SOVIET AZERBAIJAN: "YOUTH BULGE" SETS STAGE FOR UNREST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T01451R000400510001-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 22
• Document Creation Date: December 27, 2016
• Document Release Date: December 19, 2012
• Sequence Number: 1
• Publication Date: July 1, 1988
• Content Type: REPORT

Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Directorate of
Intelligence 25X1
L
Soviet Azerbaijan:
"Youth Bulge" Sets Stage
for Unrest
An Intelligence Assessment
007,SS516
SOV*10053*88
SOVA'01356.*88
FILE CCPYYSOURCED COPY
IcpAS/IMC/CONTRCL BRANCH
[ROOM 7G07
+HQS (NC ADHUC REQUIREMENTS)
+I A-21 A-1: OS WR
-MTN' entiaL
SOV 88-10053
July 1988
Copy 4 1 5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
e "
Intelligence kunnuenutu
.
25X1
Soviet Azerbaijan:
"Youth Bulge" Sets Stage
for Unrest
An Intelligence Assessment
25X1
This paper was prepared by Office 25X1
of Soviet Analysis. Comments and queries are
welcome and may be directed to the Chief,
Economic Performance Division, SOVA, 25X1
25X1
Reverse Blank
Confidential
SOV 88-10053
July 1988
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
25X11
Scope Note
Reverse Blank
Soviet Azerbaijan:
"Youth Bul e" Sets Stage
for Unrest
25X1
This Intelligence Assessment examines the role of rapid growth of the 25X1
young adult population in creating conditions conducive to social instability
in Azerbaijan.
111
Confidential
soV 88-10053
July 1988
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part - Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Key Judgments
Information available
as of 1 July 1988
was used in this report.
Reverse Blank
Soviet Azerbaijan:
"Youth Bul e" Sets Stage
for Unrest
Rapid growth of Azerbaijan's young adult population has outstripped the
republic's ability to provide jobs, housing, and educational opportunities.
According to Soviet estimates, more than 250,000 people in Azerbaijan do
not have jobs in the public sector?they are unemployed or make their
living in the private sector. The housing shortage is critical, and many
young people who migrate to cities to find jobs end up in squalid
shantytowns that have sprung up around urban centers. Access to higher
education has also narrowed considerably over the last 15 years, limiting
job opportunities and social mobility. As a result, competition for economic
opportunities has increased, exacerbating tensions between the republic's
principal ethnic groups, the Azeris and the Armenians.
These conditions helped fuel the unrest in Azerbaijan and Armenia that
was sparked by the demand that the Nagorno-Karabakh Autonomous
Oblast?which has a predominantly Armenian population?be taken from
Azerbaijani jurisdiction and reunited with Armenia. The demonstrations
quickly spread from Nagorno-Karabakh to Armenia and spilled over into
Sumgait, Baku, and other areas of Azerbaijan, creating the most violent
and protracted unrest since Stalin's death. Moscow responded to this
unrest, in part, by granting additional funds for housing to Sumgait, and
by calling on Azerbaijan to sharply increase funding for housing, jobs, and
recreation in Nagorno-Karabakh.
Moscow confronts unattractive options for coping with pressures of the
"youth bulge" not only in Azerbaijan, but also in the rest of the Caucasus,
southern Kazakhstan, and Central Asia. Sustained growth of state invest-
ment for schools and jobs would mean diverting funds from important
projects elsewhere in the country. The regime gives no indication of
following such a strategy, and indeed has espoused the view that these
regions should pull their own weight. Finally, efforts to force outmigration
could worsen ethnic tensions in the south and bring ethnic conflicts into the
industrial cities of the north.
25X1
25X1
25X1
25X1
25X1
Moreover, Gorbachev's perestroyka policies, stressing efficiency and gains
in labor productivity, may magnify the effects of the youth bulge by
eliminating jobs. These measures were aimed at the industrialized regions
of the country?not areas such as Azerbaijan where labor is abundant,
capital is relatively scarce, and skill levels are low. Layoffs in the southern
republics would heighten potential for ethnic unrest over the next five
years, at a time when continued outbreaks of violence would give ammuni-
tion to opponents of perestroyka. 25X1
Confidential
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
Contents
Page
Scope Note111
Key Judgments
The "Youth Bulge" Strains Azerbaijan's Economy
1 .
Jobs
1
Housing
3
Education
3
Rising Competition for Economic Opportunity Sparks Disputes
4
Hostilities Rise to the Surface
5
Moscow's Shortsighted Approach
5
Putting Out Brushfires . . .
5
. . . While Dodging the Basic Issues
6
Altering Perestroyka?
6
Outlook
6
Appendix
Regional Differences in Living Standards
9
vii
Confidential
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
Georgian S.S.R.
Kirovabad.
Armenian S.S.R.
R.S.F.S.R.
Soviet Union
Azerbaijan
S.S.R.
1-(
?Nagorno-Karabakhskaya
C. Autonomous Oblast'
Stepanakert
I? p-
t/
lac
? um t
BAK
Nakhichevan'
A.S.S.R.
50
50 Miles'
ea of
main ma
Confidential viii
Soviet Union
%Bin.
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
t-onnoemmi
25X1
Soviet Azerbaijan:
"Youth Bulge" Sets Stage
for Unrest
The "Youth Bulge" Strains Azerbaijan's Economy
Research done by the CIA shows that the emergence
of a "youth bulge" (20 percent or more of the
population in the 15- to 24-year-old age group) often
contributes to social instability in developing coun-
tries.' Increased competition for opportunities in edu-
cation, employment, and housing results in frustration
and discontent among the young, frequently translat-
ing into unrest. For example, insurgencies in Sri
Lanka and the Philippines coincided with youth
bulges.
Azerbaijan has been experiencing a youth bulge for
more than a decade (see figure 1). By contrast,
population in the entire Soviet Union has an age
structure similar to that of most developed countries,
reflecting lower birthrates in the non-Muslim areas of
the USSR.
Although population growth in Azerbaijan has slowed
in recent years, those born in the period of the highest
birthrates, the 1960s, are reaching adulthood, strain-
ing the republic's economy. Growth of the young
adult population of Azerbaijan has outstripped the
state's ability to provide jobs, housing, and education-
al opportunities. Population pressures are particularly
acute in major cities (see inset). Problems related to
the youth bulge received prominent play in the repub-
lic press even before the recent outbreak of unrest.
Jobs
Azerbaijan has not been able to provide new jobs fast
enough to employ its growing young adult population.
In the period 1970-85, growth of the republic's able-
bodied population outstripped growth in socialized
employment by a wide margin (see figure 2). At a
republic plenum in January, the party leadership
recognized the issue of employing young people as one
of Azerbaijan's "most pressing social problems."
1
Figure 1
Youth Cohorts, Ages 15-24
Percentage of the population
26
12
I I Ii Ii I I
Azerbaijan
USSR
Korea
United States
10 1970 75 80 85 90 95 2000 2005
317932 7-88
In Azerbaijan more than 250,000 people do not have
jobs in the public sector,3 according to a 1987 Soviet
estimate. This represents 6.3 percent of the able-
bodied population of Azerbaijan. Although many are
women with young children, a growing number of
young men are reportedly joining the ranks of those
'The public sector includes industry, construction, transport, com-
munications, services, and socialized agriculture. The private sector
consists of individual and cooperative activities in the areas of
agriculture, construction, and consumer services.
Confidential
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
25X1
25X1
ogvi
25X1
25X1
,25X1
LA I
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
Sumgait: A City Overwhelmed by Population Growth
Population pressures have led to overcrowding, trans-
portation problems, and severe pollution in cities
such as Sumgait, an industrial center near Baku with
a population of 234,000. A report on the January
1988 plenum of the Sumgait City Council cited a
number of alarming trends:
Figure 2
USSR: Growth of Working-Age Population
and Employment, 1970-85.
Percent increase
Working-age Average annual
population employment in
public sector
80
? By 1986 the population of Sumgait exceeded pro-
70
jections by more than 40 percent.
60
? In 1970, for every 10,000 residents, there were 110
hospital beds. Today that number has declined to 50
85. This is 13 lower than the republic average and
45 lower than the all-union standard. 40
30
? There are not enough schools in the city?only 33
percent of children are admitted to preschools 20
compared with a national norm of 85 percent. As a
result, more than' 20,000 women with children, or 8 10
percent of the population, are not employed.
0
USSR Azerbaijan Armenia b Central
? From 1976 to 1986 growth in per capita living space Asia c
in Sumgait was only one-third the average for O Men, ages 16-59, and women, ages 16-54.
b 1970-84.
Azerbaijan as a whole. c Uzbekistan, Turkmenistan,
Tajikistan, and Kirgiziya.
Source: Bakinskiy rabochiy, 20 January 1988
who are unemployed or make a living in the private
sector. According to a Soviet correspondent, "we are
talking of thousands of young people left virtually
without work."
Desirable jobs are hard to find in the rural and
mountainous regions of Azerbaijan. Moreover, in
recent years the antialcohol campaign has exacerbat-
ed the employment problem as local vineyards have
switched from the labor-intensive business of wine-
making to the cultivation of table grapes, which
requires fewer workers. In January 1988 the republic
council of ministers censured local governments of the
Nagorno-Karabakh Autonomous Oblast and sur-
rounding areas and the Nakhichevan' Autonomous
Republic for failure to employ the "significant
Confidential
317933 7-88
number" of jobless in the public sector or to attract
them to state-sanctioned forms of private activity such
as cooperatives. Particularly sharp criticism was
aimed at their failure to combat the growth of illegal
private activity?"unearned income," speculation,
and theft?that has accompanied the rise in unem-
ployment.
A lack of desirable jobs in mountainous areas has
prompted migration into the major cities of Azerbai-
jan. Young men, in particular, are lured by the
relatively high-paying jobs in the petroleum industry,
centered in Baku and Sumgait. According to the
Soviet press, up to 10,000 people move into Baku each
2
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
year. Many, however, end up in low-skill jobs that city
residents will not take, while others drift into the
private sector?where high incomes are possible?and
"fill the streets, markets, and stations with stalls."
Housing
Azerbaijan's major cities suffer from severe housing
shortages. Because of the surplus of available labor,
enterprises do not need to provide decent housing to
attract workers. Managers can bring workers into
cities on temporary residence permits and leave them
to find accommodations as best they can. This prac-
tice is sharply criticized in the Soviet press. According
to one correspondent, writing after the Sumgait dis-
turbances, "giant plants are belching smoke, calling
young people from all over the Republic to come and
work there. But how will they live there? This ques-
tion didn't worry the heads of enterprises and far-off
ministries in Moscow."
Housing shortages have led to the emergence of
shantytowns in the cities. According to a Soviet
correspondent in Baku, "crowds of recruited workers
have surged into the city, and the outskirts and waste
land have been filled with homemade shacks that
have grown up overnight. . . . According to Soviet
data, approximately 200,000 people live in these huts,
which an authoritative commission has classed as
unfit for habitation." The Soviet press reveals a
similar situation in Sumgait, where young people
often spend years in the city's filthy, rundown youth
hostels only to marry and move into "depressingly
squalid shantytown areas?temporary housing impro-
vised from scraps of sheet metal, wooden panels, and
rusty wire netting." An estimated 10,000 to 18,000
people live in these settlements, which are without
water, sanitation, and fuel. According to Moscow
News, most of those involved in recent violence in
Sumgait came from the shantytowns.
Moreover, building new apartments has not always
proved a solution to the housing shortage, because
apartments are usually sited on the outskirts of cities,
far from jobs, services, and cultural facilities. Accord-
ing to a local newspaper, residents of Baku's new
apartments are "in effect shut up between four walls:
movies, concerts, plays, walks in the park are a thing
of the past." One new housing development had so
3
many shortcomings that some people refused to move
in, preferring to stay on waiting lists for units in the
city center. Alarmed that hundreds of new apart-
ments sat empty, Baku officials "took extreme mea-
sures," condemning apartments in the center of the
city, evicting residents, and ordering them to move
into the new development. According to the paper,
"representatives of the court threw their things out
into the street. The residents?contemptuous of pa-
pers and verdicts?dragged them back in."
Education
Access to higher educational institutions (VUZs) has
narrowed considerably as the student-age population
of Azerbaijan has grown. Between 1970 and 1985, the
share of secondary school graduates going on to
higher education in the republic declined from 22.8
percent to 12.6 percent (see figure 3). Some students
from Azerbaijan are admitted to VUZs in other
republics, but the number is small, only about 1,500 a
year. 25X11
25X1
25X1
25X1
Moreover, because of mistakes in educational plan-
ning, many of those who do gain entry into VUZs will
not find jobs in their field of study when they
graduate. Thousands of VUZ graduates?mainly in
the humanities?are out of work or underemployed.
Even students sent to VUZs in other republics some-
times return to Azerbaijan after graduation to find
that sponsoring ministries will not deliver promised
jobs and housing. At the same time, enterprises
frequently report difficulty filling vacancies for skilled
jobs because the schools have trained too few people
to meet the demand in key technical specialties.
Last year a Soviet newspaper highlighted some of the
problems generated by the inappropriate mix of grad-
uates, noting "in Baku alone approximately 8,000
teachers are not employed in teaching, and 3,600 of 25X1
them are not working at all . . . 1,500 cultural special-
ists and hundreds of doctors are registered as seeking
employment. . . . More than one-third of technical
college graduates and one-fifth of all VUZ graduates
are employed outside their own specialty. Many do
not work at all." As a result of such problems, the
25X1
Confidential
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
uonnaennal
Figure 3
USSR: Daytime Secondary Students Admitted
to Higher Educational Institutions
Percent
I
USSR
Azerbaijan
50
1965
70
75
80
85
317934 7-88
decision has been made to cut by 4,000 admissions to
secondary specialized and higher educational institu-
tions in the republic?a move that will further limit
access to higher education.
Rising Competition for Economic Opportunity
Sparks Disputes
Increasing competition for economic opportunities is
breeding resentment between the two dominant ethnic
groups?Azeris and Armenians?who perceive dis-
crimination in the allocation of jobs, housing, and
Confidential
access to higher education. The regional papers are
full of complaints of unfairness, nepotism, and
"clanishness":
? Jobs. Allocation of jobs surfaced as an issue in
recent ethnic disturbances. One Soviet official ad-
mitted that the best jobs in the predominantly
Armenian Nagorno-Karabakh Autonomous Oblast
are reserved for Azeris. And a press report recently
complained that in Azerbaijan young people educat-
ed in Yerevan (Armenia), rather than Baku, have a
hard time finding jobs.
? Housing. With 10- to 15-year waiting lists for
housing, disputes over the allocation of apartments
are bitter. According to a press report, "families
who should be put into housing first get their homes
last. Such circumstances generate the justifiable
criticism of the people. . . [and] give rise to a flood
of claims to the republic and central organs."
Education. Last year charges of unfair admissions
practices in Azerbaijan's VUZs led to the appoint-
ment of new commissions to handle the admission
process. In the most celebrated case, Azerbaijan's
Institute of the National Economy was shut down
for "serious infractions of the rules for admis-
sions . . . lack of objectivity in the conduct of en-
trance exams,. . . violating pedagogical ethics and
labor discipline, nepotism, and other abuses." 4
Regional differences in living standards also generate
charges of ethnic discrimination. Armenians living in
Nagorno-Karabakh claim that living standards are
lower in that oblast than in the rest of the republic.'
The resentment of the Armenian residents of Nagor-
no-Karabakh further increases when they compare
their level of living with that of relatives in Armenia,
where living standards are higher than in Azerbaijan
(see appendix).
'The institute later reopened as a branch of the Leningrad
Financial-Economic Institute.
This is, in part, due to the structure of employment. In Nagorno-
Karabakh, the dominant economic activities are light industry and
agriculture, relatively low-paying sectors. Higher paying industrial
jobs, particularly in the petroleum industry, are centered around
Baku and Sumgait
4
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
25X1
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
The Armenian residents of Nagorno-Karabakh, along
with some other Soviet observers, charge that there is
economic discrimination against Nagorno-Karabakh
by Azerbaijan authorities. They complain that local
industry is underdeveloped, roads are neglected, and
cultural facilities are almost nonexistent in the region.
The level of per capita investment in Nagorno-Kara-
bakh is the lowest of any oblast in Azerbaijan.
According to a Soviet correspondent, "only 1 percent
of the budget of Azerbaijan was allocated for the
development of the economy of the region," even
though "Karabakh constitutes 5 percent of the area of
Azerbaijan and not quite 3 percent of the Azeri
population."
Hostilities Rise to the Surface
The youth bulge created conditions in Azerbaijan
conducive to social instability?overcrowding in the
cities, frustrated expectations among the young, un-
employment, and growing resentment between ethnic
groups. Moreover, discrimination against Armenians
by Azerbaijan Republic authorities has exacerbated
the effects of the youth bulge. Last year one Soviet
commentator predicted trouble. He called Baku "a
breeding ground for crime" and warned that work
would have to be quickly found for unemployed young
people to "avert tragedies."
Government repression of dissent helped keep the lid
on potential unrest as the youth bulge peaked in the
early 1980s. With the advent of Gorbachev's policy of
glasnost, however, young people began to give vent to
long-simmering grievances. In early 1988 ethnic ten-
sions erupted into demonstrations, strikes, and vio-
lence, sparked by the demand that the Nagorno-
Karabakh Autonomous Oblast be taken from
Azerbaijani jurisdiction and reunited with Armenia.
The demonstrations quickly spread from Nagorno-
Karabakh to Armenia and spilled over into Sumgait,
Baku, and other areas of Azerbaijan, creating the
most violent and rotracted unrest since Stalin's
death.
Reports from the region have noted the youth of the
demonstrators. Participants in demonstrations by ap-
proximately 10,000 Azeris in Baku were described by
5
American tourists as mainly "college aged." Accord-
ing to the Soviet prosecutors, "pogroms" against
Armenians in Sumgait were carried out by youths
with an average age of 20. A Moscow television report
confirmed the role of the youth bulge in the violence
in Sumgait:
Our city was a young one which needed young
people. A large number of people . . . came back
here after completing their army service. A
certain disproportion arose in the growth of the
number of inhabitants and the amount of hous-
ing it was necessary to provide. . . . So there
were social tensions in the city which were
separate from the nationality factor, and they
still remain very serious.
Moscow's Shortsighted Approach
25X1
25X1
Putting Out Brushfires
When ethnic tensions erupt into violence, Moscow's
standard response is to "put out the brushfire" with a
quick infusion of investment to the affected area.
Moscow is now attempting to direct more resources to
Nagorno-Karabakh for projects that would benefit
the young population. A party and state resolution of
24 March 1988 calls for a 40-percent increase in the
construction of housing in the 13th Five-Year Plan 25X1
(1991-95), as well as increases in the construction of
recreational facilities and schools in the autonomous
oblast. The resolution also instructs ministries to draw
up plans for a number of large construction projects in
the region?including reservoirs, roads, and water and
gas pipelines?which should employ thousands of
people. Most of these projects are scheduled for
completion in 1991-95. According to a Soviet observ-
er, "the main goal is to make Armenians. . . feel
themselves full-fledged citizens, having equal oppor-
tunities in terms of education and welfare." Although
Moscow will provide some of this financial backing, it
is likely that Azerbaijan will be called on to divert
more of its already scarce investment funds to
Nagorno-Karabakh. 25X1
Confidential
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
According to Moscow News, additional funds were
also made available to Sumgait. The city received five
times its normal allotment for social needs in the
second quarter of this year. Moreover, officials have
decided to move the shantytowns and in their place
grant families land and loans to build decent homes.
The Soviets estimate that the city will have to build
housing at twice the normal rate this year to cope with
the housing crisis
... While Dodging the Basic Issues
Recent decisions notwithstanding, rather than invest
heavily in creating jobs in southern-tier republics,
Moscow has limped along with a 15-year-old policy of
attempting to manage rapid labor force growth on the
cheap by encouraging ministries to site small-scale,
labor-intensive shops and subsidiaries in towns and
small cities near rural areas. This is meant to bring
jobs into areas with the greatest labor surplus and
reduce migration to overburdened big cities.
This strategy has largely failed, in part because
industry attempts to operate in the same way in the
south as it does in the labor-deficit regions of the
north. Soviet economists complain that ministries are
biased toward capital-intensive projects that are inap-
propriate for republics with a shortage of skilled labor
and an overabundance of unskilled workers. More-
over, enterprises are reluctant to build facilities in the
rural areas because they need skilled workers, who are
found in the cities. The small subsidiary shops that
are constructed in rural towns tend to pay low wages
and provide little to their employees in terms of
housing and services. Often local people shun these
jobs in favor of private-sector activity. The failure to
establish labor-intensive industries such as textiles in
the south is reflected in the fact that, for example,
only 8 percent of the cotton produced in Uzbekistan is
processed in the republic; most of the spinning, weav-
ing, knitting, and sewing is still done in the labor-
deficit republics of the north.
Moscow, moreover, is not planning any significant
increase in state investments to bolster the economy
and create more jobs in areas that are experiencing a
youth bulge?the Caucasus, southern Kazakhstan,
and Central Asia. On the contrary, the regime has
recently espoused the view that these regions should
Confidential
pull their own weight. Gorbachev blames many of the
problems of labor-surplus republics on the corruption
and mismanagement of local leaders. Republic lead-
ers are now instructed to raise labor productivity,
make more efficient use of their existing resources,
and rely less on subsidies from Moscow.
Altering Perestroyka?
A key objective of Gorbachev's economic reforms is to
curtail overmanning?apparently even in labor-sur-
plus regions. Indeed, in 1987 thousands of workers in
the Baku area were reportedly laid off in transporta-
tion and in the oil industry, perhaps contributing to
the subsequent unrest. Tatyana Zaslavskaya, speak-
ing in support of such measures last year at a
conference in Baku, asserted "it is impossible for each
enterprise to continue to retain surplus people purely
to 'solve' social problems. We will never achieve high
labor productivity growth rates by doing that."
It makes little sense, however, to focus on creating
high labor productivity jobs in areas of labor surplus.
One Soviet commentator took up this point early this
year. Describing the Kabardino-Balkar Autonomous
Republic, a region of the RSFSR located in the
northern Caucasus, he reported that more than
30,000 people were out of work there in 1985 and
another 14,000 to 15,000 might be displaced as a
result of perestroyka.6 Although the author acknowl-
edges that many of these will find other jobs, perhaps
in the same factory, he warns that "discrepancies"
will remain and will aggravate the employment situa-
tion. He argues, "perhaps, while generally intensify-
ing the national economy, it would be possible and
even necessary to allow elements of extensive develop-
ment in a number of regions in order to increase
employment."
Outlook
Youth bulges in the southern republics will continue
to plague Moscow for at least three to five years.
Although population growth in both Azerbaijan and
'The total population of the Kabardino-Balkar AR in 1983 was
708,000.
6
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
25X1
,
25X1
25X1
25X1
25X1
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
Could It Happen in Central Asia?
Central Asia's social infrastructure is even less devel-
oped than that of Azerbaijan, its population is less
educated, per capita investment is lower, and the
growth of its young adult population more rapid.
This suggests that tensions and the potential for
ethnic conflict could increase in that region as well.
In the past a number of factors have mitigated
problems related to the youth bulge and decreased
the potential for unrest in Central Asia:
? The local Slavic population clusters in the cities,
while Asians tend to stay in the countryside. This
reduces the competition between nationality groups
for housing.
? Competition for jobs is reduced by an ethnic divi-
sion of labor. Asians generally choose jobs in trade
and agriculture?activities that give them easier
access to the lucrative second economy, while the
European settlers seek jobs in industry.
? Finally, an active policy of reverse discrimination in
Central Asia assured that members of the indige-
nous nationalities would occupy a substantial share
of leadership positions in VUZs, local government,
and industry.
The balance that has been established could poten-
tially be upset over the near term by Gorbachev's
policies and in the longer term by increased rural-
urban migration. Gorbachev's initiatives have already
produced layoffs, an end to reverse discrimination,
and a crackdown on corruption in local governments.
Moreover, population pressures in the countryside?
shortages of water and arable land?may eventually
generate increased movement to the cities, heighten-
ing interethnic competition for jobs, housing, and
other opportunities. At that point, the potential for
unrest would greatly increase. LI measures are not
taken to significantly bolster the economy of the
cities, social problems could be generated by even a
modest acceleration in the rate of rural-urban migra-
tion.
Reverse Blank
7
Central Asia will remain high relative to the rest of
the Soviet Union, the share of the population in the
15- to 24-year-old age group will dip in the 1990s.
After the year 2000, another youth bulge will begin to
emerge.
25X1
Ongoing disturbances in the Caucasus and continuing
population pressures in Central Asia may lead Mos-
cow to adjust or rethink its policies in the southern
tier (see inset). The regime's options, however, are not 25X1
attractive. Easing up on the labor-saving aspects of
perestroyka in the southern tier makes sense, but it is
not clear if the Soviet campaign style of implementing
policies across the board can accommodate such
flexibility. Increasing investment in that region would
mean diverting funds from important projects else-
where in the country. Efforts to force outmigration
could worsen ethnic tensions within the southern tier
and bring ethnic conflicts into the cities of the
industrialized regions of the north. Finally, allowing
the private sector to soak up even more excess labor
could produce results that would be unpalatable to
Moscow, including greater income inequalities, and
an increase in illegal diversion of state resources to
private activity. Moreover, this would put more of the
region's economy beyond state control. 25X1
Youth bulges in the south represent a serious chal-
lenge for Gorbachev as he attempts to implement
perestroyka. His economic policies were aimed at the
industrialized regions of the country, where labor? 25X1
relative to the south?is scarce and well educated.
Measures that encourage the substitution of capital
for labor and elimination of low-skill jobs are ill suited
to regions where labor is abundant, capital is relative-
ly scarce, and skill levels are low. If firms and
entrepreneurs are not given flexibility to adapt pro-
duction processes and wages to local conditions, peres-
troyka may magnify the effects of the youth bulge by
eliminating jobs. This would heighten the potential for
more ethnic unrest and provide ammunition to oppo-
nents of reform. 25X1
Confidential
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
Appendix
Regional Differences in
Living Standards
In part because of rapid population growth, Azerbai-
jan and other labor-surplus republics rank at the
bottom of the scale among Soviet republics in terms of
wages, expenditures for social welfare, and housing
(see figures 4-7). Baku, Azerbaijan's capital and the
fifth-largest city in the Soviet Union, also compares
poorly with the other major cities of the USSR (see
table on page 14).
9
Confidential
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
Figure 4
USSR: Average Monthly Earnings
1965
Current rubles
0 50
100
150
200
250
rurkmenistan
Estonia
RSFSR
Kazakhstan
USSR
rajikistan
'Jatvia
Ukraine
krmenia
kzerbaijan
Kirgiziya
Jthuania
Jzbekistan
3eorgia
Vloldavia
3elorussia
1986
Estonia
RSFSR
Latvia
USSR
Lithuania
Turkmenistan
Kazakhstan
Armenia
Belorussia
Ukraine
Georgia
Kirgiziya
Uzbekistan
Tajikistan
Moldavia
Azerbaijan
Current rubles
0 50
100
150
200 250
Confidential
1980
Estonia
RSFSR
Turkmenistan
Latvia
USSR
Kazakhstan
Lithuania
Armenia
Uzbekistan
Ukraine
Belorussia
Azerbaijan
Kirgiziya
Tajikistan
Georgia
Moldavia
Current rubles
0 50
100
150
200 250
10
317935 7-88
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Confidential
Figure 5
USSR: Per Capita Expenditures for Social Welfare'
1965
Current rubles
0 100 200
300 400 500 600 700
Estonia
Latvia
RSFSR
USSR
Kazakhstan
Ukraine
Belorussia
Georgia
Turkmenistan
Kirgiziya
Azerbaijan
Uzbekistan
Tajikistan
?
?
1984
Current rubles
0 100 200
300 400
500 600 700
Estonia
Latvia
RSFSR
Lithuania
USSR
Belorussia
Ukraine
Kazakhstan
Moldavia
Georgia
Armenia
Kirgiziya
Turkmenistan
Uzbekistan
,
Azerbaijan
Tajikistan
a Includes expenditures for education, medical services, children's
preschools, rest homes, sanatoriums, communal housing, and a few other
types of cultural services.
1980
Current rubles
0 100 200 300 400 500 600 700
Estonia
Latvia
RSFSR
USSR
Lithuania
Belorussia
Ukraine
Kazakhstan
Moldavia
Georgia
Armenia
Kirgiziya
Turkmenistan
Uzbekistan
Azerbaijan
Tajikistan
- ?
11
Confidential
317936 7-88 25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Lontidential
Figure 6
USSR: Per Capita Housing Space
1980 Urban
Square meters of useful space
0 10 20 30
.11:223
Rural
40
50
Estonia
ii..
Latvia
Georgia
i
i
. . .1..
Lithuania
1
Ukraine
RSFSR
1
i
?
--
USSR
fa
--r--
1
Belorussia
Armenia
Moldavia
Kazakhstan
L
til'
Azerbaijan
Kirgiziya
l.iLI
Tajikistan
Turkmenistan
Uzbekistan
L-_ -_
ir
Confidential
1986
Urban
Square meters of useful space
10 20 30
IF=
Estonia
Latvia
Georgia
Lithuania
Ukraine
RSFSR
USSR
Belorussia
Armenia
Moldavia
Kazakhstan
Azerbaijan
Kirgiziya
Uzbekistan
Tajikistan
Turkmenistan
Rural
40
50
1-1
1-f-
1
lilillili
111
iiI
r
I
I
ii;
1li
1--1

1 _
1-
?
I-771
1?
r--
- -
-
1 -
12
317937 7-88
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part - Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Figure 7
a
USSR: Natural Population Growth
Increase per thousand
1965 1980
0
10 20 30 40 0 10 20 30 40
Latvia
Estonia
Ukraine
RSFSR
Lithuania
USSR
Belorussia
Moldavia
Georgia
Kazakhstan
Armenia
Kirgiziya
Uzbekistan
Azerbaijan
Turkmenistan
Tajikistan
1984
0
10
20
30
40
Latvia
Estonia
Ukraine
Lithuania
RSFSR
Belorussia
Georgia
USSR
Moldavia
Kazakhstan
Armenia
Azerbaijan
Kirgiziya
Turkmenistan
Uzbekistan
Tajikistan
a Excess of births over deaths
per one thousand of the population.
Latvia
Estonia
Ukraine
Lithuania
RSFSR 11.1
Belorussia
USSR
Georgia
Moldavia
Kazakhstan
Armenia
Azerbaijan
Kirgiziya
Turkmenistan
Uzbekistan
Tajikistan
13
Confidential
3179387-88
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
25X1
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Soviet Cities: Baku's Rapid Population Growth
Strains the Infrastructure
Top 10 Cities
by Population
Population
1 January 1986
(thousands)
Natural Pop.
Growth
per 1,000
Apartments Built per
1,000 Natural Pop.
Increase (1985)
Per Capita Retail
Trade Turnover
(1985)
Million Passenger's
Carried (bus, trolley,
metro)
Moscow
(1)
8714
(10)
1.7
(1)
3822
(1)
2612
(1)
3856.2
Leningrad
(2)
4904
(9)
2.3
(2)
2059
(2)
1661
(2)
2205.2
Kiev
(3)
2495
(4)
7.2
(7)
1311
(3)
1649
(3)
1111.8
Tashkent
(4)
2077
(1)
13.7
(9)
515
(7)
1254
(6)
371.2
Baku
(5)
1722
(2)
13.0
(10)
425
(10)
1078
(9)
244.2
Khar'kov
(6)
1567
(7)
3.9
(5)
1734
(5)
1395
(4)
703.6
Minsk
(7)
1510
(3)
12.1
(8)
848
(4)
1617
(5)
518.3
Novosibirsk
(8)
1405
(6)
5.0
(6)
1589
(8)
1194
(8)
245.3
Sverdlovsk
(9)
1315
(5)
5.9
(4)
1615
(6)
1358
(7)
324.2
Kuybyshev
(10)
1267
(8)
3.2
(3)
2050
(9)
1189
(10)
205.8
Source: Vestnik statistiki, 1986.
Confidential 14
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
Declassified in Part- Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5
connoentlai
Confidential
Declassified in Part - Sanitized Copy Approved for Release 2012/12/19: CIA-RDP89T01451R000400510001-5