GORBACHEV AND THE DEFENSE BUDGET: THE PROSPECTS FOR GLASNOST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90T00114R000800320001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 22, 2016
• Document Release Date: March 19, 2012
• Sequence Number: 1
• Publication Date: July 10, 1987
• Content Type: MEMO

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DATE / Z
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DOC NO SO / /' 7 -too 24
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ments and queries are welcome and may be directed to the Chief, Defense Economic
Policy Branch, Defense Economics Division, SOYA, 25X1
Summary
SOV-M87-20073X
Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
10 July 1987
Gorbachev and the Defense Budget: the Prospects for Glasnost
tion of a single line "budget", which is widely agreed to comprise only
a small part of their total defense expenditures.
ong limited their disclosure of defense spending data to the publica-
Releasing more defense spending data would almost certainly
be tied to revived Soviet proposals for international agreements to
freeze or reduce military expenditures, proposals which Western coun-
tries have generally sharply criticized, in part on the grounds of the
Soviets' failure to disclose their true defense costs. Such an action
This memorandum was prepared by I I Office of Soviet Analysis. Com- 25X1
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would also strengthen the image of reasonableness and honesty that
Gorbachev is trying to cultivate in the foreign policy sphere and might
succeed in putting Soviet advocates of faster growth in military
spending on the defensive. On the other hand, release of expenditures
data alone would not overcome Western objections to Soviet proposals
for limitations on defense spending and would almost certainly prompt
Western calls for further data on Soviet defense activities. It would
also create resentment in the military which might eventually be politi-
Although the political and security costs of fuller disclosure of
defense expenditures might seem small to Western governments, pre-
vious Soviet regimes have judged them to be formidable and so far at
least, Gorbachev has done the same. He has, however, also shown
himself willing to make moves that his predecessors would have
deemed too risky to advance his political and policy goals.
Should Gorbachev opt for a fuller disclosure of Soviet defense
expenditures, the difficulties of verifying the reported total defense
spending figure would be so great that he would have ample room for
deception. He could, for example, announce a figure which, while un-
derstating what we believe the Soviets actually spend, would be large
enough to win wide acceptance from Western governments and pub-
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LZDAI
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Table 1
The Official Soviet Defense Budget, 1975-87
Official Defense Budget As a Percentage of Total Reported
(billion current rubles) State Budgetary Expenditures
1975
17.4
8.1
1976
17.4
7.7
1977
17.2
7.1
1978
17.2
6.6
1979
17.2
6.2
1980
17.1
5.8
1981
17.1
5.5
1982
17.1
5.0
1983
17.1
4.8
1984
17.1
4.6
1985
19.1
4.9
1986
19.1
4.1
1987 (planned)
20.2
4.6
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Potential Benefits of Disclosure
A fuller Soviet disclosure of defense spending data would probably come in con-
junction with a proposal for an international agreement to freeze or reduce military ex-
penditures. The Soviets and their Warsaw Pact allies have pushed such proposals in
multinational forums on numerous occasions in recent decades. One proposal led to a
1973 UN resolution that called for a 10-percent reduction in the military budgets of all
five permanent members of the Security Council and the allocation of a portion of the
savings to development assistance. Since then, the Soviets have continued to promote
similar measures in the United Nations--most recently on 8 June 1987--and in various
arms control forums such as the Conference on Disarmament in Geneva. The Soviets
have enjoyed little success getting their proposals adopted, however, in part because of
their unwillingness to reveal the full extent and details of their own defense budget. A
UN experts group established to study the feasibility of the limitation of military expen-
ditures designed a standard format for the reporting of military spending (see figure 1).
Several Western countries, including the United States, and Romania--a member of the
Warsaw Pact--have provided data on their defense budgets in this standard format, but
the Soviet Union still refuses to comply.
A fuller disclosure of Soviet defense expenditures would do much to bolster the
image of openness and honesty that Gorbachev has cultivated with his much-publicized
campaign for glasnost. To the extent that it does so, the prospects for winning interna-
tional support for Soviet arms control proposals and foreign policy initiatives unrelated
to agreements on the reduction of military budgets could improve as well.
Fuller public disclosure of Soviet defense expenditures could also help Gorbachev
on the domestic political and policy front. He has publicly complained about the USSR's
heavy defense burden and the problems it causes the economy. There are indications,
however, that other Soviet leaders may disagree with this view and believe that defense
should receive even more. At the January 1987 Central Committee plenum, for example,
Gorbachev emphasized the need for reconstruction and greater attention to efficiency in
the armed forces, while the concluding resolution demanded a "comprehensive
strengthening of defenses." The differing emphases suggest a leadership debate on the
allocation of resources between defense and non-defense uses. Because the high-level
advocates of faster growth in military outlays would almost certainly be privy to actual
Soviet defense expenditures, a fuller disclosure of Soviet defense costs would probably
have little or no direct impact on their thinking about the allocation of resources to de-
fense. Still, such a disclosure might be a politically effective move for Gorbachev, for by
revealing to the Soviet people that the armed forces have been receiving more resourc-
es than previously claimed, he could put the advocates of more rapid growth in military
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Figure 1
UN Format for Reporting Military Expenditures
Resowre
costs
1. Operating costs
1. Personnel
(a) Civilian
(b) Conscripts
(c) Other military
2. Operations and maintpunn
(a) Materials for current use (purchases of food.
clothing. petroleum products. training mate.
rials. medical materials, office supplies and the
like)
(b) Maintenance and repak
(i) Contract services for repair and mdats-
IwuIc@ of (B) of ipment and facilities
para. materials and tools for
repair and maiatesance of equipment and
facilities
(c) lbvel eapenses. postal charges. printing ea.
penes and paymeiy for other current services
(d) Real estate mw
II, Prueunmenemedtaatarrtion
1. Procotermem?
W- Aircraft and engiasa
(b) Missiles. Including ecaventland warheads
(c) Nuclear wasbeads and bombs
(d) Ships and bow
(e) 'links. Unseated personnel cameo and other
arnwumd equipment
Artiflary
CO
(g) Other ground fact weapmn
(h) Ordnance and ammunition**
(0 Medronics and communications
(I) Vehicles
(6) Other
2. Contortion
(a) Airbaaes, airfields
(b) Missile sites
(c) Naval ban and facilities
(d) Electronics. commanicadar and related one.
tuma and facilities
(e) Personnel facilities
N Medical facilities
(8) Warehouses. depotsrepair and maintenance facilities
(h) Command and administration facilities
(0 Poetifiations
N Shaken
(6) Other
III. Research end develapnem
1. Buie and applied research
2. Development, testing and evaluation
' S.aa.+Yb
Dow-daft maraud ,s, Igsere
AnrruW wIssv., aslpt .
Source:
Strategic General Central support, Para. Civil Millar
forces purpose administration military defence arsismm?e
forces and command forces
(2) (3)
(I) (4) (S) (6) (7) (8) (9)
Subdivision of general purpose forces
Cole. (2) Land forces
(3) Naval forces
(4) Air fames
(S) Other combat forces
Subdivision o f mural support, udminis ra:on and command
(6) Central support. (supply. maintenancq
construction. training, medical. tic.)
(7) Central administration and command,
including intelligence and communications
Subdivision of miilmry au(aamv
Cols. (10) Contributions to allied faces and infrastructure
(11) Military assistance to allies and non.allies
United Nations Disarmament Yearbook, UN Center for Disarmament, Department
of Political and Securit
C
il
y
ounc
Affairs, Vol. 3: 1978, UN, NY, 1979, pp. 420-1.
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Making more data available, however, would entail some political costs. Because
the problems of verifying an international agreement on the limitation of defense expen-
ditures are so formidable (see inset), a fuller disclosure of Soviet defense expenditures
would not silence Western objections to Soviet proposals for agreements of this sort.
Rather, it would almost certainly prompt Western calls for further data--for example, on
the numbers and types of weapons the Soviets plan to procure and on the nature of
Soviet military research and development programs. The Soviets regard such informa-
tion as highly sensitive on national security grounds.
Verification of any defense spending figures announced by the Soviets
would be extremely difficult in the absence of highly detailed data on the cov-
erage of the reported outlays and the prices and quantities of the programs and
activities included in defense. Even if detailed data were available, the state's
control of the prices of weapons and military equipment would make it possible
for Gorbachev to change the defense budget without affecting the level of re-
sources actually going to the military.
Reconciling Western estimates of defense spending with Soviet reported
figures would be especially difficult. CIA estimates of Soviet defense spending
are useful in portraying general trends in the resources allocated to defense.
They are not, however, directly comparable to actual Soviet outlays because our
estimates are in 1982 constant rubles whereas Soviet data would probably be
expressed in either current prices or Soviet-style "constant" (comparable) prices
that have no Western counterpart. Estimates of Soviet defense expenditures
derived from published Soviet economic and financial statistics might avoid the
price base problem, but contain so many uncertainties that they would be use-
Disclosures in any detail would also probably generate resentment within the
military, which would be leery of revealing its force development plans to the West and
unwilling to run the risk of appearing to be a major drain on resources in the eyes of
Soviet citizens. Gorbachev currently appears confident of his ability to control the ar-
med forces, but the military's dissatisfaction could eventually be damaging to him--as it
was to Khrushchev--if he encounters a serious political challenge to his leadership.
Moreover, Gorbachev has, to some extent, associated himself with the sham defense
budgets--the 1986 and 1987 budgets were formulated, approved, and released to the
public during his tenure as General Secretary. As a result, a public acknowledgement
that Soviet defense spending has been greater than reported to date might be politically
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Prospects
Although the political and security costs associated with a fuller disclosure of
defense expenditures might seem small to Western governments, previous Soviet re-
gimes and--so far at least--the Gorbachev leadership have apparently judged them to
be formidable. Gorbachev has, however, shown himself willing to advance his political
and policy goals in ways that his recent predecessors would have deemed too risky.
The glasnost campaign, for example, has already entailed the public disclosure of wide-
spread corruption among the Soviet elite and the discussion of other once taboo sub-
jects such as Stalin's purges. Thus, we cannot dismiss the possibility that he may agree
to a fuller disclosure of Soviet defense expenditures.
Should Gorbachev release additional defense spending data, the difficulties of
verifying the reported defense spending total would be so great that he would have
considerable room to deceive. The Soviets, for example, might release an estimate of
defense spending considerably higher than the published defense budget of 20 billion
rubles, but still much lower than Western estimates of total expenditures. This would
allow Gorbachev to achieve his goal of making the USSR appear more forthcoming and
to score propaganda points in the West without giving away any secrets. At the same
time, Western experts would be put on the defensive to try to disprove Gorbachev's
number and validate their own estimates, particularly if the Soviets also provide a
breakdown which is externally plausible but still incorrect.
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