreme Court
instructed lower courts "to further improve their work
in hearing cases involving violations of environmental
protection laws." A special commission on Environ-
mental Protection and Rational Utilization of Re-
sources under the Presidium of the Council of Minis-
ters-set up in 1981 but relatively inactive until
recently-has instructed ministries to give attention
to implementing pollution abatement programs and
ordered executives of the USSR Capital Investments
Bank and the USSR State Bank to prevent the
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startup of newly constructed enterprises with unfin-
ished environmental protection facilities. The Politbu-
ro-in its January order to "raise the efficiency of the
whole system of controlling and monitoring the state
of the environment"-likewise stressed that ministries
must take greater responsibility for environmental
protection.
The key to the effectiveness of these measures-and
others that may be taken in the future-is whether
the judicial and extraministerial regulatory bodies
will be given genuine power to compel compliance
from ministries and their enterprises. While Cher-
nenko may increase regulatory powers, it is doubtful
that they will be allowed to impede the attainment of
production goals. Thus, the improvement in environ-
mental protection to be gained from these additional
powers is likely to be limited
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Reduced Publication of
Soviet Statistics
The Soviets continue to reduce the number of eco-
nomic statistics released to the public. The latest
volume of their annual statistical handbook Narod-
noye khozyaystvo SSSR v 1982 g. (Narkhoz) is the
smallest edition since 1966, containing 573 pages
versus 1,008 pages in the 1967 volume (see table 1).'
The disapperance of useful data from this and other
publications has made the analysis of Soviet economic
activity more difficult
The Record
The Soviets have always been stingy with certain
kinds of economic data, although the aggregate vol-
ume was increased enormously in the late 1950s and
early 1960s. Since 1967, however, Moscow has re-
duced the flow of economic data available to the
West. This trend-which accelerated sharply in the
mid-1970s with the onset of an abrupt economic
slowdown-appears to reflect a decision to omit,
reclassify, or conceal data that the leadership believes
could violate national security or prove embarrassing
in this era of economic problems
The resulting erosion of useful published information
has been particularly evident in-though not limited
to-the Narkhoz. A tally of the number of tables in
the annual statistical handbook reveals a decline of
8'h percent between 1967-the year of the thickest
handbook-and 1975, and a further drop of 14 per-
cent between 1975 and 1982. Of particular signifi-
cance are the gaps in basic data on the fuels sector;
for example, the regional production of oil, gas, and
coal, and exploratory and developmental drilling ac-
tivities (see table 2). Figures on grain production have
been absent since 1981. There has been a sharp
reduction in regional statistics, such as data on agri-
culture and investment by economic region and ad-
ministrative region other than the federated republics,
perhaps to mask uneven territorial development. Fur-
thermore, much information essential to the analysis
of Soviet economic prospects in the years ahead is no
' For 1966 the Soviets published only a condensed (351-page)
version of the Narkhoz titled Strana sovetov za 50 letl
Table I
USSR: Pages in Annual Statistical Handbook,
Narodnoye khozyaystvo SSSR
a The number of pages in the Narkhoz has been steadily declining
since 1967 with the exception of the 1976 and 1981 editions. In
those two years, special volumes were published in commemoration
of the 60th anniversary of the revolution and the founding of the
USSR, respectively.
longer available, notably detailed books on the 1976-
80 and 1981-85 Five-Year Plans similar to the one
published on the 1971-75 Plan. No compendium of
the 1979 census results similar to those published for
the 1959 and 1970 censuses has yet appeared. Finally,
reduced reporting of economic statistics has been
accompanied by a reduction in information on how
statistics are derived. Methodological notes previously
included in annual editions of Narkhoz have been
absent since 1978.2
The continuing decline in the volume of useful statis-
tics is evident in the latest Narkhoz, published in the
fall of 1983, which contains data on economic per-
formance through 1982. For example, it omits consid-
erable previously published data on trucks-a durable
2 Although data and information excised from the Narkhoz gener-
ally are unavailable in complete form elsewhere, they are occasion-
ally published in specialized reviews or in the republic annuals,
suggesting that the Soviets are sometimes content to make it
harder, rather than impossible, to find at least a portion of the
missing material. Furthermore, although there is no indication that
the Soviets will publish a compendium of 1979 census results in the
near future, selected results have appeared in various publications
such as the Narkhoz and Vestnik Statistiki, the monthly publica-
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Table 2
USSR: Selected Types of Economic Data
Not Published Since 1976 a
National income: breakdown by use, 1981-85
Plan details (since 1980)
The disappearance of useful statistics extends to
foreign trade data. Moscow traditionally has not
Economic
aggregates
Soviet and US national income in dollars (since
1978)
Oil and gas: production by republic
Electric power: regional production within
RSFSR
Tractors: production by type
Finished rolled steel: regional production
Coal: production by major basin and type, labor
force and labor productivity, commissionings of
new capacity
Selected steel products (since 1979)
Trucks: procurement for agriculture, commission-
ings of new capacity (since 1982)
Agriculture Production: indicators by economic region, in-
cluding grain yields and livestock and their pro-
ductivity (since 1977)
Non-Black Soil Zone: basic indicators (since
1977)
Wheat, rye, and rice: procurement by republic
(since 1977)
Grain production (since 1981)
Foreign trade Coal and coke imports and exports: value and
volume
Crude oil, petroleum products, and synthetic liq-
uid fuel: volume of exports and a breakout of
trade by country
Natural gas: volume of imports and exports
Grain: volume of imports and exports
Selected chemical exports: quantities, rubber and
rubber asbestos goods, all trade
Pig iron, ferro-alloys, rolled ferrous metals, highly
processed rolled steel, and pipe: volume of trade
Nonferrous metals: all export data
Metal-cutting machine tools, presses, and forge
and press equipment: all value data
Employees by branch of industry: average annual
common to both civilian and military sectors-includ-
ing statistics on production, sales to agriculture, and
production capacity.'
published data on its external financial position-gold
reserves and sales, for example-but prior to 1976 it
released fairly complete information on commodity
trade. The Soviet foreign trade handbook Vneshnyaya
torgovlya SSSR for 1976, however, contained major
statistical lacunas which have widened in subsequent
issues. The biggest gaps are in commodity data on the
most sensitive industrial sectors-fuels, metals, and
chemicals. For example, the trade handbook pub-
lished in 1978 eliminated country-by-country figures
on the quantity of Soviet oil and gas exports, preserv-
ing only data on their value. The same edition cut out
a substantial amount of other significant data on
Soviet trade with individual countries. The share of
trade (in terms of value) not identified by product type
has also increased. For example, the proportion of
items not broken down in the structure of Soviet
exports by product rose from 15.6 percent in 1975 to
18.8 percent in 1981.
The Soviets have not responded to formal requests for
more economic data. Moscow's refusal to do so is
clearly inconsistent with commitments made at the
Helsinki, Belgrade, and Madrid Conferences on Euro-
pean Security and Cooperation. In fact, the Madrid
accord states that the signatory countries agree to
"ensure the regular publication and dissemination as
rapidly as possible of economic and commercial infor-
mation ... to intensify their efforts to improve the
comparability, comprehensiveness and clarity of their
economic and commercial statistics ... by striving to
' Although deletions have been the rule in recent years, new and
useful information appears from time to time in annual editions of
the Narkhoz. For example, the most recent edition gives informa-
Infant mortality rate tion on territorial production complexes (TPKs) including growth of
industrial production in TPKs and the share of TPK industrial
Life expectancy (since 1980) production in total production. According to a Soviet source, such
e Except where noted. data have been collected since 1978 but have not been published
Secret 38
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have their economic and trade statistics no less com-
prehensive than those previously published by the
State concerned." The Soviets apparently feel that
they have little to lose by withholding such data. The
requisite statistics reportedly are available internally
on a need-to-know basis to planning and management
Impact on Analysis
Deletions of data from the economic handbook have
made the process of measuring Soviet economic activ-
ity in the aggregate more difficult. For example, there
has been a sharp rise in the proportion of line items
that must be estimated in our index of Soviet industri-
al production. Furthermore, information from other
sources used in these estimates also has become more
fragmentary.
Omissions of trade information complicate Western
assessments of Soviet foreign trade activities and
trade policy. The foreign trade handbook is the
primary Soviet source for trade data. Although statis-
tics from Soviet trade partners can help to fill in gaps,
differences in reporting procedures and timing pre-
clude a close correlation with Soviet data. Moreover,
little timely information is available on Soviet trade
with the developing countries, an area of increasing
Foreign trade data are also used in analyzing domes-
tic economic activity. Lack of data on the volume of
exports and imports inhibits analysis of Soviet domes-
tic consumption of key commodities such as oil, steel,
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Briefs
Soviet Naval Response
to INF Deployments-
The US
Embassy In Moscow reports that, during informal French-Soviet consultations on
disarmament in late January, General Lebedev said that Soviet submarines had
moved closer to US shores as a response to INF deployments in Western Europe.
Lebedev is a General Staff officer and a former adviser to the Soviet INF
is does not increase the number of
missiles the USSR has targeted against the United States. Nonetheless, it does
help fulfill Moscow's threat to place the United States in an "analogous position"
by increasing the number of weapons available to attack with a shorter flight time
Further Deterioration Tehran's recently concluded trials of Communist (Tudeh) party members produced
in Soviet-Iranian intensified Soviet media criticism of reactionary elements in the Iranian leadership
-f6-hall
insurgents and Its continuation of the Iran-Iraq
war. TASS in mid-January condemned the Speaker of the Iranian Parliament for
his disparaging remarks about the USSR's role in Afghanistan and criticized Iran
for aiding Afghan insurgents. The commentary warned such "insults" could
damage relations, particularly commercial contacts. In late December, a Pravda
article claimed ongoing trials of Tudeh members on charges of spying for the
USSR were an effort to fan anti-Soviet hysteria. It suggested Iranian leaders
would bear the responsibility for the consequences if the trials continued. Tehran
radio also reported in mid-January that the Speaker of the Iranian Parliament
turned aside a formal proposal from the Supreme Soviet for cooperative efforts to
halt the arms race. He criticized Moscow's delivery of missiles to Iraq and their
Nevertheless, Moscow continues to avoid steps that could provoke a complete
break or encourage Iran to reduce its hostility toward the United States. Thus,
Moscow has largely avoided direct and public condemnations of Iran's recent
decision to imprison most and execute some of the Tudeh members tried in
December and January.
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Results of US-Soviet A Soviet official's remarks at the semiannual grain consultations with the United
Grain Meetings F___] States in London last month suggest that the USSR may keep its purchases of US
grain close to the minimum of 8-9 million tons required under the current
agreement. Deputy Minister of Foreign Trade Gordeyev, in responding to an offer
of up to 22 million tons of grain this year, said that the recent US actions against
Soviet exports of nickel, ferrosilicon, and vodka to the United States have to be
considered when deciding on where to purchase additional grain. He also indicated
that the USSR's large trade deficit with the United States would be an important
factor in such decisions.
Moscow may be using this opportunity to make it look as though the USSR is re-
sponding to the US restrictions on Soviet nickel, ferrosilicon, and vodka sales. The
Soviets have agreements with other countries this year to purchase a total of about
12 million tons of grain, however, and they probably do not need extra grain from
the United States. The relaxed atmosphere of the talks indicates that Moscow
wants to maintain a constructive dialogue with the United States on grain trade,
and the possibility of some purchases above the minimum was not ruled out.
More Soviet Media Since mid-December a series of articles in the Soviet press have portrayed
Coverage of conditions in Afghanistan as difficult but improving. An authoritative editorial in
Afghanistan Pravda on 2 January called the United States the principal obstacle to a political
settlement and reiterated major elements of the USSR's position on the outlook for
Afghanistan. Recent articles also have attacked China, Pakistan, the United
Kingdom, West Germany, Saudi Arabia, Egypt, and Iran for allegedly aiding the
resistance. Two articles in Red Star have described in detail the heroism of Soviet
personnel in defending against two separate insurgent attacks on a convoy and an
airfield. They revealed in passing that the USSR has suffered seven more
casualties
The increased coverage is an annual event designed in part to counter the
increased attention the Western press pays to Afghanistan on the anniversary of
the invasion. In addition, Soviet journalists periodically claim that they are under
pressure from the public, particularly families of men serving in Afghanistan, to
provide more information about the conditions faced by Soviet troops. A recent
Soviet radiobroadcast acknowledged receiving "many" letters asking why Soviet
soldiers are still in Afghanistan. The articles in Red Star illustrate the gradual ex-
pansion since 1981 of the practice of acknowledging intermittently the involvement
of Soviet troops in the fighting. These articles also suggest the leadership is under
pressure from elements of the military establishment to give more coverage to the
valor of Soviet soldiers. The revelation of seven additional casualties raises
Moscow's public tally of its losses in Afghanistan to 19-seven killed and 12
wounded. Current US estimates put Soviet casualties at about 17,000.
New Travel Restrictions In December 1983 the Soviets issued two documents and an accompanying map
in LeningradF__1 redefining the area in and around Leningrad open to travel by foreigners and
revising travel procedures for diplomats within the city. The new guidance
supersedes that provided in a 1973 Diplomatic Note detailing citywide travel
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Secret
Leningrad: Travel Restrictions on Foreigners
elenogorsk
/'-,So lnech7
Area open
to private boats
of consular corps-)
daytime only /
(3-kilometer limit)
Shalash
V.I. Lenin
tsw y5e
5rc 0~hra
Pargolo to
Gulf Lakhtinskiy
of
Finland
Petrodovorets
r,StaZTPetergof
Oki
tallies
Liagolovo
V.
Skachki
'ikkolovo
I k/
Area closed to travel, 1978
Area recently closed to travel
Open recreation zone
Road designated open to travel
^-,-3o Route designated open to travel
with permission
--- City limits
^ Railroad station
A State farm (sovkhoz)
Note: Water bodies closed unless
otherwise noted.
Source: Ministry of Foreign Affairs of the USSR Diplomatic
Note No. 219 dated 12 December 1983
and accompanying map.
Kilometers
-RI
FinlA'nd
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Soviets Threaten To
Limit Palladium Exports
to the United State
military installations, has essentially been closed to US attaches for years.
between Pushkin and Krasnoye Selo. This area, which encompasses several
Although the new directives designate as open some areas that were previously
thought to be closed, additional restrictions delineated in them have resulted in a
net loss of 171 square kilometers-or about 10 percent-of the 1,780 square
kilometers in the Leningrad area designated as officially open as of 1978. Nearly
three-fourths of the newly restricted area is on the southern edge of the city,
metropolitan area has been issued.
procedures and a 1978 Note covering countrywide travel restrictions, in which the
outer boundary of the city's "open area" was generalized. This is the first time,
however, that a large-scale schematic map depicting restrictions within the
supplies of palladium tot the
United States would be significantly reduced in . Palladium is an important
About 90 percent of US consumption comes from external supp iers.
strategic metal with applications in the electronics, chemical, automotive, an
petroleum industries. The USSR produces roughly 70 percent of the world's
output, and last year it directly supplied more than 30 percent of US imports.
1
approach in commercial relations with the United States
A high-level Soviet official recently hinted at a connection between palladium
sales and the state of East-West relations. He noted that the sales restriction has
been targeted generally against Western customers. His remarks follow statements
by other Soviet officials that the USSR is prepared to adopt a more obstructionist
supply contracts to monthly contracts.
The USSR probably is threatening to reduce palladium exports to raise the metal's
market price, which has nearly tripled since the Soviets threatened similar
reductions in late 1982. These threats were never carried out. As part of its
strategy to raise earnings, the USSR has already shifted away from long-term
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Secret
Secret
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