THE ECONOMIC THINKING OF SOVIET MILITARY-INDUSTRIAL LEADERS: USTINOV AND RYABOV

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08S01350R000100120001-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 21, 2016
• Document Release Date: September 15, 2008
• Sequence Number: 1
• Publication Date: January 1, 1979
• Content Type: REPORT

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Top Secret
National
Foreign
Assessment
Center
The Economic Thinking of Soviet
Military-Industrial Leaders:
Ustinov and Ryabov
An Intelligence Assessment
Top Secret
RP 79-10005
January 1979
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National Top Secret
Foreign
Assessment
Center
The Economic Thinking of Soviet
Military-Industrial Leaders:
Ustinov and Ryabov
The author of this paper is I (USSR Di-
vision, Office of Regional and Political Analysis.
Comments and queries are welcome and should be
directed to
Top Secret
RP 79-I0005CX
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The Economic Thinking of Soviet
Military-Industrial Leaders:
Ustinov and Ryabov
The complexion of the leadership of the Soviet
"military-industrial complex" changed in 1976 when
Dmitriy Ustinov became Minister of Defense and
Yakov Ryabov succeeded him as party secretary for
defense industry. The leadership is now less institution-
ally ingrown and richer in experience and breadth of
interests.
Ustinov and Ryabov have both expressed views on
economic issues that could conflict with the narrow
near-term interests of the military and defense indus-
try establishments they now head. They have shown a
relatively high degree of concern and sophistication on
questions of efficiency and management and some
recognition of the need to meet welfare and consumer
needs. In addition, Ryabov has advanced a broad range
of ideas on economic development and management
that distinguish him from Ustinov.
In terms of both the nonmilitary aspects to their
careers and the breadth of their economic interests,
therefore, Ustinov represents an advance over Andrey
Grechko as Minister of Defense, and Ryabov an
advance over Ustinov as Party Secretary.
An effort on their part to get "more bang for a ruble"
would not necessarily detract from military strength,
but it presumably would entail ever more careful
calculation of military needs and costs.
The evidence, while insufficient to forecast what future
policy positions these leaders will take, does suggest
that they cannot be counted on to respond to economic-
military issues in a stereotyped, institutional manner.
Particularly in an economic squeeze, both leaders are
likely to recognize interests that go beyond immediate
military needs, including the requirements for general
economic growth and modernization, and may be more
sympathetic than their predecessors to needs for
economizing in their own sectors.
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Top Secret
The Economic Thinking of Soviet
Military-Industrial Leaders:
Ustinov and Ryabov
Economic constraints and national ambitions will face
the Soviet leadership with difficult choices in economic
and military policy in the years ahead. To remain
dynamic, the Soviet economy must master a more
complex stage of development while overcoming prob-
lems of scarcity and costs that make the old growth
strategy ineffective. The leadership must decide how
much effort to expend in trying to attain a competitive
position in the economic sphere that will match its
performance in military competition with the West.
Some leaders may even begin to question whether the
Soviet Union can maintain its present military, par-
ticularly its relative strategic strength, if it does not
make rapid progress in modernizing its economy.
Policymakers will continually face the dilemma of
whether to emphasize economic activity that most
directly contributes to military might in the near term,
or economic growth and modernization that will
provide a more reliable base for military strength in the
longer term.
With this policy dilemma in mind, this paper examines
the background and what is known of the economic
thinking of two representatives of the "military-
industrial complex" in the Soviet leadership-Minister
of Defense Ustinov and party secretary for defense
industry Ryabov. Both moved into their present
positions only two years ago. The 70-year-old Ustinov
sits on the Politburo and the Defense Council; the 50-
year-old Ryabov probably sits on the Council. While
these officials do not alone determine economic-
military policies, they certainly have much to do with
the presentation of the interests of the military and the
defense industry in leadership councils and how they
are related to other economic needs.
Another participant in this process is likely to be party
secretary for heavy industry Dolgikh. His sector, at
least in part, may be considered a component of the
"military-industrial complex." Although Dolgikh is
not new in his current post, he is, at 54, one of the
younger members of the leadership and shares the
views of some of the other more junior leaders,
including Ryabov. Dolgikh's views are discussed in the
annex to this paper.
The paper first summarizes the economic issues facing
the leadership during the 1980s. It then examines the
backgrounds and economic thinking of Ustinov and
Ryabov. Finally, some generalizations are advanced
concerning their possible approach to economic-
military issues in the future.
The long-term slide in Soviet economic growth rates
promises to continue. It is estimated that the growth of
GNP will average about 4 percent a year through 1980
and roughly 3 percent in 1981-85. This reflects in part
the decline in growth in the productivity of labor and
capital since the 1960s. It also reflects the fact that the 25X1
Soviet economic environment is changing from one
marked by a relative abundance of growth factors to
one characterized by a relative scarcity of growth
factors. Already in this five-year plan (1976-80), new
fixed investment is slated to rise at less than half the
rate of the last 15 years and below the rate of growth
planned for GNP. The cost of raw materials is
increasing; and in the case of crude oil serious
shortages are foreseen in the 1980s. Finally, a
slowdown in labor force growth that began in 1978 is
expected to drop to less than 0.5 percent by the mid-
These constraints mean that it will be both more
necessary and more difficult to balance military needs
and needs of the economy. It will become harder to
isolate development of the military and the defense
industry from development of other major sectors of
the economy. At the same time competition for the
country's resources will increase between economic
and social needs and'needs of the defense establish-
ment.
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Heavy industry will not be able to stand apart from the
competition, as witness the recent downturn in the
investment growth rate. The military's traditional first
call on advanced technology and top scientific, tech-
nical, and managerial talent will increasingly conflict
with the needs of an economy that must secure its
growth through productivity gains from the applica-
tion of intensive and qualitative factors. The require-
ment at this stage for a more sophisticated and
productive labor force adds urgency to improving
living conditions and increasing material incentives to
promote economic growth as well as to placate Soviet
consumers. The tightness of the labor supply will make
consumer demands all the more difficult to ignore, and
there are already signs of debate over allocations for
consumer goods production under the next five-year
plan.
As a consequence of changing conditions, Soviet
economic thinking is slowly shifting from a "more-
more" mentality to a recognition of the importance of
economizing and an understanding of the economic
constraints that now determine how progress can be
made. This could foster a more critical assessment of
the size and application of the resources now com-
manded by the military and the defense industry
This study assumes that Minister of Defense
D. F. Ustinov and party secretary for defense industry
Ya. P. Ryabov are committed to securing priority
treatment for the institutions over which they preside.
It also assumes that their experience in and comments
on economic affairs can offer some indication of how
they might act in a situation of growing economic
stringencies and competition between economic claim-
ants, when choices must be made between narrow or
broad, near-term or long-term goals and strategies.
This examination focuses on the background of the two
men, their particular interests, and their general
approaches to economic problems.
Ustinov is, first of all, an economic manager, albeit one
with great knowledge of and close ties to the military.
His long experience in supervising defense industries
stands in contrast to the professional military careers
of the ministers of defense who preceded him.
Between 1941 and 1957, Ustinov held a post compara-
ble to that of minister of defense industry today. He
was Deputy Premier for defense industries from 1957
to 1963. Then, as First Deputy Premier, he served for
two years as chairman of the USSR Supreme National
Economic Council (V.S.N.Kh.) before resuming su-
pervision of the defense industries, this time in the
Party Secretariat, in 1965. He became Minister of
Defense in April 1976 following the death of Marshal
Grechko.
Although he was in the specialized defense industry
field early in his career, Ustinov rose high enough on
the administrative ladder to become familiar with
differing pressures and broad economic issues. As
Deputy Premier after 1957, he was a member of the
Presidium of the Council of Ministers where broad
economic policy issues were dealt with.' Ustinov's job
as defense overseer on the Secretariat and his candi-
organizations.
' Ustinov's role as head of the V.S.N.Kh. has remained obscure, but
theoretically he provided overall guidance to industry and construc-
tion and coordinated the work of Gosplan and other planning
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Ton Secret
date membership on the Politburo had already given
him over 10 years of experience as a member of
leadership bodies before he became Defense Minister.
Grechko, on the other hand, did not gain leadership
status until he was appointed to the Politburo in 1973,
six years after he became Defense Minister
As party secretary, Ustinov spoke and published far
less on economic topics than Ryabov did as an oblast
party leader. Most indications of his economic think-
ing, therefore, come from reports on his attitudes and
from his statements on military and political questions
after he was named Minister of Defense.
Ustinov is reported to be a forceful and effective
manager who, like Kosygin, has command of detail
and is familiar with affairs at the production level.
He apparently is interested in modern cost-effective-
ness and systems analysis methods in management. An
advocate of such management techniques, Nikolay
Ogarkov, was appointed chief of the General Staff
within a year of Ustinov's arrival at the Defense
Ministry. In his Lenin Day speech in April 1973,
Ustinov made a by then rare reference to the economic
reform of 1965 and referred favorably to the use of
economic methods, automated managements stems,
and an experiment in financial autonomy
Ustinov's performance as Minister of Defense tends to
support the thesis that he brings a broad and somewhat
unconventional perspective to the job. Although citing
the need for strengthening military capabilities, he has
asserted that the military now has adequate equipment
and that what is needed is better utilization of that
equipment and improved readiness. Writing in
Kommunist vooruzhennykh sil, No. 21, October 1977,
Ustinov stated that "task No. One" is to learn how to
get the maximum combat potential out of modern
weapons and equipment.
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Ustinov has also linked the problems of morale
and discipline with those of living conditions. On
19 December 1977 he opened an all-army conference
on improving the troops' living conditions-the second
such conference ever held.' He explained at the
conference that military technology and changed work
conditions require better living conditions. This argu-
ment closely parallels the justifications Brezhnev
offered for the consumer program in the Ninth (1971-
75) Five-Year Plan
Ustinov has consistently backed Brezhnev's detente
policy and has seconded his statements on military
policy. In his speech in February 1978 commemorating
the 60th anniversary of the Soviet Army and Navy,
Ustinov strongly endorsed detente, singling out the
Strategic Arms Limitations Talks and the Mutual and
Balanced Force Reduction negotiations as particularly
important for arms control. He has also repeated
recent statements by Brezhnev that, if required, the
Soviet economy, science, and technology are capable of
quickly producing any weapons developed by the West,
that the USSR spends only as much as is necessary on
defense, and that the country has never aspired to
military supremacy for the purpose of inflicting a
"first strike." These formulations appear to deny the
need for any extraordinary expansion of weapons
programs.
In sum, Ustinov appears less likely than Grechko to
look at military wants-both hardware and person-
nel-solely from the point of view of what the military
would like to have. He is more likely, also, to see these
questions in terms of what the defense industry and the
economy are able to provide, with greater consider-
ation given to technological difficulties and economic
costs. He should also be more aware of the importance
of the development of the economy as a whole to the
vigor and potential of the defense industry. And
Ustinov seems more inclined, despite his interest in
technology and weapons, to pursue military strength
by looking beyond weaponry and force levels to
questions of doctrine, utilization, and morale. His
leadership experience equips him well to politick on
behalf of his institutional interests, but it also has
' The first conference occurred in June 1962, with Grechko, then
First Deputy Minister of Defense and Commander in Chief of the
other groups and of the necessity for compromise.
Ustinov's 38 years in Moscow as supervisor of one of
the most centralized sectors of the bureaucracy are in
striking contrast to the background of his successor as
party secretary responsible for defense industry. Yakov
Ryabov made his entire career in Sverdlovsk Oblast,
serving as party second secretary from 1966 to 1971
and then as first secretary until his transfer to Moscow
in October 1976. He is in part a product of the party's
personnel policy in the Brezhnev years, which has
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emphasized stability, orderly promotion within a
regional hierarchy, and little cross-posting. Ryabov
has an engineering and industrial background, and his
former region is one of the country's major industrial
centers, with defense and heavy industry predominat-
ing
Such a background might be expected to engender a
somewhat different outlook on economic questions
than produced by a career at the center. Indeed, during
his leadership of Sverdlovsk, Ryabov became a spokes-
man, and his oblast a model, for innovative and
aggressive regional approaches to economic manage-
ment. For these approaches they attained national
publicity second only to Leningrad Oblast and its first
secretary, Romanov.
In the 1960s, under Ryabov's predecessor, Sverdlovsk
became known for the application of a program for the
scientific organization of labor (NOT) in its enter-
prises. This effort, exemplified by the use of time and
motion studies, soon focused attention on a host of
factors affecting production efficiency, including tech-
nology, training, and working conditions. NOT was a
logical antecedent to the economic initiatives that
proliferated in the oblast in the 1970s under Ryabov's
stewardship. The common elements in these programs
and some themes prevalent in Ryabov's statements are
examined below in order to clarify the economic
thinking that Ryabov has brought to his job in
the Secretariat:
? In 1970, the oblast party committee initiated the
formulation of a plan, subsequently approved by
Gosplan, for the specialization and coordination of
machinebuilding enterprises in the oblast for 1971-80.
? In 1972, the Central Committee approved
Sverdlovsk's program to increase the output of existing
enterprises by reconstructing and improving technol-
ogy with a minimum of capital investment.
? Leningrad and Sverdlovsk were the first oblasts to
elaborate long-term (to 1990) comprehensive plans of
development. Work on the Sverdlovsk plans received
Central Committee approval in 1973.
? At the start of the last three five-year plans the oblast
held conferences on how to introduce advances in
science and technology into the economy.
? The Sverdlovsk city party committee has created an
institute of management, where enterprise directors,
chief engineers and chief economists, and city party
workers are enrolled in two-year courses.
Clearly, Ryabov has emphasized a strong party role in
economic management. Most of the touted Sverdlovsk
programs have been attributed to party committee
initiatives, and institutional arrangements have been
made to facilitate their supervision by the party.
Formulation of the long-range comprehensive plan has
been conducted by a council for planning under the 25X1
oblast party committee. Branch commissions attached
to the oblast party committee were created to approve
reconstruction plans in the last five-year plan, and city
party committees formed councils to coordinate and
conduct reconstruction at city enterprises. Problems of
management, welfare, and labor resources are ad-
dressed at scientific-technical councils attached to city
and district party committees.
As the creation of these councils suggests, Ryabov has
also advocated a collegial approach to decisionmaking
and reliance on the advice of specialists. He has
frequently criticized leaders, both central administra-
tors and local party officials, for acting on their own
without consultation. Sverdlovsk's economic programs
have had a heavy input from specialists. Ryabov edited
a 1974 book on Sverdlovsk's comprehensive plan along
with the head of the Urals Scientific Center's Eco-
nomic Institute, which guided the development of the
methodology for the formulation of the plan.
The plan itself illustrates Ryabov's belief that develop- 25X1
ment must be fostered by a comprehensive regional
approach to planning and management that meshes
the activities of various sectoral organizations and
takes into account local conditions. The goal is to
achieve more efficient and balanced development by
coordinating the activities of different sectors, provid-
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ing adequate infrastructure and social facilities and
services, taking into account and improving labor
resources, and better utilizing local material resources.
The use of economic indicators and modeling is aimed
at providing a range of options as the basis for making
rational decisions.
Criticism of the central governmental bureaucracy
runs throughout Ryabov's statements. Many of the
Sverdlovsk programs impinge on the interests of the
central bureaucracy, which adds to the normal points
of tension between Moscow and provincial authorities.
Ryabov has frequently criticized Gosplan and central
ministries for not adequately supporting reconstruction
programs, for propagating poorly balanced plans that
do not guarantee needed inputs, for ignoring the
adequacy of infrastructure and local material and
labor resources, and for resisting efforts to reorganize
the management of local enterprises. He has charged
that the main administrations of the ministries are too
far from production units, and he has attacked plans to
organize in Moscow an all-union association whose
product would be produced chiefly in Sverdlovsk. In
defending his position, he has cited the provision in the
1973 decree on associations which provides that even
all-union administrative units will be located in the
region where the sector's major production activity
takes place.
In fact, in 1974 Ryabov appeared to side with General
Secretary Brezhnev in a public dispute with President
Podgorny over the organization of economic manage-
ment. His statements can be read as backing an
argument for reorganizing the government bureauc-
racy in order to provide unified management over
narrow sectoral ministries and to increase regional
control, particularly on a party basis. Such a position is
certainly in harmony with most of Ryabov's other
commentary on economic issues.'
' At the Central Committee plenum in December 1973, Brezhnev
called for a "unified comprehensive set of measures" to improve the
"entire economic mechanism" and counseled that such questions
demanded a "party approach" rather than a "narrow economic" or
"technocratic" approach. Later the same month Podgorny defended
the record of the "sectoral principle of industry" and declared that
"no radical reorganization of the existing system of management is
involved." This, together with other evidence, suggests that Brezh-
nev was supporting a reorganization that would consolidate manage-
ment of ministries and perhaps strengthen regional management.
Still later, in a speech in June 1974, Podgorny berated local officials
for turning to higher authorities in Moscow with problems that they
Although Ryabov has not been a particularly vocifer-
ous advocate of the consumer goods industry, welfare
measures have figured significantly in his programs,
and he pioneered incorporation of such measures in the
comprehensive plans for the Sverdlovsk region. One
aim of these comprehensive plans is to coordinate
economic and social development and to raise targets
in the latter category to the status of the traditional
production targets. In Ryabov's book on long-range
comprehensive planning, he listed only two goals for
such planning: (1) raising the effectiveness of produc-
tion and the growth rate of labor productivity, and
(2) raising the population's standard of living.
Ryabov consistently evinces a cost conscious approach
to the questions he discusses. The aims of the long-
range comprehensive plan, as noted above, are stated
in terms of efficiency and productivity, not in terms of
scale. Before many others, Ryabov seems to have come
to an appreciation of the limitations that must be dealt
with in devising economic policy. He has noted that
Sverdlovsk, although it enjoys a high concentration of
heavy industry, has limited labor resources and much
old plant. The NOT approach to labor organization,
specialization, and reconstruction programs were de-
signed to cope with these conditions. Ryabov also has a
passion for calculating the effect of the measures
adopted, often in terms of savings realized. Thus, he
notes that in the Ninth Five-Year Plan (1971-75)
reconstruction saved the oblast 600 million rubles in
comparison with the costs of new construction, and
that, by 1980, improved management structures could
free 85,000 employees-"not a small supplement
taking into account the tautness of the balance of labor
forces in the Urals economic region."
themselves could solve if they worked in the proper manner.
Although larger organizational issues were not explicitly addressed,
the implication of Podgorny's remarks was that the administrative
system was not to blame-only the behavior of local officials. An
unmistakable riposte was delivered by Ryabov in an article in
Pravda the next month. He cited examples where local party
committees were forced to intercede in Moscow because of the
shortcomings of the central ministries. One of the examples involved
an organizational change being resisted by ministerial officials.
Ryabov closed the article by stating that "establishment of a genuine
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Overall, Ryabov's approach to economic management
may be categorized as progressive, if not reformist. He
coauthored, with a member of the Sverdlovsk Institute
of the National Economy, a book on the application of
the economic reform in the oblast in 1971, just as the
topic was disappearing from national discussion. He
has supported the follow-on phase to the reform, the
amalgamation of enterprises into associations operat-
ing on cost-accounting principles. His interest in
management institutes, automated management sys-
tems, and the use of economic-mathematical methods
in modeling regional development also reflects a
progressive turn of mind.
In many ways Ryabov's position has now radically
changed, and his previous behavior offers no simple
and direct guide to how he will act in his new
assignment. It does, however, suggest some broad
tendencies that are likely to continue in his approach to
economic issues.
First, although certainly sympathetic to defense inter-
ests, Ryabov appears likely to exercise a relatively
detached, objective, even a critical faculty in judging
the requests and programs of the military and the
defense industry. Unlike Ustinov, he is not an alumnus
of the ministerial bureaucracy that he now oversees
from his party perch. Moreover, he has spent his career
exposing the faults and criticizing the operations of
central government institutions.
Second, this critical faculty is likely to be reinforced by
Ryabov's understanding of economic limitations and
by his seemingly genuine interest in efficiency and
savings, measured in terms of rubles and kopeks. A
leader who would advocate more renovation in his
region at the expense of new construction projects is
likely to manifest an equivalent kind of "objectivity"
wherever he is posted.' Ryabov is also likely to look to
management tools and organizational measures-
' Ryabov's espousal of reconstruction was not totally disinterested.
On the national level, such an emphasis tends to favor the long-
developed western regions, such as Sverdlovsk. over the newly
rather than just more inputs-to meet the needs of the
defense industry.
Third, Ryabov should understand and perhaps at times
try to accommodate the needs of other economic
sectors and social purposes. This assumes that at least
some of his devotion to comprehensive and long-term
planning on the regional level will be retained in his
approach to national issues. If so, he would be apt to
see the need to coordinate the development of the
defense industry with progress in other economic and
social areas. His advocacy of long-term planning would
indicate a willingness to take longer term prospects 25X1
into consideration and, perhaps, on their account to
modify more immediate goals.
Since 1976 the military and the defense industry have 25X1
been led by individuals who are not products of those
institutions, however close or sympathetic their rela-
tionships have been. While undoubtedly devoted to
defense, Ustinov and Ryabov should feel less alle-
giance than their predecessors to the institutions they
now head. These changes in leadership have not been a
matter of replacing an in-house professional with one
from a different but equally specialized field. Ustinov
and Ryabov have brought related, but broader, ex-
perience to the positions they now occupy. In terms of 25X1
the nonmilitary aspects to their careers, therefore,
Ustinov represents an advance over Greckho, and
Ryabov and advance over Ustinov.
Moreover, these leaders have expressed views that
could conflict with the narrow, near-term interests of
the military and defense industry establishments they
now head. Ustinov appears to be particularly conscious
of costs and committed to maximizing the effect of
inputs to the military, not just maximizing those
inputs. In the course of his career, Ryabov has
formulated a comprehensive concept of economic
develoment and policy that looks to the future,
embraces all economic and social sectors, focuses in a
variety of ways on improving efficiency, and envisages
a larger role for regional institutions in planning and
management. A "more-bang-for-the-ruble" approach,
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to which these leaders seem inclined, would not
necessarily detract from military strength, but it does
suggest a careful calculation of how much bang is
needed and how much it will cost.
In periods of relatively high growth rates and adequate
resources, Ustinov and Ryabov would presumably
press the cause of the military and the defense industry
about as vigorously as their predecessors. Their back-
ground and particular interests are likely to make a
greater difference, however, in a deteriorating eco-
nomic situation, when the choice becomes sharper
between immediate military programs and long-term
economic growth and modernization that will sustain
future military strength. In this case, the evidence
offers reason to believe that leaders such as Ustinov
and Ryabov would, to some extent, give weight to long-
term prospects and strategies, concede the importance
of other sectors and economic growth in general,
economize in their own sectors through greater effi-
ciency and scaled-down plans, and, to facilitate all this,
quite possibly support detente and arms control.
These, of course, would not be their only impulses, and
how much these motivations might dominate others
and influence the policy positions adopted by the two
leaders is very difficult to predict. It is important to
recognize, however, that Ustinov and Ryabov are
likely to be subject to such motivations. At a minimum,
this injects greater unpredictability into the future and
cautions us not to presume stereotyped, institutional
responses from these leaders to economic-military
issues
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Unlike Ustinov and Ryabov, Vladimir Dolgikh, Secre-
tary of the Central Committee, represents no recent
change in the leadership. Furthermore, his heavy
industry domain, while closely allied to the defense
industry, is not entirely a part of a so-called "military-
industrial complex." He should be mentioned, how-
ever, because his interest in Siberian development
illustrates and personalizes at the leadership level the
issues these development programs pose for the defense
effort.
Dolgikh came to the Secretariat in 1972 as a son of
Siberia and spokesman for its rapid development. He
had been first secretary of Krasnoyarsk Kray since
1969 and for seven years before that, director of the
Norilsk Mining and Metallurgical Combine. In
occassional speeches since his appointment to Moscow,
he has reaffirmed his interest in Siberia.
Siberia demonstrates in rather extreme form a prob-
lem facing the economy as a whole: the pressures to
devote increased attention to living conditions and
compensation. Problems evident elsewhere in the
country are magnified here by the combination of a
sparse indigenous population, a hostile climate, and
primitive conditions in much of the territory. Success-
ful long-term development thus requires, in compari-
son to other areas, more immediate and massive
diversion of resources to social infrastructure and
compensation.
Dolgikh has recognized and propounded this point.
Like Ryabov, he has been a leader in promoting
regional planning, having prepared a 10-year (1971-
80) comprehensive plan for the kray that received
Brezhnev's praise. He has complained not only of the
central ministries' poor coordination of production
activity in the kray, but also of their failure to provide
infrastructure and social amenities along with produc-
tion facilities. At the 24th Party Congress in 1971,
Dolgikh noted that the labor situation was being hurt
by the disproportion between production development
and the construction of housing and social facilities.
Speaking to Western journalists in 1972, he said .
experience showed that housing and social facilities
should be built faster than factories.
The argument can also be made that huge projects,
such as the development of Siberia, in many ways
compete for resources with military programs.' Much
of the Siberian development is directed at exploiting
raw materials. While reinforcing the base of economic
as well as military strength, it does not contribute
directly and immediately to the status of military
forces. Although many defense officials may favor
Siberian development because they see its military
value, their support does not obviate the issue that such
projects raise for economic and military strategy. This
'This argument is developed by Dr. John P. Hardt, "Military or
Economic Superpower: A Soviet Choice," in the published proceed-
ings of the 1978 Senior Conference of the US Military Academy on
"Integrating National Security and Trade Policy: The United
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presumed support would be, in fact, an instance of the
military recognizing, at least in terms of one region,
the necessity of investing in general economic develop-
ment to provide the foundation for military power in
the long term
In the near term, when projects such as the develop-
ment of Siberia are given a high priority, they raise
demands for a full range of material and labor
resources, including advanced equipment, imported
technology, and skilled labor, that the defense sectors
normally have first claim to. Dolgikh, for example,
argued at the 24th Party Congress that the most highly
productive equipment should be provided first of all to
the northern and eastern regions because of the
shortage of labor there.
Dolgikh has not expounded at such length on his
commitment to defense needs or wants. His clear
interest in Siberian development, however, implies that
defense demands have a strong contender for Dolgikh's
sympathies in his role of overseeing and representing
the heavy industry sector. It also indicates a proclivity
for thinking in long-range terms and a willingness to
make large investments in the present in order to
obtain a more distant payoff.
P
25X1
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Top Secret
Top Secret
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