REVIEW OF SOVIET INTERNAL AFFAIRS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000101880002-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 22, 2016
• Document Release Date: August 16, 2010
• Sequence Number: 2
• Publication Date: June 1, 1980
• Content Type: REPORT

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Central Intelligence,~gency
National Foreign Assessment Center
June-July 1980
Domestic Politics
During most of the past two months the Soviet leader-
ship devoted its attention to setting the stage for its own
political convention--the 26th party congress--and tryina
to put relations with the West back on track.
Several obstacles frustrated these efforts--above all,
lack of progress in formulating the 1981-85 economic plan
directives, the partial attendance at "their" Olympic
Games, and the continuing effects of their military
occupation of Afghanistan.
The Soviet leaders can be expected to persist in
searching for ways around these roadblocks in the months
preceding the congress, which is scheduled for next February.
They may be particularly active on the diplomatic front,
hoping to create an international climate more propitious
to a favorable outcome on the major issues of economic
development and political succession.
Preparing for the Congress
A Central Committee plenum in June approved a "business-
as-usual" agenda for the 26th party congress. Brezhnev and
Kosygin were named to deliver the principal addresses--a move
suggesting that both men have recovered to some extent from
their health problems of late last year. The plenum also
announced a timetable for the precongress round of local
party meetings. Scheduled to begin next month, these
This review is based on analysis and research work
completed by CIA's National Foreign Assessment Center
through 13 August 1980. The contributions have been
reviewed by appropriate individuals within NFAC but
have not been formally coordinated. Comments are
meZeome and may be addressed to Chief, Internal Branch,
USSR-EE Division, Office o PoZitica2 Analysis, Room
6 G 22, CIA Headquarters
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meetings will provide the party leadership an opportunity
to make personnel changes that will sY}~pe the Central
Committee to be "elected" at the party congress. One
of the most important political events in Soviet life,
this process will engage a great deal of the leadership's
attention.
Brezhnev's report to the June plenum contained only
a few general remarks on economic matters, reflecting a
"go-slow" approach on such issues. The target date for
a first draft of the 11th Five-Year Plan (1981-85), is
15 September, but major disputes in several areas--notably,
fuel and energy--appear to be causing delays in its
preparation. Gosplan does not expect to have the finished
product ready for ratification until mid-May--approximate
two and a half months after the end of the 26th congress.
Retuning Soviet Diplomacy
Brezhnev was equally brief in commenting on the world
scene at the June plenum, but his remarks suggested a
desire to revive detente if at all possible. He noted
that a return to more "normal" conditions in Afghanistan
had allowed Moscow to withdraw some of its troops, and he
stressed the need to persevere with the peace program laid
down by the 24th and 25th party congresses. Gromyko's more
detailed assessment was less optimistic, judging from the.
plenum's resolution on his report, but it is not clear to
what extent such differences in tone reflect divergent
views within the top leadership. They may simply be
meant to preserve Moscow's freedom of maneuver on the
issue.
Brezhnev and the other Soviet leaders seem to believe
that their token withdrawal from Afghanistan and other
recent moves--for example, the new TNF proposal made
during West German Chancellor Schmidt's visit--will
help revive detente. In any case, their present approach
holds out the possibility for constructive discussions
and even concessions in areas of significant concern
to the West, provided that the latter de-emphasize the
Afghan issue. This more conciliatory approach probably
was prompted in part by domestic considerations such
as concern for the viability of the lagging economy or
popular grumbling over the "costs" of Soviet actions in
Afghanistan.
Playing for Time at Home
The new law on the authority of local soviets, adopted
at the June session of the USSR Supreme Soviet, illustrates
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the leadership's predilection for halfway measures on
controversial issues. While the new lbw appears to be
aimed at improving the coordination ofi local planning
and management, it is not clear that the newly expanded
powers of local elected bodies will do the trick. The
law does not address the difficulty created by the
absence of authoritiative administrative structures
within the territorial production complexes. Without
such structures capable of overruling the parochial
interests of participating ministries, the changes
signify little more than tinkering with the existing
centralized structure.
A recent Central Committee decree calling for
a "socialist competition" to spur production reinforces
the impression that the leadership has not faced the
need for major reforms to ease the country's economic
problems.
Projecting Stability at the Top
During the period under review there were several
signs of a conscious effort to convey the impression of
stability within the top leadership--presumably to head
off speculation, at home and abroad, on the succession
issue. Brezhnev and Kosygin were unusually active during
June and July before going on their annual vacations.
Since then, Kirilenko and Tikhonov have been in charge
at the Secretariat and the Council of Ministers, respectively.
As expected, Chernenko accompanied Brezhnev to the Crimea,
and the other leaders seem to be engaged in routine business.
Suslov's prolonged absence--he has not appeared in public
since earl July--may simply mean that he is on vacation.
In addition, Ustinov's return to the scene in late June
put an end to speculation on how the Politburo might cope
with the problem of selecting his successor as Defense
Minister if this became necessary.
USSR-Eastern Europe Division, Office
of Political Analysis)
Economic Affairs
Halfway through 1980, we see little indication of
significant improvement in the performance of the Soviet
economy. On balance, we estimate that GNP growth will be
less than 3 percent this year.
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Industry Still Lagging
Industrial production grew 3.9 percent in the first
half of 1980 compared with the first half of 1979. This
figure is misleading, however, because industrial perfor-
mance in the first six months of 1979 was so poor. Moreover,
below-plan output of several commodities essential to
economic recovery--most notably steel, coal, and cement--
will limit industrial growth in the months ahead. We expect
output to increase only about 3 percent for the year--
just slightly better than last year's postwar low of
2.2 percent.
Energy Scene
Soviet energy problems persist. Overall energy
production in the first six months of 1980 rose 3 percent
compared with the same period in 1979, far short of the
planned 4.5 percent increase.
Soviet oil production during the first half
of this year averaged about 11.9 million
barrels per day--3.5 percent more than the
first half of 1979. Oil production during.
the rest of 1980 will have to average almost
12.3 million barrels per day to reach the
1980 production goal of 12.1 million
barrels per day, a feat we believe will be
difficult to achieve.
Coal output for the first half of 1980 was
down 1 percent from that posted in the
corresponding period of 1979. For the
year, coal output is unlikely to exceed
725 million tons, an amount 20 million
tons short of the revised annual goal.
Gas output through the first six months of
1980 was up 6.7 percent over last year,
although still slightly behind the 6.9
percent planned for this year. It is
likely that the 1980 target of 436
billion cubic meters will be met as
production picks up in the fourth
quarter.
In an effort to cope with the tightening supply
situation, the USSR Council of Ministers for the first
time in its annual resolution on winter fuel has set
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specific targets for energy conservation. Their
resolution directs the national and republic ministries
and departments to reduce consumption 'of coal, fuel
oil, and gas by 3 percent, electricity by 1 to 3 percent,
and heat cogenerated from power plants by 1 to 2 percent.
This year's resolution on winter fuel, taken together
with reports of cutbacks in fuel deliveries to industrial
enterprises, relects the growing difficulties being
encountered in the Soviet Union in the production
Soviet leaders are struggling to fashion an energy
policy for the 1980s. The complexity of the task as
well as disagreement over this policy is one of the
primary factors delaying completion of the 1981-85
plan. The agendas recently adopted for the republic
party congresses, which will be held in mid-January
and early February 1981, indicate that party leaders
are uncertain about when all work on the plan will
be completed. None of the agendas include a report
on the next five-year plan, even though it ;s one
of the main items to be discussed at the 26th party
congress scheduled for 23 February. In past years,
the republic congresses have discussed the draft
five-year plans. The absence of the item from the
agendas this time suggests that party planners expect
work on the plan to continue to~the last hour and that
they wish to keep open the options either of dispensing
with the discussions or rescheduling the republic
and delivery of energy.
congresses.
Agriculture
Hot, dry weather during July has lowered yields in
some USSR grain areas. As a result, we now estimate total
Soviet grain output at roughly 210 million tons, at the
low end of our previous forecast of 210 to 220 million
tons. If this projection holds, the harvest would fall
about 25 million tons below the 1980 target, but would
still represent a marked recovery from last year's poor
179-million-ton crop. Assuming no more than marginal cuts
are made in current livestock herds and that rebuilding of
depleted grain stocks is postponed, about 240 million tons
of grain will be needed to meet domestic requirements this
year.
Economic Denial Measures Largely Ineffective
The economic denial measures against the USSR have
drawn only limited support from our allies. At best
they have been reluctant partners, with their responses
seemingly aimed more at placating Washington than
punishing Moscow. Plans are currently under way,
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shortfall compared with their preembargo expectations.
for example, to build a large diameter, high capacity
pipeline from West Siberia to Western Europe--the
biggest East-West project ever undertaken. The deal
will be a financial bonanza for the USSR, but, more
significantly, it reflects the success Moscow has
had in undermining Western economic sanctions. The
single area where the sanctions have had a significant
impact is the grain embargo. Our latest figures
indicate that the Soviets have replaced 6.5 million
of the 17 million tons of grain denied this year by
the United States and should face an 8-million-ton
Living Standards
Per capita consumption of meat, a major standard by
which Soviet consumers gauge their welfare, is expected to
decline by almost 3 percent this year--the result of last
year's disappointing grain harvest and, to some extent,
restricted imports of US grain. As a result, per capita
consumption in the Soviet Union is likely to fall to a level
equal to that in 1975. Recent reports indicate that some
Soviet consumers are openly expressing their displeasure
over the growing food shortages. Strikes at the Togliatti
and Gorkiy auto and truck plants in May were at least
partially caused by food shortages. Widely scattered
incidents of unrest during the last year in Yerevan,
Estonia, and Murmansk also are linked to the worsening
Real per capita consumption in the USSR is less
than a third that in the US, far behind major West
European countries and Japan, and even lags behind
most of Eastern Europe. Moreover, progress in raising
living standards in the USSR is likely to slow to a
crawl in the 1980s as overall economic growth slows
under the impact of labor and energ shortages and
low productivity. USSR-Eastern
Europe Division, Office of Economic Research)
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NFAC/OPA/USSR-EE/SRI ~15 August 1980)
1 - DCI
1 - DDCI
1 - Executive Registry .y
1 - D/NFAC
1 - DD/NFAC
1 - NFAC/Registry
1 - Executive Secretary, NFAC Production Board
1 - Senior Review Panel
1 - NFAC/Foreign Liaison Staff
1 - Chairman/National Intelligence Council
1 - NIO/USSR-EE
1 - NIO Political-Economics
1 - NSC/Presidential Briefing Coordinator
1 - Arms ontrol Intelligence Staff
1 - DDO/SE
1 - DDO/SE
1 - D/OER
1 - C/OER/U
1 - OER U SE
1 - DD/OPA
2 - OPA/Production Staff
1 - C/OPA/USSR-EE
1 - C/OPA/USSR-EE/SRI
1 - C/OPA/USSR-EE/SRM
1 - C/OPA/USSR-EE/SRE
1 - C/OPA/USSR-EE/EE
1 - D OSR
1 - D/OCO
3 - P&PG
1 - D/OPA
1 - OSWR/LSB
1 - A. Denis Clift
Assistant to the Vice President
for National Security Affairs
Office of the Vice President
Room 298
Old Executive Office Building
1 - Les Denend
National Security Council Staff
The White House
1 - D4arshall Shulman
Special Adviser to the Secretary of State
Room 7246
Department of State
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1 - William Shinn
Director, Office of Soviet Union Affairs
Room 4217
Department of State
1 - Reginald Bartholomew
Director, Politico-Military Affairs
Room 7317
Department of State
1 - Anthony Lake
Director, Policy Planning Staff
Room 7311
Department of State
1 - Dr. Roger Molander
National Security Council Staff
Room 373
Old Executive Office Building
1 - Fritz Ermarth
Director, Strategic Planning
National Security Council Staff
Room 365
Old Executive Office Building
1 - Marshall Brement
USSR/Europe
National Security Council Staff
Room 368
Old Executive Office Building
1 - Steven Larabee
USSR/Europe
National Security Council Staff
Room 368
Old Executive Office Building
1 - Gen. Jasper Welch
Director, Office of Policy Analysis
National Security Council Staff
Room 375
Old Executive Office Building
1 - Brigadier General William Odom
Military Assistant to Dr. Zbigniew Brezezinski
National Security Council Staff
International Situation Room
The White House
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1 - David Aaron
Deputy Assistant to the Presidenti for National
Security Affairs
The White House
1 - Ambassador Henry Owen
Economic Affairs
National Security Council Staff
Room 351
Old Executive Office Building
1 - Walter Slocombe
Principal Deputy Assistant Secretary
of Defense (ISA)
Room 4 E 813
Department of Defense
Pentagon
1 - The Honorable George S. Vest
Assistant Secretary of State, European Affairs
Room 6226
Department of State
1 - Robert Barry
Deputy Assistant for European Affairs
Room 6219
Department of State
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