ARE THE SOVIETS SHIFTING RESOURCES FROM MILITARY TO CIVILIAN PRODUCTION?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86M00886R001000020023-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 5
• Document Creation Date: December 21, 2016
• Document Release Date: February 20, 2009
• Sequence Number: 23
• Publication Date: April 9, 1984
• Content Type: MEMO

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The Director of Central Intelligence
Washington, D.C. 20505
9 April 1984
National Intelligence Council
MEMORANDUM FOR: Director of Central Intelligence
FROM: Herbert E. Meyer
Vice Chairman, National Intelligence Council
SUBJECT: Are the Soviets Shifting Resources from
Military to Civilian Production?
1. In this draft paper, DIA analyst makes extensive use of
intelligence reporting to argue that since--T9-80- the Soviets have been shifting
resources from the military ivilian sector as part of a carefully
planned, long-term program. tie argument runs like this:
-- By late 1980 the Soviets had begun to appreciate the extent of their
economic problem. Several successive poor harvests, combined with
plummeting productivity, had worked to lower living standards and
raise the level of civil unrest.)
-- Precisely at this low point for Soviet agriculture and for that
country's consumers, the U.S. embargoed trade following the Soviet
invasion of Afghanistan. Subsequent to the convergence of these
events the Politburo, concerned over its agricultural vulnerability
and over enormous hard currency outflows for food, implemented an
Agroindustrial Food Program designed to achieve agricultural self-
sufficiency by 1990. The second U.S. trade embargo of December 1982
over the "Polish Crisis" served,to reinforce the Food Program
decision.
-- The Food Program, which depends heavily on a major retooling of
agricultural and food processing machine-building facilities, is
designed to draw support from industry's best sector, the military-
industrial sector. Since late 1980, this sector, including its R&D
facilities, has been repeatedly directed--in key speeches and other
forums--to provide such support and also to do more for non-food
consumer goods output. Intelligence has provided numerous instances25x1
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showing that the military-industrial sector has responded to the
directives and resolutions calling forfor support even at some cost in
materials and investment funds.
- Directly related to the Politburo's consumer oriented policies was the
decision to accord high, perhaps highest, priority in railroad cars
and service to the movement of agricultural commodities even at the
direct expense of the industrial sector. The inability to insulate
military suppliers and producers from the resultant bottlenecks was
one consequence of this decision. However, continued implementation
of the decision to give agricultural shippers rail priority in spite
of civil and military industrial disruptions serves as one measure of
the deep Politburo concern over the issue of ndards, unrest,
labor productivity and political stability.
-- The full impact of these policies on actual levels of Soviet military
production is yet to be determined. However, these developments have
occurred during the period in which estimates of Soviet weapons
procurement have shown little if any growth and at a time of
uncertainty over future procurement levels. Thus, it is essential to
look as closely as possible at the evidence indicating that economic
policies surrounding domestic programs are responsible for these
trends. Indeed, economic policy decisions may have more bearing on
the military procurement and total military expenditure trends than
the reasons considered to date; concurrent procurement cycles,
technology delays and industrial bottlenecks. These factors may be
only the symptoms of significant changes that are occurring in Soviet
resource-allocation policies.
2. It is against this backgrounds ~ that we should view
Brezhnev's October 1982 speech to the top 500 military commanders. In that
speech, which proved to be Brezhnev's last and which was attended by all key
Politburo members, Brezhnev acknowledged the tense world situation and the
renewed U.S. emphasis on defense. He then stated that a country's policy "is
only effective when it relies on the real economic and military strengths of a
state." You will recall that Western analysts were quite baffled by this
speech. If =_ is correct, its meaning and importance become clear: an
important sOtt from military to civilian production was well under way, and
the leadership was telling the generals that the policy was a lona-ta m one to
which they must accommodate themselves and their institutions.
3. ~appened on to all this as a result of an earlier piece he
wrote--and which DIA has not yet published either--that summarizes the
extraordinary measures taken in Moscow to distribute imported grain. These
measures included periodic, total shut-downs of the rail system to all
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industrial users--a tactic that crippl well as civilian
production.- (It is in this report tha V_~the,600-k back-up
of rail cars on the Soviet side of the Iranian border.)
4. I thesis is valid, the intelligence community has missed
something of the utmost importance. Since relies so extensively on
, t~
ommunity should be charged
intelligence reporting, analysts throughou
with either explaining why they reject the______ conclusions, or accepting
these conclusions and dealing with their implications
Herbert E. ever
Attachment:
Draft paper by
Distribution:
Copy 1 - DCI
2 - DDCI
(I)- Executive Registry
4 - DDI
5 - DDI Registry (w/o att)
6 - VC/NIC Chrono
TOP SECRET
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