THE ECONOMY OF THE SOVIET BLOC: PRODUCTION TRENDS AND 1957 POTENTIAL

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• Collection: General CIA Records
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• Document Creation Date: December 27, 2016
• Document Release Date: April 26, 2013
• Sequence Number: 2
• Publication Date: May 20, 1953
• Content Type: REPORT

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Assistant Director
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ECONOMIC INTELLIGENCE REPORT
THE ECONOMY OF THE SOVIET BLOC:
PRODUCTION TRENDS AND 1957 POTENTIAL
CIA/RR 23
20 May 1953
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
g
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ECONOMIC INTELLIGENCE REPORT
Ibt ECONOMY OF Wilh SOVIET BLOC:
PRODUCTION TRENDS AND 1957 POTENTIAL
CIA/RR 23
(ORB Project 26-52-I)
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
.S-E-C-R-E-T
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FOREWORD
The fundamental objective of this report is to estimate the
economic position of the Soviet Bloc in 1957. The first four
sections of the report, however, deal entirely with the USSR, and
only the fifth, and last, section deals with the Soviet Bloc as a
Whole. There are several reasons for organizing this report in
this way. In the first place, the USSR is the heart of Soviet Bloc
economic activity, and Soviet production is by far the largest com-
ponent of Soviet Bloc production of most commodities and services.
In the second place, ORB research is more advanced for the USSR than
for the Satellites. Primarily for this reason, estimates of pro-
duction trends are less reliable for the Soviet Bloc than for the
USSR, though not so much less reliable as to invalidate the major
conclusions of this report. In the third place, historical trends
for the Soviet Bloc are rather artificial. The Soviet Bloc as it
now exists is a very recent creation. It is somewhat artificial to
estimate historical trends even for the postwar period, since it
involves the inclusion of data for Czechoslovakia and Communist China,
although the former entered the Soviet Bloc only in 1948 and the
latter only in 1949. It is also artificial to generalize the diverse
trends in different countries into a unified pattern and to include
with the well-established trends in the USSR the relatively more con-
fused situation in the Satellite economies. This is not to say,
however, that estimates of Soviet Bloc production trends are without
meaning. Future Soviet Bloc trends, in particular, represent the
development of what may for many purposes be considered to be a single
integrated economy.
At the time the basic statistics were gathered and the analysis
for this report was prepared, no change in the Soviet leadership was
anticipated. Consequently, there is no provision in the estimate for
alterations in fundamental economic trends which may result from this
change. It must be assumed, therefore, that the new administration
will not act so as to disrupt the economic trends described in this
report.
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--
CONTENTS
<
Summary and Conclusions
I. Postwar and Future Growth of the Soviet Economy
A. Postwar Era
B. Prospects for Future Expansion: 1957
C. Trends in Composition of Gross National Product
Page
1
2
3
5
II.
Soviet Industry
6
A.
Postwar and Future Growth
6
1.
Postwar
6
2.
Prospects for Future Expansion
7
B.
Producer Goods and Services
8
1.,
Pattern of. Growth ?
8
2.
Energy Industries
8
3.
Minerals and Metals Industries
9
4.
Machinery and Equipment Industries
9
5.
Chemicals Industry
10
6.
Forest Products and Construction Material
Industries
10
C. Transportation and Communications
D. Consumer Goods
11
III.
Soviet Defense Industries
12
A. Past Trends in Production
12
B. Prospects for Future Expansion:
1957
14
C. 1957 Potential
14
IV.
Soviet Agriculture
16
A. Past Trends in Output
16
B. Prospects for Future Expansion:
1957
16
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V. Growth of the Economy of the Soviet Bloc
A. Postwar and Future Trends
B. Sector Trends .
C. Soviet Bloc Defense Industries
Page
17
17
18
19
Appendixes
Appendix A.
Production Data: Index Numbers and Trend
Graphs
21
Appendix B.
Reliability of Production Data Used in
Constructing Indexes
23
?
1. Prewar Production Data on the USSR
23
2. Wartime and Postwar Production Data on
the USSR
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Appendix C.
Methodology of Aggregation --
29
1. Production Indexes
29
2. Gross National Product Indexes .
34
3. Breakdown of Gross National Product by Use . .
37
14. Index Components and Weights Used in
Constructing Indexes
37
Appendix D.
Methodology of Extrapolation
47
1. Extrapolation in Accordance with the Fifth
Five Year Plan 47
2. Extrapolation in Accordance with Absolute
Increases of Recent Years 48
3. Extrapolation Accounting for New Commodities
and Improved Quality 49
4. Extrapolation in Accordance with Demand
for Products 50
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Appendix E.
Appendix F.
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Page
5. Extrapolation of Agricultural and
Consumer Goods Branches 51
6. Extrapolation of the Defense Industry . . . 52
Population and Labor Force Estimates for the
Soviet Bloc 55
ORR Estimates Compared with Official Results
of Soviet Plan Fulfillment in 1952
61
Tables
Following Page
1.
Indexes of Production ,(1948=100) L7SSR and Soviet
Blo27
22
2.
Gross National Product Index for the USSR
36
3.
Soviet Bloc Population Estimates
55
4.
Soviet Bloc Labor Force Estimates
56
5.
Soviet Workers and Employees Estimates ,
59
6.
Comparison of ORR Estimates with the Tass Announcement
of Fifth Five Year Plan Fulfillment Figures
62
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Charts
Following Page
1. Gross National Product by Sector of Origin, US
and USSR 6
2. Soviet Gross National Product by Final Use for
Selected Years 6
3
. Index of Industrial Production
Index of Producer Goods Production
Index Of Consumer Goods Production
4. Energy
22
22
22
22
Index of Energy Production 22
Production of Coal 22
Production of Electric Power 22
Production of Crude Petroleum 22
5. Index of Metals Production 22
6. Ferrous Metals Industry 22
Index of Ferrous Metals Production 22
Production of Raw Steel 22
Production of Molybdenum 22
Production of Manganese Ore 22
Production of Rolled Steel 22
Production of Nickel 22
Production of Tungsten 22
7. Nonferrous Metals Industry 22
Index of Nonferrous Metals Production 22
Production of Tin 22
Production of Primary Copper 22
Production of PrimAry Aluminum 22
Production of Lead 22
Production of Zinc 22
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8.
9.
Index of Machinery.-80rEquiptentiTroduction . ?
Automotive Equipment Industry . . . . .....
?
,
Following Page
22
22
Index of. AutOmotive Equipment Production . .
?
?
22
Production of Trucks
22
Production of Tractors. . . . . . . . ....
.
22
10.
Railway Equipment,. Industry . - ...... .
.
.
.
22
Index of Railway Equipment Production
22
Production of Freight Cars.
22
11.
Shipbuilding Industry - . . . . ? ? ? ....
.
..
22
Index of Shipbuilding
22
Production of Merchant Vessels .
22
12.
Index of Agricultural,Machinery.Production .
?
?
?
22
Index of Metalworking.Machinery_Production .
?
?
!
22
Index of Textile Machinery Production .
22
Index of Machine Tools Production . . .. ?._.
?
?
?
22
13.
Index of Electrical.Machinery Production
22
Index of Electronic Equipment Production
22
Index of Mining Machinery Production .. .
?
?
22
Index of Bearings Production
22
14.
Chemicals Industry . . . . . . ? . ........
22
Index of- Chemicals
22
Production of Caustic Soda . . ? ..... p.
?
?
,?
22
Production, of Chlorine , . . . ........
.
22
Production of Sulfuric Acid
22
Production of Nitric Acid
22
Production of Rubber Tires
22
Production of Synthetic Rubber
22
15.
Index of Production of Forest Products
22
16.
Construction Materials Industry
22
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Index of Construction Materials Production ?
Production of Unglazed Bricks
Production of Cement . . . .. .
?
?
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Following Page
22
22
22
17.
Index of Transportation
22
18.
Index of Communications
22.
19.
Food Industry
22
Index of Food Processing
22
Fish Catch
22
Production of Meat
22
Production of Sugar ?
22
Production of Vegetable Oils ?
.
.
22
20.
Light and Textile Industry
22
?
Index of Production in the Light and Textile
Industry
22
Production of Cotton Yarn
22
Production of Wool Yarn
22
Production of Rayon ?
?
?
?
22
Production of Boots & Shoes
22
21.
Agriculture ?
22
Index of Agricultural Production
22
Production of Bread Grains
22
Production of Potatoes
22
Numbers of Cattle
22
Numbers of Hogs
22
Production of Cotton
22
Production Of Wool
22
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CIA/RR 23
_ _ _
(ORE Project 26-52-I)
SECURITY INFORMATION
THE ECONOMY OF THE SOVIET BLOC:
PRODUCTION TRENDS AND 1957 POTENTIAL*
Summary and Conclusions
From 1948 to 1951, gross national product ofthe-.USSR grew at an
average annual rate of 10 to 11 percent, as compared with a rate of
about 5 percent in the US. It is estimated that from 1951 to 1957
gross national product of the USSR will rise by 35to 50 percent, or
at an average annual rate of 5 to 7 percent, to a level nearly
double the prewar level.
From 1951 to 1957 the Soviet policy of diverting an ever larger
share of resources to investment and defense will continue, with
consumption probably increasing by about one-quarter, investment by
one-half to two-thirds, and resources allocated to military uses by
at least three-quarters.
From 1948 to 1951, industrial output in the USSR rose by about
60 percent, an average annual rate of growth of-about 17 percent as
compared with a US industrial rate of growth of 4.5 percent. It
is estimated that from 1951 to 1957 industrial output in the USSR
will rise by nearly two-thirds, or at an average annual rate of 8 to
9 percent, to a level more than 2-1/2 times the 1948 level.
Defense prodqction in the USSR increased from 1948 to 1951 at an
accelerating rate until it comprised about one-fourth.of the total
Soviet industrial output in 1951. It is estimated that the value of
defense production in 1957 will be about 230 billion rubles (1948
prices), probably the equivalent of between $16 billion and $32
billion. This value is about 2-3/4 times as great,as the value of
defense production in 1948 and more than one-third greater than in
1944, the peak war year for defense production.
If economic planning in the USSR is reoriented toward war
mobilization, it is estimated that, by cutting investment and con-
sumption, it would be possible to increase the value ,of Soviet defense
* This report contains information available as of 1 February 1953.
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production in 1957 to about 725 billion rubles, or almost 60 percent
of gross national product. This value is probably the equivalent
of between $50 billion and $100 billion. It is about 4-1/4 times
as great as Soviet military production in 1944, the wartime peak.
It is estimated that agricultural output, which did not recover from
war damage to equal the levels of the late 1930's until 1950, will
further expand by about 15 to 25 percent between 1951 and 1957.
The pattern of total Soviet Bloc economic activity has conformed
closely to postwar activity of the USSR, even though growth of the
Satellite energy, agriculture, and consumer goods sectors has lagged
behind Soviet growth in these sectors and the Satellite nonferrous
metals sector has exceeded the Soviet.
The Soviet Bloc economy probably will experience a slightly slower
economic expansion between 1951 and 1957 than will the economy of
the USSR, reflecting both the greater limitations to Satellite
development of agriculture and several industries and the Kremlin
policy which concentrates Bloc military production in the USSR.
If economic planning in the Soviet Bloc is reoriented toward war
mobilization, it is estimated that it would be possible to increase
the value of Bloc defense production in 1957 to about 925 billion
rubles, probably the equivalent of between $65 billion and $130
billion.
I. Postwar and FUture Growth of the Soviet Economy.
Intensified industrialization of the USSR was begun with the
introduction in 1928 of the first of the Five Year Plans. During the
period of the first two Five Year Plans (1928-37), the average annual
rate of growth for gross national product was nearly 7 percent,* a
rate much higher than for all other major powers during the same
period. Even the rapid growth in Japan prior to World War I did not
exceed this rate, and neither the US nor Germany has ever maintained
such a high rate for a comparable period. The last prewar year
devoted primarily to industrial expansion was 1938. From then until
World War II, defense considerations demanded an increasingly larger
share of the country's resources. As defense outlays mushroomed,
* Growth rates are calculated on a compound basis.
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investment activities were curtailed, and industrial expansion
nearly ceased (see Appendix A, Chart 3). Following the German in-
vasion, losses of territory and destruction from war drastically
reduced industrial and agricultural output. By 1944, gross national
product was only 70 percent of the 1940 level.
A. Postwar Era.
The postwar recovery of the Soviet, economy was rapid. By
1948, prewar levels had been regained, and, by 1951, gross national
product was about one-third* greater than in 1948. During this 3..
year period, while Soviet gross national product was growing at an
average annual rate of 10 to 11 percent, US gross national product
was growing. at a rate of about 5 percent.
The high postwar rate of growth in the USSR has been the
result of a number of factors, including the f011owing:,
1. The intensity and direction of investment have been
planned to promote rapid industrial expansion.' In-1948 the USSR
was devoting about 24 percent of its gross national product to
gross investment.** By 1951 the investment share had risen to about
27 percent. In contrast, gross investment in the US accounted for
only about 20 percent of gross national product. in both 1948 and 1951.
Moreover, because of the differences in the stock and age structure
of capital in the two countries, a much larger portion represents net
investment in the USSR than in the US. The Saviet,pattern of invest-
ment emphasizes producer goods industries, particularly the metals
and metal products industries, whereas in the US a larger proportion
of investment is made in consumer goods industries, housing, .and
public works.
2. During the war years, priority was given to expansion
of metals production in the Urals and West Siberia. When the
* Statistics relating to the postwar era are. ORR estimates (in
and are subject to
errors discussed in Appendixes B and C. For comparison of ORE
estimates with official results of Soviet _Plan fulfillment in 1952,
see Appendix F.
** Gross investment includes capital replacement as well as net
increases in capital.
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metallurgical plants in areas occupied by the Germans were recovered
and reconstructed, the Russians possessed a ferrous and nonferrous
production capacity far larger than prewar capacity.
3. The USSR received substantial amounts of industrial
plant and equipment in the form of war booty and reparations.
4. Aid received from the up and the UK provided the USSR
with prototypes Obodying the most advanced Western technical
developments.
5. Vocational and professional training has been heavily
stressed with resulting benefit to productivity. The skilled
labor force* increased by about 30 percent from 1948 through 1951,
although the total population rose by only about 5'percent.
B. Prospects for Future Expansion: 1957.
It is estimated that in the 6 years from 1951 to 1957
gross national product of the USSR will rite by 35 to 50 percent,
or nearly to double the prewar (and 1948) level. On the basis
of this projection, the average annual rate of growth would be
about 5 to 7 percent as contrasted with 10 to 11 percent for the
period 1948-51. In comparison with the expected annual rate of
growth of about 3 percent** for the US, however, the Soviet rate will
remain remarkably 1114h. The projected annual rate of growth for
the USSR is slightly less than that for the entire period from 1928
through 1940.
Among the explanations for the anticipated decline in the
growth rate are the following:
1. The windfall factors inherited from World War II are
no longer present, the flow of reparations has been moderated, the
* Defined as labor given special vocational training and possessing
higher qualifications. For a breakdown of the labor force, see
Appendix E, Table 4.
** See US Department of Commerce, Markets after the Defense Ex-
pansion, 1952; also the President's Materials Policy Commission,
Resources for Freedom, 1952. All estimates of future US economic
activity presented in this report are ORB estimates based upon trends
predicted in these two documents.
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effect of the wartimer.enlarged,metals base,lias:been'realized, the
'.skilled labor Torce is increasing at a mbremoderatarate,.. and the.
benefitS' from borrowed technologYare-diMinishihg:,.
2. In agriculture and in many branches of4ndustry,
annual growth probably will, on the avetagei,beconstant in absOlute
terms; hence, as the base becomes larger, the,percentaze'rate will
fall;
3. As an economy matures, the marginal productivity of
investment outlays can be expected to-decline: In addition, a
larger proportion of investment: outlays must be used for capital
replacement.
4. Since annual increments to the unskilled labor force
have been large in the past and the reserve of unemployed individuals
has declined to relatively small proportions, annual increments in
the unskilled labor force probably will fall off during the period
1951-57.
Even though factors contributing to'highrates of growth
are no longer present, the willingness of the Soviet leadership to
devote a large, and annually increasing, proportion of Soviet re-
sources to investment' purpoSes should sastain_growth rates higher
than those of Western econOmies.
C. TtendS" in Composition of- Gross?National'Product.
Gross national product is generally expressed in terms of
either origin or use. In the first case, gross national ptoduct
is broken down by sector of origin, such as industry, agriculture,
transportation, construction, or services; and in the second case,
it is broken down into its final uses, such asconSumption, invest-
ment, defense, and government administration. These breakdowns
represent opposite sides of the same coin and analyze the same
aggregate figure.
'Changes over time in the relative shatesofgross national
product originating in-different sectors provide a rough guide to
changes in the-structure of the SoViet economy. Percentage break-
downs of gross national product by origin Are hownA.nChart,1.*
The changes' in structure reflect the"genetally increasing Soviet
industrialization.
* Following p. 6.
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The breakdown of Soviet gross national product by final use,
shown in Chart 21* provides indications of broad economic intentions
and shifts of emphasis over time. Although gross national product
in 1948 was approximately at the same level as in 1940, drastic
changes had taken place in the use pattern. Particularly striking
was the relative diversion of resources from consumption into invest-
ment channels. Consumption had fallen from about 65 percent to
about 58 percent of gross national product, and gross investment
had increased from about 16 percent to about 24 percent.
Even with a large.incresse in the US defense sector by 1951,
the consumer share of gross national product was much larger in the
US than in the USSR. Both defense and investment accounted for
considerably smaller shares in the US than in the USSR. The small
share of Soviet gross national product allotted to consumption in-
dicates the willingness and ability of an authoritarian government
simultaneously to improve its military position and to expand its
productive potential at the cost of depressed living levels for its
citizenry. The contrast between US and Soviet practice is even more
sharply illustrated in absolute terms, since the US gross national
product in 1951 was probably three to four times Soviet gross
national product.
During the period 1951-57 the Soviet, policy of diverting
an ever larger share of resources to investment and defense will
continue, though at a decelerated pace. Consumption probably
will increase by about one-quarter over 1951, investment by one-half
to two-thirds, and resources allocated to military uses by at least
three-quarters.
II. Soviet Industry.
A. Postwar and Future Growth.
1. Postwar.
During the 3-1/2 years following the end of World Wax II,
industrial activity in the USSR was devoted primarily to restoration
of facilities and to recovery from the low production levels of the
war years. AS might be expected in such circumstances, industrial
expansion was rapid. By 1948, aggregate industrial output had re-
gained its 1940 level (see Appendix A, Chart 3). The degree of
* Following P. 6.
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GROSS NATIONAL PRODUCT BY
SECTOR OF ORIGIN, US AND USSR
USSR 1948
Industry
36.2%
Agriculture
23.4%
Cons5t.r6uzctio4in
Transportation
8.3%
Services*
21.9%
----Trade 3.6%
Communication 1.0%
Agriculture 7.7%
Construction 5.4%
Transportation 5.1%
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USSR 1957
Industry
48.8%
Construction 5.6%
u. 'tire
Services*
15.7%
\--Trade 2.2%
Agric
17 8
Transportation 8.8%
US 1951
Communication 2.9%
GR1336 CIA, 4-53
Communication
1.1%
*Services comprise social services,
personal services, military services_
and government administration.
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CHART 2
SOVIET GROSS NATIONAL PRODUCT BY FINAL USE
For Selected Years
DEFENSE
GROSS INVESTMENT
GOVERNMENT ADMINISTRATION
PERSONAL AND COMMUNAL CONSUMPTION
Totals and components for all years through
1951, though derived by conceptually sound
techniques were computed from incomplete data.
They, therefore, represent nothing more than ap-
proximations. The clerivaton of i 9.57 estimates
is explained in Appendix D.
300
3%1
1928
3%
545
(Billions of 1948 Rubles)
640
3%
450
860
/957 allocation as-
suming continuation
of 1952 cold war
conditions.
GR1337 CIA, 3-53
1944 45 46 47 1948 1951 1957
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/957 allocation as-
suming conversion
to full-scale mobili-
zation in preparation
for global war.
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recovery was by no means uniform for all sectors. Whereas production
of producer goods in 1948 was about 4 percent above.its prewar level,
production of consumer goods was about 13 percent below prewar.
Industrial output rose by almost 60 percent from 1948
to 1951. The average annual rate of growth for these 3 years was
about 17 percent. Although the growth rate declined each year
after 1948, it was still high in 1951 (about i1- percent) by most
standards of comparison. During this period the average annual rate
of US industrial growth was 4.5 percent. The high priority
assigned in the USSR to producer goods and military end items continued.
Production of producer goods increased by about 56 percent, to:a level
about three-quarters higher:than prewar; military end items by about
93 percent, to.a level two-thirds higher than prewar; and consumer .
goods by about 36 percent, to a level about one-fifth higher than
prewar.
2. Prospects for Future Expansion.
It is estimated that industrial output in 1957 will be
nearly two-thirds greater than in 1951. This would be morethan
2-1/2 times industrial output in 1948. The decline in the rate of
industrial growth which appeared following l948prObably will con-
tinue in the 6 years after 1951. For the latter:Teriod the average
annual rate of growth of industrial production is estimated at 8 to
9 percent, falling from about 10 percent in 1952 to .about 7 percent
in 11957. This estimated rate would be slightly higher than the
average for the entire span of 1928-51, although much lower than
the 17 percent average for the 1948-51 period. .The effects of many
of the same factors and forces which reduced the annual rate of
growth from 19 percent in 1949 to about 14 percent in 1951 will
continue, though with reduced impact, to lower the growth through-
out the period, of this estimate.*
The differential pattern of growth rates projected for
the period 1951-57 does not differ markedly in structure or in
degree from the pattern of the postwar period. Industry will grow
more rapidly than agriculture. Within industry the previous priority
* These estimates are believed to be accurate within 1 percentile.
For example, the 8.5-percent average is probably no greater than 9.5
percent and no less than 7.5 percent.
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given to producer goods and military end items probably will be re-
tained. Although production in these categories probably will
increase by about two-thirds and nine-tenths,. respectively, production
of consumer goods probably will rise by only one-third.
B. Producer Goods and Services.
1. Pattern of Growth.
The pattern of growth rates within the producer goods
sector is changing, In the periods before and after World War II)
production of machinery and equipment grew at a faster rate than
the output of energy and basic metals. This relationship probably
will be reversed in the years following 1951. The prewar pattern was
normal for a maturing industrial economy, and, in the early postwar
period, machinery and equipment were required for restoration of
industry. The future emphasis, however, probably will be on expanding
metals production, particularly production of aluminum for aircraft
and of steel for military use.
2. Energy Industries.
Energy output expanded steadily in the prewar period
(see Appendix A, Chart 4). After the war the expansion was resumed.
By 1948, energy output was about 12 percent above prewar, and in
1951 it was about 42 percent above the 1948 level. During these post-
war years the annual rate .of growth was about 12 to 13 percent. This
rate is more than double the US rate for the same period, although
absolute levels of energy output are still several times higher in
the US than in the USSR.
Between 1951 and 1957, energy output is likely tO in-
crease by 65 to 70 percent, a growth more than twice that predicted
for the US. In the USSR as in the US, the largest gains will be in
petroleum and electric power. These estimates assume that Plan goals
will be fulfilled, that new oil fields will be developed, that new
refinery capacity will be completed, and that the large hydroelectric
stations under construction will be opened on schedule.
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3. Minerals and Metals Industries.
- Production of minerals and metals, in addition to output
of the energy.industries, is generally recognized to be an indicator
of-An.economy's basic industrial.progress. If this criterion is
used, the growth of Soviet industry has been impressive (see Appendix
A, Chart 5). Production of ferrous metals in 1951 was seven times
production in 1928 (see Appendix A; Chart 6);. and the nonferrous in-
dustry, which started from -a smaller base; has developed even more
rapidly (see Appendix A; Chart 7).
By 1948, production of the metals industries exceeded
prewar peaks. From 1948 to 1951, production of'ferrou6 Metals in-
creased by about 61 percent and production of. nonferrous metals by
about 33 percent. These rates of growth are both approximately
2-1/2 times the rates for the same industries in the US during the
period.
Rapid growth of the metals industries will continue_
through 1957. Production of ferrous metals is likely to increase an
additional 55 to 65 percent above 1951 levels, and production of
nonferrous metals, an additional 80 to 99 percent, with 1957 output,
in both industries being approximately 150 percent higher than in
1948.
If these estimates are-correct, in 1957-the US
superiority over the USSR. in output of metals, 'althOtigh still large,
will have been at least relatively reduced: For example, US steel
production in 1951-was 3.1 times Soviet production, whereas US-pro-
duction in 1957 will probably be only 2 to 2-1/2 times Soviet pro-
duction.
4. Machinery and Equipment Industries.
Prewar growth of the Soviet machinery and equipment
industries (see Appendix A, Chart 8) was, much more rapid than
general industrial growth. Nevertheless, throughout this period,
there was a heavy reliance on imports to supplement Soviet output.
Postwar growth was also rapid. By 1948, output ,was 28 percent above
the prewar peak,. and in the three subsequent years_ it increased
another 89 percent.
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Growth of the industries between 1951 and 1957 is estimated
at a significantly slower rate than for the postwar period before 1951.
Production of automotive equipment, railway equipment, and ships (see
Appendix A, Charts 9, 10, and 11) will nearly level off during this
period as inventories of these items become sufficient for the economy's
requirements. Only the metalworking machinery, machine tools, electrical
machinery, and electronic equipment industries (see Appendix Al Charts
12 and 13) are expected to grow at rates significantly higher than
the general advance as a consequence of increasing defense requirements
and perhaps also of Satellite industrial requirements.
5. Chemicals Industry.
The chemicals industry (see Appendix Al Chart 14) is
another Soviet industry whose production grew rapidly as the economy
matured. In 1948, the benchmark year for industrial recovery from
the war, production of chemicals exceeded its prewar peak output by
about 25 percent and, in the three subsequent years, increased an
additional 74 percent.
The chemicals boom will continue, with growth from 1951
to 1957 estimated at 90 to 100 percent. That this rate is one-half
again as high as the rate of general industrial growth is probably
explained in part by increasing military uses for chemicals.
6. Forest Products and Construction Material Industries.
Both the forest products and the construction materials
industries were among the most important industries existing when
the First Five Year Plan (1928-32) was begun. From 1928 to 1951, a
year in which production.was still below the prewar Peak, the forest
products industry was the most backward among all Soviet industries
(see Appendix Al Chart 15). The slowness in growth reflects the
consistent failure, the causes of which are not known, to meet Plan
goals and the conversion of the economy to other types of building
materials. Its estimated growth from 1951 to 1957 is one of the
lowest in the economy.
Advance in output of construction Materials was large
during the 1930's until in 1938 the armaments program reversed the
trend (see Appendix Al Chart 16).: Postwar growth was rapid, with
output about 41 percent higher in 1951 than in 1948. Estimated
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-1957 output is 75 to 85 percent above 1951, reflecting the belief
thata vast construction program will be continued.
C. Transportation and Communications.
In the period of prewar industrial expansion the value of
Soviet rail and water freight traffic. (see Appendix A, Chart 17) in-
creased severalfold; at a rate faster than the general industrial rate
of increase. It.was an era of extensive railway construction. After
the war, restoration of service was rapid, even though damage to
transportation facilities had been extensive. The value of freight_
carried in 1948 exceeded the value of the prewar peak year by about -9
percent.
The increase of approximately 50 percent in'the following 3
years was slightly lower than the general industrial increase.
During the period 1951-57 a further increase of about 33 to 40 per- .
cent is estimated. .That this rate of. increase is about one-half the
estimated rate for general industrial-expansion during the period
probably indicates (1) that rail and water _facilities? are now adequate
for industrial requirements; .(2) that internal:transportation will not
constitute a restriction, to industrial growth (otherwise, planned ex-
pansion of. freight haulage would be higher); and (3) that there will
be an increase in freighting by truck.
The communications industry (see Appendix A,-Chart 18), which
accounts for about 1' percent of ,gross national product) has expanded
since 1927 at rates parallel to the rates of general industrial ex-
pansion.. Expansion from 1951 to 1957 is estimated at .50 to 60 percent,
a rate. again parallel to the rate of general expansion.
D. Consumer Goods.
Output of Soviet consumer goods* was not..much larger in ,1948
than it had been in 1928 (see Appendix A, Chart 3). This slowness in
* Changes in the level of output of consumer goods should not be
equated with changes in the standard of living, even though the former
is a large component of the latter. Other components, such as
housing, medical service, education, working conditions and hours, and
household services, also greatly influence living standard measurements.
Since research by ORR on these elements is inadequate, no estimates on
living standards can be formulated.
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growth resulted not only from economic planning that emphasized invest-
ment and military output regardless of poor living standards but also
from the close relationship of agricultural to consumer goods output.
Although law as compared with other industrial goals, Plan goals for
consumer goods were consistently underfulfilled. As shortages pf in-
put items arose, the consumer goods industries were the first to be
denied their requirements. Chaos in agriculture during the First and
Second Five Year Plans also had a depressing effect on output of con-
sumer goods. At the low point in 1933, output of processed foods
was about one-half what it had been in 1928, though by 1938 it had
virtually recovered to 1928 levels (see Appendix Al Chart 19).
Because output of industrial crops improved in the prewar period
(contrary to trends in food crops), output of the light and textile
industry (producers of such goods as textiles, textile products, and
boots and shoes) increased steadily until 1940, when it was about
88 percent above the 1928 level (see Appendix A, Chart 20).
Restoration of the output of consumer goods immediately
after the war was retarded by the poor recovery of agriculture.
Thereafter, in the years from 1948 through 1951 -- all good crop
years -- significant gains were displayed. Food processing in 1951
had nearly recovered its 1927.,28 level) and output of textiles and
footwear was about 27 percent higher than in the prewar peak year of
1940.
It is estimated that output of processed foods will rise
between 1951 and 1957 by aboutone-third and apparel and footwear
also by about one-third.* Judged by past performance in this
sector of the economy, these are Ampid rises. If these rises are
achieved, this period will be the first in which per capita consump-
tion of consumer goods will have risen substantially above 1928
levels.
III. Soviet Defense Industries.
A. Past Trends in Production.
The production of Soviet defense industries** does not ex-
hibit the secular growth trends evident in other Soviet industries.
* For a discussion of the difficulties in estimating growth of out-
put of goods, see Appendix DI Section 5.
** By the expression "production of defense industries" is meant the
products of the economy flowing from industrial facilities to the
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Instead, its fluctuations have reflected changes in external political
relations of the USSR and assessment by the Kremlin of the likelihood
of Soviet involvement in hostilities. In 1927 the defense industries
were almost nonexistent. Even with a sevenfold increase in 10 years,
defense production in 1937 was only about one-eighth of total industrial
production In the next 3 Years the Kremlin prepared for the forth-
coming war, and defense production more than doubled. This achieve-
ment.was made possible by reallocating resources away from investment
and consumption (see Chart 2*). In 1940, defense production accounted
for almost one-quarter or total industrial output.
Despite territorial losses and the destruction of war,
defense production in ,1944 was about 78 percent higher than in 1940,
when more than one-half of total Soviet industrial activity was
being channeled into output of military end items. As total in-
dustrial output had fallen to about 79 percent of the prewar level,
the diversion of resources to defense production was even more re-
markable.
Demobilization of industry after the war was never so
complete in the USSR as in the other major powers. Contrary to
trends elsewhere, Soviet defense production is believed to have ex-
panded from 1946 to 1948.** In the three subsequent years, defense
production is estimated to have increased at an accelerating rate
as follows: 21 percent in 1949, 22 percent in 1950, and 30 percent
in 1951. The larger increase in 1951, when one-quarter of total
industrial output consisted of defense production, reflects the Soviet
reaction to the outbreak of hostilities in Korea.
armed forces. If, for instance, a particular plant produces both tanks
and tractors, that portion of the plant designed for tank produbiion is
(by this definition) part of defense industry, and the rest of it is a
part of the automotive equipment industry.
* Following p. 6, above.
** An independent index of military production has not been computed
for most years prior to 1947. However, the ORR index of industrial
output, which excludes military production, moves at the same per-
centage rate as the official Soviet index of industrial output, which
includes military production over the years 1946 through 1948. This
identical movement implies that military production increased at
the same percentage rate as other industrial output.
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B. Prospects for Future Expansion: 1957.
It is estimated that Soviet defense production will be about
81 percent larger in 1957 than it was in 1951.* If this rate of out-
put is achieved, the value of 1957 defense outlay (including services
such as troop pay and manitenance, as well as production of military
equipment) should be about 230 billion rubles (1948 prices), probably
the equivalent of between $16 billion and $32 billion.** This value
is about 2-3/4 times as great as the value of defense outlay in 1948
(measured in constant prices) and more than one-third greater than
the value in 1944, the peak war year for defense outlay.
C. 1957 Potential.
Estimates of defense production and defense outlay presented
in the preceding section and estimates of the future trends in
economic activity presented in I and II, above, are based on an
assumption that economic planning will continue to emphasize invest-
ment and improvement in living standards simultaneously with greater
military production. Implicit in this assumption are the following
additional assumptions: (1) that the Soviet Bloc countries will not
engage in further peripheral wars during the period of this estimate
and (2) that global war will neither break.out nor be considered
imminent by the Kremlin during the period of this estimate.
It is possible, however, that developments in the cold war
might result in a reorientation of Soviet economic planning toward
the maximum possible preparation for global war. If the Soviet
economy should be mobilized for war, far greater defense production
could be achieved than has been estimated. Drastic reductions in
consumption and investment could make available additional re-
sources for defense production.XXX
* The ORB estimate of 1957 defense production was derived by
extrapolating the trends of Soviet defense expenditures from 1948
through 1951.
** To obtain dollar figures, it was assumed that the ruble-
dollar ratio for valuing defense outlay is no smaller than 14 to 1
and no larger than 7 to 1 (figures rounded).
*** Gross national product would be affected by the difficulties
of such a conversion. Curtailment of investment and dislocation
during conversion would tend to reduce total output below levels
which otherwise would be attained. On the other hand, new resources
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It is estimated that both investment and consumption could be
cut by one-half prior to the outbreak of a war.* Such cutbacks
would release enough resources-to increase the value of Soviet
defense outlay to 725 billion rubles, or. almost 60 percent of gross
national product (see Chart 2**). This value is probably the
equivalent of between $50 billion and $100 billion.*** It is about
4-1/4 times Soviet military outlay in 1944, the wartime peak.
probably would be introduced into economic processes. These would
include the following: retired workers, wbmen, and school-age
youths; idle war plants and equipment; and stockpiled materials and
capital equipment. It is impossible to evaluate accurately the net
results of such changes. However, in calculating.the maximum re-
sources available for military purposes, analysis is greatly
simplified, and the likelihood of error is not substantially in-
creased if it is assumed that these two effects would offset each
other: that is, that gross national product in 1957 would be about
the same as predicted in I, above.
* Although consumption in time of war might be reduced to near-
starvation levels, there is little chance it would .be reduced 'more
than 50 percent prior to the onset of hostilities. With a 50-per-
cent reduction, output of consumer goods and services in the USSR
would fall to about the 1948 level, although, because of population
increases, per capita consumption would be lower than in 1948.
Whether reduction in investment would be extensive 'would depend on war
strategy. In general, the shorter the length of the anticipated War
and the smaller the anticipated destruction of Soviet industrial
facilities, the larger the reduction in total investment would be
during the period of preparation. If a war of less than 2 or 3 years'
duration were estimated, production of most producer goods could be
reduced to a small fraction of normal, construction could be curtailed,
and strategic stockpiles and working inventories reduced. Deferred re-
placement could be substantial. By such changes, total investment
could be halved.
** Following p. 6, above. These figures represent at best an order of
magnitude of maximum total availability of resources for military
production at the end of the period of this estimate. It is highly
improbable that the Kremlin would plan economic activity to iealize
this potential, for it would cause a subsequent deterioration in.in-
dustry that would weaken the long-run power position of the USSR.
*** Compiled by the same conversion ratios used in the preceding
section.
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IV. Soviet Agriculture.
The agricultural sector has not shared in the rapid growth of the
Soviet economy following 1927, and the value of agricultural output
in recent years has fallen to less than one-quarter of gross national
product (see Chart 1*).
A. Past Trends in Output.
Over the entire span of years from 1927 to 1951 there was
almost no increase in agricultural output (see Appendix A, Chart 21).
Until the mid-1930's, output was depressed by resistance to
collectivization. Although there was improvement from the mid-1930's
until the war, Plan goals were consistently underfulfilled. The only
significant gains were made in industrial crops (a small part of total
agriculture in the USSR), output of which in 1940 was 40 percent
greater than in 1928.
Prior to 1948, postwar recovery was hampered by adverse weather
and shortages of farm equipment. Not until 1950 did output equal the
levels of the late 1930's. As in the prewar period, postwar Flan
goals were not met, and the greatest achievements were in industrial
crops.
B. Prospects for Future Expansion: 1957.
Within the period of this estimate, several major factors
and forces will affect Soviet agricultural outputs in unpredictable
ways, making it impossible to estimate agricultural output with
confidence. The success of efforts to increase productivity through
increased mechanization and greater use of fertilizers and irrigation
is difficult to forecast. In addition, there is a possibility that
institutional arrangements will be altered drastically, and the
effects of such changes on output cannot be foreseen. For example,
collective farms and the open markets for peasants' surplus produce
may be eliminated.
The primary reason for believing that gains in agricultural
output will be modest as compared with industrial output gains is
that soil and climate impose severe limitations on development.
The best areas were already intensively cultivated before the First
* hollowing p.-61 above.
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Five Year Plan was inaugurated. The only lands not cultivated are of
marginal utility. Yields per acre can be improved, but only gradually,
with extensive use of fertilizers and expansion of irrigation
facilities. Availability of feed will place a ceiling on the in-
crease in livestock numbers.
The best possible estimate is that, aside from fluctuations
resulting from weather, agricultural output will increase by about
15 to 25 percent between 1951 and 1957,* with larger gains in in-
dustrial crops than in food crops and livestock numbers.
V. Growth of the Economy of the Soviet Bloc.
A. Postwar and Future Trends.
Although existing estimates of gross national product for
the Soviet Bloc economy** are of dubious reliability, it is possible,
nevertheless, to estimate output trends in major sectors and to
deduce that, in general, the behavior of Bloc economic activity has
conformed to the postwar economic expansion in the USSR.xxx From
1946 to 1951, Bloc output increased at a rate slightly lower than
that of the USSR. Comparisons of sectors, moreover, reveal that
growth of producer goods industries was more rapid in the Satellites
than in the USSR, whereas the growth of agriculture and the consumer
goods industries was slower.
* See Appendix D, Section 5, for a discussion of the problems of
extrapolating trends in agricultural output.
** The Soviet Bloc economy, as defined in this report, includes
the present Eastern European members and Communist China
beginning in 1946.
xxx For two reasons, Soviet Bloc indexes tend to conform closely to
Soviet indexes. First, for most commodities and branches, Soviet out-
put is several times greater than Satellite output, and most Bloc
indexes are therefore weighted heavily with Soviet output. Second,
where Satellite data were insufficient to construct Bloc indexes --
the construction equipment, metalworking machinery, agricultural
machinery, textile machinery, and defense industries -- it was assumed
In constructing major sector indexes that Satellite growth was equal
to Soviet growth.
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The Soviet Bloc economy probably will experience a slower rate
of economic expansion between 1951 and 1957 than will the economy of
the USSR. This estimated difference reflects the limitations to further
expansion of Satellite agriculture and consumer goods industries, an
increasing emphasis on exploiting natural resources in the USSR, and
the rapid expansion of defense production in the USSR.
B. Sector Trends.
Soviet Bloc industry has expanded at about the same rate as
Soviet industry during the postwar period. In 1951, Bloc industrial
output was about 61 percent higher than in 1948, whereas Bloc
agriculture expanded at a rate significantly slower than the Soviet
rate. Within industry the Bloc pattern of growth differed in
several significant respects from the pattern of Soviet growth. From
1951 to 1957, further changes in patterns of development are estimated.
The most significant elements among these Bloc-Soviet differences are
reviewed in the following paragraphs.
1. Satellite output of producer goods grew more rapidly than
postwar output in the USSR. This may be explained as an aspect of
reorganization along lines of Soviet-type planning. Soviet Bloc out-
put of producer goods increased by about 65 percent from 1948 to 1951,
whereas the Soviet increase was about 56 percent. The higher
Satellite rate of growth reflects a rapid expansion of the smaller
Satellite industrial base as it existed in 1948. Output of the Bloc
capital goods industry will increase by an estimated 55 to 70 per-
cent from 1951 to 1957, with the expansion of Soviet output of
producer goods estimated at 50 to 65 percent.
2. Output of energy increased more slowly up to 1951 in the
Satellites than in the USSR, a trend which will continue through 1957.
Soviet Bloc output of energy increased by about 39 percent from 1948
to 1951 as compared with about 42 percent in the USSR. It is estimated
that Bloc output of energy will increase by 40 to 45 percent between
1951 and 1952 as compared with an increase of 65 to 70 percent in
the USSR.
.3.. The postwar trend of increasing Soviet dependence on the
Satellites fpr tin, lead, zinc, and several of the Other nonferrous
minerals and metals probably Will be reversed by 1957, if the Soviet
industry meets its ambitious Plan goals. Soviet Bloc production
of nonferrous metals increased by about 44 percent from 1948 to 1951
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as compared with about 33 percent in the USSR. and, ,,by 1957, will have
increased by an estimated additional 75 to 85percent as compared with
an increase of 80 to 90 percent predicted for the USSR._ .
. 4. ,During the postwar reorganizationof the Satellite
economies, growth of the machinery and equipment industries was
significantly larger in the Satellites than in the USSR. From 1948
to 1951, Soviet Bloc output increased by about 98. percent as compared
with about 89.percent:in the USSR, and, by 1957, Bloc output will
have increased by an estimated additional 50 to Op percent as compared
with an estimated 45 to 55 percent in the usgR,,
5. Output of consumer goods has increased at a slower rate
in the Satellites than in the USSR. Under Soviet control the re-
latively high' proportionof production devoted to consumer goods in
the Satellites has been cut back. The slow growth of Satellite
agriculture, moreover, has precluded rapid expansion in the consumer
goods industries. These trends probably will conticue. Soviet Bloc
output of consumer goods increased by about 23 percent from 1948 to
1951 as compared with a Soviet increase of about 36 percent, and it
will increase by an estimated additional 25 to 30 percent by 1957 as
compared with an estimated one-third increase in the USSR.
6. In the intensely cultivated European Satellites, there
are only limited possibilities for increasing crop yields. Moreover,
the postwar reorganization of agricultural life along lines of the
Soviet model of the early 1930's has tended to disrupt Satellite
agricultural output. In the postwar years, output of food crops
failed to increase, and livestock numbers actually declined. In
Communist China the backward state of agricultural technology and
organization and the heavy pressure of population on land have
limited increases in output. 'or all these reasons, agricultural
gains in the Satellites were aEall in the postwar years, a period in
which Soviet agriculture exhibited large gains. Soviet.Bloc
agricultural output increased by about 5 percent from 1948,to 1951 as
compared with about 16 percent in the USSR, and it is estimated that
Satellite output will increase by ,an additional 10 to 15 percent by
1957 as compared with 15 to 25 percent in the USSR.
C. Soviet Bloc Defense Industries.
Trends in Satellite defense production cannot be satisfactorily
estimated. In this report it is assumed that defense production has
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increased at the same rate in the Satellites as in the USSR and that it
is a smaller component of total industrial production in the Satellites
than in the USSR.
If, in 1957, Satellite consumption and investment were reduced
by one-half during industrial mobilization for war -- reductions
similar to those estimated for the USSR in III, above* -- it is
estimated that resources valued at 250 million rubles would be released
to Satellite defense production. Total Soviet Bloc defense production,
under these assumptions, would be valued at 925 billion rubles,
probably the equivalent of between $65 billion and $130 billion.**
* These figures represent at best an order of magnitude of maximum
total availability of Soviet Bloc resources for defense production at
the end of the period of this estimate. It is highly improbable that
the Kremlin would plan economic activity to realize this potential,
for it would cause a subsequent deterioration in industry that would
weaken the long-run power position of the USSR.
** See III CI above, for a discussion of the conditions and problems
of industrial mobilization for war.
- 20 -
S-E-CR-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
S-E-C-R-E-T
APPENDIX A
PRODUCTION DATA: INDEX NUMBERS AND TREND GRAPHS
All the index time series presented in this report are incorporated
into Table 1,* which gives index numbers for the USSR and the Soviet
Bloc. Charts 3 through 21* portray graphically the same time series.
Along with the many time series, production curves of a few key
commodities have been graphed.
For comparative purposes, US data also have been plotted. In
several industries it was necessary to forego comparisons, because
US data in comparable units could not be obtained. No attempt has
been made in this report to interpret the comparative economic
positions of the US and the USSR or of the US and the Soviet Bloc.
Projections of US trends from 1951 through 1957 are ORE estimates,
though they conform to trends established in the President's
Materials Policy Commission report, July 1952.
Following p. 22.
- 21 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
TABLE 1
INDEXES OF PRODUCTION
(1948= 100)
USSR
SOVIET BLOC
SECRET
? v)
* Insufficient Data ".0 ?I .1)
t Insignificant Production % j3.1 /4?c, '43TP % ..?T,` ''ar 'D1:1 % '1' 136 'IP ?ts
.% to. i'.
Ir.
1 'ia % ?zir 1Dj? '43s '-'821
I MAJOR SECTORS
1 INDUSTRY -H.
44
37
49
49
52
51
55
63
72
86
89
82
95
93
97
101
76
52
46
47
80
53
68
81
81
100
100
119
119
137
139
150
159
227
256
70
80
80
100
100
120
120
140
141
155
161
231
252
A Producer Goods**
249
1
27
31
37
39
47
58
68
80
83
74
85
85
89
96
64
38
37
42
88
51
65
80
80
100
100
120
121
142
144
156
167
247
281
67
77
77
100
100
124
123
147
147
165
170
253
275
B Consumer Goods '
86
95
85
88
84
72
75
80
98
103
115
112
115
101
80
65
56
58
73
84
100
115
126
136
185
80
90
100
107
116
123
159
2 AGRICULTURE
106
103
99
89
87
85
87
101
103
122
108
108
114
111
91
85
85
85
91
96
100
105
110
116
144
92
95
100
100
103
105
121
3 TRANSPORTATION
21
25
30
34
38
38
46
57
72
79
82
87
92
102
50
56
68
70
75
79
100
117
134
149
202
73
79
100
115
132
148
208
4 COMMUNICATIONS
16
22
28
35
42
41
39
43
50
56
63
67
70
74
58
58
58
68
82
91
100
110
120
132
203
89
96
100
108
115
123
168
Figures in Bold Type Include Defense Industry; Other Figures Exclude Defense Industry.
II INDUSTRY
1 ENERGY
22
25
31
40
41
45
55
61
71
74
77
82
89
81
47
50
60
70
77
88
100
114
129
142
239
99
88
100
112
125
139
197
A Electric Power
8
10
13
17
21
26
33
41
51
57
62
68
75
78
52
57
62
68
74
86
100
118
141
162
321
75
87
100
116
136
156
295
B Solid Fuels
20
23
27
35
37
42
52
60
70
71
73
80
88
72
35
45
59
72
80
88
100
113
125
136
195
107
88
100
111
123
135
168
C R O. L.
40
47
59
76
73
73
83
86
95
101
103
102
106
109
75
57
61
67
74
88
100
114
128
140
273
79
89
100
114
126
141
265
2 METALS
16
21
24
23
27
35
51
64
81
80
87
88
92
71
43
46
54
67
74
84
100
117
137
153
256
68
83
100
118
137
155
251
A Nonferrous
*
*
*
*
*
11
17
27
35
39
45
56
61
65
59
54
64
69
78
90
100
113
124
133
245
69
86
100
111
125
144
261
B Ferrous
22
29
33
32
37
44
64
78
98
95
103
100
104
73
37
43
51
66
72
82
100
119
142
161
260
68
82
100
120
140
158
249
3 MACHINERY & EQUIPMENT
11
13
18
24
34
42
50
68
78
78
70
59
58
38
9
12
18
26
42
65
100
136
172
189
286
42
64
100
139
176
198
307
A Shipbuilding
81
91
99
107
116
123
128
127
121
113
105
96
86
79
42
44
77
88
94
97
100
103
104
107
124
90
94
100
109
117
128
176
B Bearings
t
t
t
2
6
15
30
40
49
53
55
60
77
43
34
77
85
87
55
77
100
128
166
202
330
52
72
100
130
176
216
374
C Construction Equipment
t
t
t
3
4
11
17
23
20
20
19
15
17
10
35
100
150
192
202
385
*
*
*
*
*
*
*
D Automotive Equipment
1
2
5
18
30
50
64
81
97
91
93
80
69
37
15
19
29
34
48
64
100
138
178
191
224
45
64
100
137
177
195
244
E Electrical Machinery
*
*
*
*
*
*
*
25
42
68
100
136
164
185
328
42
68
100
136
167
189
326
F Electronic Equipment
17
49
70
. 100
127
167
204
445
49
70
100
132
170
211
447
G Railway Equipment
26
31
39
50
49
54
70
103
78
79
72
64
65
55
0
0
0
1
26
64
100
140
168
183
226
36
62
100
149
177
205
253
H Metalworking Machinery
2
3
3
6
7
17
30
37
44
50
57
63
70
54
27
32
36
52
68
84
100
116
132
147
317
*
*
*
*
*
*
*
I Agricultural Machinery
1
2
14
60
65
58
59
112
226
237
130
70
79
39
0
0
0
4
16
34
100
180
292
336
527
J Mining Machinery
t
2
4
10
12
19
20
24
19
32
45
43
42
*
37
47
78
100
112
121
133
205
47
78
100
112
125
142
215
K Textile Machinery
f
t
t
f
2
13
20
29
34
36
45
54
64
32
0
0
0
0
14
53
100
155
180
190
289
L Machine Tools
3
7
12
29
32
32
37
43
57
64
95
97
83
62
18
25
37
40
53
81
100
119
133
137
256
48
.73
100
121
146
168
292
4 CHEMICALS
4
4
7
10
13
18
31
42
49
58
70
75
80
61
75
100
129
155
174
338
56
72
100
126
152
172
325
5 CONSTRUCTION MATERIALS
*
*
63
81
89
115
120
99
94
92
82
78
40
36
30
56
77
100
114
127
141
253
58
79
100
113
124
139
231
6 FORESTRY PRODUCTS
67
68
72
78
75
'79
84
88
98
105
117
124
132
92
69
57
56
62
81
91
100
105
117
122
160
81
91
100
105
116
121
154
7 FOOD PROCESSING INDUSTRY
143
159
125
112
93
75
79
89
110
109
134
117
121
124
101
86
74
74
90
89
100
113
122
135
176
95
97
100
103
110
114
129
8 LIGHT & TEXTILE INDUSTRY
58
65
68
72
73
71
70
72
88
99
104
108
109
88
68
54
44
46
59
78
100
118
130
138
188
62
81
100
112
120
128
179
9 DEFENSE INDUSTRY
7
52
115
205
79
100
121
148
193
368
III AGRICULTURE
1 FOOD CROPS & LIVESTOCK
106
103
99
88
86
84
86
100
101
122
107
106
113
110
91
86
86
85
91
97
100
105
109
. 114
141
92
95
-100
99
103
104
119
2 INDUSTRIAL CROPS
97
101
102
109
96
98
99
110
130
132
135
146
136
124
82
66
74
79
88
92
100
118
128
137
197
87
91
100
108'
(.122
132
181
OR 1329 CIA, 1-53
SPCPPT
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
e
250
200
50
0
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
CHART 3
INDEX OF INDUSTRIAL PRODUCTION
-
Including
Defense
Industry
/
-
\.
159
\--Excluding
Defense
Industry
Bloc index approximately
the same
as USSR
?I
?/
\?
t%
% .4
150
? 119
,
_
.,?*'%?
#.......N\-#??*".
/
d(
*/
..0"...
4/
%? ?44,
II
,?,
"*.
I1I
1111
1111
1111
1I
I I
1927
1930
GR1305 CIA, 12-52 (First Revisionl -53)
1935
1940
1945
Base Period: US, 1947-49=100
USSR, 1948=100
US
--- Bloc
USSR
For components of Index, see Appendix C.
SECRET
1950
256
227
145
00
1955 1957
300
250
200
50
0
1927
SECRET
INDEX OF PRODUCER GOODS PRODUCTION
Including
Defense
Industry
\
".---Excl
167
Defense
156
ding
Industry
4
Bloc index approximately
the same as
USSR
l'????
t
d \
?I
i ?\
?
?
/
is
.4,41.1"2.----------------
....N.
,???fts,
. N ??
/*
I
?
11111011.'
1111
/111
1111
11
'4?44.
_
11111111
....**
.N....''......."-
20
150
100
50
0
1930
1935
1940
1945
1950
281
247
151
00
1955 1957
INDEX OF CONSUMER GOODS PRODUCTION
_
Alliki
?/
?
?
?
\
."'??
S? #
/
123
.
/0 115
?...\
??.
...00.0*4\ /0..0'
v
_
1 i
???#
?
? ,,..).0"
?,??,..
1 i ii
i 11
1111
1
11
1111
11
1927
1930
1935
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
1940
1945
1950
185
59
140
1955 1957
00
50X1
250
200
50
0
1927
SECRE Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
CHART 4
ENERGY
INDEX OF ENERGY PRODUCTION
_
239
_
?
????
?
118
I#
I
142
145
10C
_
??? ...
..._
-".
?
.....?._ /
or. ".....?
.?
/
????
/
?? ??
.****
0.0.".......????
?
?
I
??, /

_
1 1
''''?
?
1
5,'
1
.._
?
1
1
../
1 1 1 1
1
1
1I
I1
1
1 1
1
1
1930
GR1309 CIA, 12-52 (First Revision1 -53)
1935
1940
1945
Base Period: US, 1947-49=100
USSR, 1948=100
US
Bloc
USSR
Range of probable
production (ORR Estimates)
For components of Index, see Appendix C
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
SECRET
1950
?
1955 1957
700
600
500
0
?..15 400
200
100
PRODUCTION OF COAL
(Anthracite and Bituminous)
e
II?
?
?
1, ?
See
.,,
,, 4,-,
,
,
/
, , SI
s, 1 532.0
III
S ?
t
,1e
li
350
/N
203
I
1927
1930
I
1935
I
1940
Plan
268
1945
1950
1955 1957
PRODUCTION OF ELECTRIC POWER
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
500
400
0
.0 300
d 200
100
PRODUCTION OF CRUDE PETROLEUM
?????-- -"'
?
%N../
???
e**
??? ???? ?
e
? .?
Plan
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
SECRET
a
300
250
200
150
100
50
GR1310 CIA, 12-52
CHART 5
INDEX OF METALS PRODUCTION
256
153
1927
1930
1935
1940
1945
Base Period: USSR, 1948=100
USSR
For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
Statistics not available for comparable US
index.
SECRET
1950
100
1955 1957
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
SECRET
300
250
200
150
--0?)
100
50
CHART 8
INDEX OF MACHINERY
& EQUIPMENT PRODUCTION
...?
?? ?
?
?,,
1?...........?.............89
??
?
t
?
s
I
?
aa
?
a
?
I
.
?
s
?
?
?
?
it
a
?
?
ii
?
?
S. ?
s*
....
i
,. **?
?.
1
?%
1
.........
??.....0
1 1 1
??
?.?s.
?? ? ?
1 1 1
,
?-
?
?
*
1
1 1
1
1
1
1 1 1
1 1
1927
1930
GR1318 CIA, 12-52 (First Revision 1- 53)
1935
1940
1945
Base Period: US, 1947-49=100
USSR, 1948=100
US
USSR
For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
SECRET
1950
286
165
100
1955 1957
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
Index Numbers
?
?
?
300
200
100
0
1927
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0 SECRET
CHART 9
AUTOMOTIVE EQUIPMENT INDUSTRY
INDEX OF AUTOMOTIVE EQUIPMENT PRODUCTION
_
224
_
1
?
?
?
II
I
143
191
>74
10
_
1
1
L.,_
I
I
I
I1
?
Ii
...
?.'" I
I
1
S
I
SI
I
I
I
.
1111
....-......./
t I
1
1
1
I
?
I
?
?
1111
1111
11
1930
1935
1940
1945
Base Period: US, 194749=100
USSR, 1948=100
US
Bloc
USSR
Range of probable
production (ORR Estimates)
For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
1950
PRODUCTION OF TRUCKS
1600
1400
1200
?z.l000
_
0
800
0
-c 600
400
200
0
4
I ?
It
I I I
I
t
P , I
It
r , I
I ? I
It I
I ? I
I ? I
I I
el ? I
.0". N.. 'I
?4
Bloc data insufficient
I I I i i I I I I J I i i i I I I I
0
1955 1957
Thousands of Units
1,700
1,337
375
Plan
420
I I
1927 1930 1935 1940 1945 1950 1955 1957
800
700
600
500
400
300
200
100
? 0
1927
GR1321 CIA, 12-52
SCCRFT
PRODUCTION OF TRACTORS
1930
1935
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
1940
1945
1950
1955 1957
50X1
Index Numbers
300
200
100
0
1927
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
CHART 10 SECRET
RAILWAY EQUIPMENT INDUSTRY
INDEX OF RAILWAY EQUIPMENT PRODUCTION
_
183
226
_
US index based
on freight cars
?
I s
I
I
I
?
?
''
105,.....--------
128
100
s
/
I
I
'`?
I
t
s
s
s
i
%
I
I
%,
I
IS
I ?
I ?
I N
I ?
.. meg' I
?
i I
? i
I I
I
I I
g 1??#?
I
?
I I 1
1
I
1
?# A,,
I
?I
?
?
5..-
I
. ?...
I
I
1111
?
I
II
I
s
*
a
Is
s
s
SI
I
it
;I-..
I
;
1111
11
GR1322 CIA, 12-52
1930
1935
1940
1945
Base Period: US, 1947-49=100
USSR, 1948=100
US
? Bloc
USSR
Range of probable
production (ORR Estimates)
For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
SECRET
1950
1955 1957
Thousands of Units
250
225
200
175
150
PRODUCTION OF FREIGHT CARS
USSRrl ni
an_ Bloc statistics are
125 equivalents of 2-axle units
100
75
50
25
131.0
4 I', s i
I I i 5, I s;
?,,
I ? 't
? ? is
S V
#,....,...
%,
1927
1930
1935
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
1940
1945
1950
a 95.9
1955 1957
?
400
350
300
250
-o
200
(i)
-13
--- 150
190
50
0
1
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
CHART 11 SECRET
SHIPBUILDING INDUSTRY
INDEX OF SHIPBUILDING
_
A
1
#
#
I
#
1942
1943
1944
1945
= 1,841
= 3,760
= 3,032
-= 1,938
t
I
I
I
I
?
I
I
I
I
I
I
I
I
I
I
I
I
I
I
?
?
/
/
/
/
/
/
/
/
/
?
/
I
I??
I
I
I
I
II
II
II
I
t
I
I t
?t
I t
I %
I t
I t
I
I
i
1
I
1107
124
10(
59,
_
II
IIII
?
?
/
//
II
I
% 4
II
1111
1111
I
t
I?
t
s
??
1
I
t
i
1
1
S
6
48
1111
11
1930
1935
1940
1945
Base Period: US, 1947-49=100
USSR, 1948=100
US
--- Bloc
USSR
Range of probable
production (ORR Estimates)
? For components of Index, see Appendix C
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
GR1323 CIA,12-52 (First Revision 1 - 53)
SPCPPT
1950
1955 1957
LD
500
1000
900
800
700
600
0 400
300
200
100
0
PRODUCTION OF MERCHANT VESSELS
A 1941 = 1,035
T 1942 = 5,671 t
1943 = 11,580
1944 = 9,339
1945 = 5,968
a
II
i ry
, / %
, %
..
--- N
\ i 7,1:
%
t
--- ;
,
\i?
// 'I, ?
1
%
, \ it I'
/ II
\VI I 1
1 i
I I
t ,
''...!
I I I
1927 1930
650
147
370
I I I I I I I I I I I I I
1935 1940 1945 1950 1955 1957
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Index Numbers
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VI..????
INDEX OF
AGRICULTURAL MACHINERY PRODUCTION
500
400
300
200
100
527
Statistics
not available for
comparable Bloc index.
336
100
1927
250
200
1930
1935
1940
1945
1950
1955 1957
INDEX OF
METALWORKING MACHINERY PRODUCTION
4
147
Statistics not available for comparable Bloc index.
100
50
TO
317
1927
1930
GR1319 CIA, 12-52 (First Revision 1-53)
1935
1940
1945
SECRET
1950
100
1955 1957
250
200
43
150
100
50
SECRET
INDEX OF TEXTILE MACHINERY PRODUCTION.,
190
Statistics not available for comparable Bloc index.
1927
250
200
50
0
1930
1935
1940
1945
1950
100
1955 1957
INDEX OF MACHINE TOOLS PRODUCTION 292
168
137
1927 1930 1935 1940 1945 1950
Base Period: USSR & Bloc 1948=100
USSR
----- Bloc
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256
100
1955 1957
For components of Index, see Appendix C.
Statistics not available for comparable
US indexes.
50X1
Index Numbers
300
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lailtIR I 13 SECRET
INDEX OF
ELECTRICAL MACHINERY PRODUCTION
328
250 ?
200
150
100
50
0
185
t
100
200
175
150
75
50
25
0'
INDEX OF
MINING MACHINERY PRODUCTION
133
I J
205
100
1927 1930 1935 1940. 1945 1950 1955 1957
INDEX OF
ELECTRONIC EQUIPMENT PRODUCTION 445
1927 1930 1935 1940 1945 1950
INDEX OF BEARINGS PRODUCTION
1955 1957
400
400
350
?
350
330
300
300
250
S 250
z
202
200
-415' 200
150
150
100
100
100
100
50
50
0
0
t
1927
1930 1935 1940 1945
1950 1955 1957
1927
1930 1935 1940 1945 1950
1955 1957
Index Numbers
GR1320 CIA, 12-52 (First Revision 1 - 53)
Base Period: USSR 1948=100
SECRET
USSR
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For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the Index of USSR production.
Statistics not available for comparable
US indexes.
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SECRET
CHART 15
INDEX OF PRODUCTION OF FOREST PRODUCTS
150
125
100
75
50
25
122
1927
GR1317 CIA, 12-52
1930
1935
1940
1945
Base Period: USSR, 1948=100
USSR
For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
Statistics not available for a comparable
US index?
SECRET
1950
160
100
1955 1957
50X1
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250
200
50
0
1927
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CHART 16
CONSTRUCTION MATERIALS INDUSTRY 25?
INDEX OF CONSTRUCTION MATERIALS PRODUCTION
253
_
_
_
...
?
....
e
141
116
142
10C
_
N
??.0#
......? I
%?./.
I
I
.,"..."*"...........,
?
......,..'
_
i
1
""??.%
1111
.......
? ... ...?-
?...???
III
1111
ILII
11
I
11
1930
GR1313 CIA, 12-52
1935
1940
1945
Base Period: US, 1947-49=100
USSR, 1948=100
US
Bloc
USSR
Range of probable
production (ORR Estimates)
For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
SFr-RFT
1950
1955 1957
Billions of Bricks
Millions of Metric Tons
20
15
10
5
SECRET
PRODUCTION OF UNGLAZED BRICKS
Bloc data insufficient
0 I I I I
1927 1930
II II i
1935 1940 1945
I I i i I I
1950 1955 1957
PRODUCTION OF CEMENT
80
70
60
50
40
30
20
10
0
S.
?
?
?
?
.......... ?????? ..= ..................
....""
I
?
....."
.."--
?
-.....
N.-- ---
.445
?
?
?
?
?
?
"-""-N,,,
4,
N-....._
-...N.,
...... "'"......
I 1 I I I
1927 1930 1935
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1940
1945
19.6
II
12.4
1950
1955 1957
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JCLINC I
200
150
50
GR1306 CIA, 12-52
CHART 17
INDEX OF TRANSPORTATION
_
149
_
...
I
II"
???
?.
?
?
"'"-?
:
_
1
?
??????..s?
?
.. 0/
.."
/
/
/
/
A.
4,------------------------------;
%Si
100
_
1 1
?
1
?-
?
I
..?
i
?

I
.., ...
i I 1 I
i i
I
i 1 1
i 1
1927
1930
1935
1940
1945
Base Period: US, 1947-49=100
USSR, 1948=100
US
- USSR
For components of Index, see Appendix C.
Index of Bloc transportation is not included
because it is approximately the same as
the index of USSR transportation.
SECRET
1950
202
22
1955 1957
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SECRET
CHART 18
INDEX OF COMMUNICATIONS
203
200
150
132
100
100
50
0
I
I
1927
1930
1935
1940
1945
. Base Period: USSR, 1948=100
USSR
For components of Index, see Appendix C.
Index of Bloc production is not included
because it is approximately the same as
the index of USSR production.
Statistics not available for a comparable
US index.
SECRET
1950
1955 1957
50X1
GR1307 CIA, 12-52
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200
150
50
0
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CHART 19
FOOD INDUSTRY
INDEX OF FOOD PROCESSING
_
-
_
yy0-.....
135
114
103
101
_
??.???'''''''?'.....
? .. -. ....
? ...
*L....."
.. ,.?......,.... ...
...
..." ..'
el
...
.0
.......
.. .....**
USSR and
from
from 19116
RI identical
.....oc i_entical
to /948
_
1 1
I I I I
1 1 1
1
1
1 1
1
I
I
I I
i I
1927
1930
GR1314 CIA, 12-52 (First Revision 1-53)
1935
1940
1945
Base Period: US, 1947-49=100
USSR & Bloc, 1948 = 100
US
? Bloc
USSR
Range of probable
production (ORR Estimates)
1950
176
129
1955 1957
3000
2500
c 2000
-E.-.
ii 1500
0
1000
500
SECRET
FISH CATCH PRODUCTION OF SUGAR
A //
I
I
I I
%
? I I /
Bloc data not available
0
1927 1930 1935
15000
12000
ki 9000
^ 6000
For components of Index, see Appendix C. 3000
SECRET
2,200
I I I III I I I i I I I
1940 1945 1950 1955 1957
PRODUCTION OF MEAT
t"
?
/?%% ??-?
\ 9,319
Plan
.5A85
0
1927
I
I
1930 1935
1940
1945
1950
I I
1955 1957
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Millions of Metric Tons
10
8
6
4
2
0
\
? Plan
3.88
1927
6000
5000
,S ^ 4000
? -CZ
- 3000
-Q 2000
1000
0
1927 1930
I I I I
? 1930 1935
I Ii I I I I I I i I I I I I
1940
1945
1950
PRODUCTION OF VEGETABLE OILS
//\J
/
\\//
1955 1957
5,388.3
I
1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 1 i1 1 1 1
1935 1940 1945 1950 1955 1557
50X1
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150
50
0
SECRET
CHART 20
LIGHT AND TEXTILE INDUSTRY
INDEX OF PRODUCTION
IN THE LIGHT AND TEXTILE INDUSTRY
_
.......? .0
/
?
/
138
128
/09
_
. ....ss
?
????? ?
? ?4,
a
??-?- i
a ?
a ? ?
v
..
i
i
ii
/
....... ...........
-..???
?
?
s
I
/
/'",..
? /
sir
10(
?
1
? ???\
.0%. ?
...,
US index is for the
I I I
textile industry only.
I I 1 I
I
I II
I
I
I I
I
1927
1930
GR1315 CIA, 12-52
1935
1940
1945
Base Period: US, 1947-49 7100
USSR & Bloc, 1948=100
US
Bloc
USSR
Range of probable
production (ORR Estimates)
For components of Index, see Appendix C.
SECRFT
1950
188
79
133
1955 1957
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PRODUCTION OF COTTON YARN
5000? 400
4000
3000
0
2000
--c
1000
IN%
tI ?,..%
/ ?
I ......? .0. e..* 2,185
....... ...
/ .... ...% ,
/ ? 1
.0,of v
,.?
0
1927
500
400
.0 300
200
-c
100
0
1111;111i!
1930
1935 1940
1945 1950 1955 1957
PRODUCTION OF WOOL YARN
?
?
1927
1 1 1 1 1 1 1 1
1930 1935
?.a
I F I
'
?
257
Plan
135
?
I
88
1940
1945
1950
I I I
1955 1957
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300
0
'4-- 200
,11
0
100
0
PRODUCTION OF RAYON
1927
800
600
1930
1935
1940
1945
1950
PRODUCTION OF BOOTS & SHOES
1955 1957
200
0
1927 1930 1935 1940
1945
1950
1955 1957
SECRET 50X1
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?
S-E-C-R-E-T
APPENDIX B
RELIABILITY OF PRODUCTION DATA USED IN CONSTRUCTING INDEXES
Each index in Appendix A is a time series indicating production
trends in a branch of industry or in a major sector of the economy
over a period'of years. Each branch index was constructed by
aggregating the value of output of major or typical commodities in
the branch. Even with this selective coverage it was necessary to
collect a vast array of output figures in order to make economy-wide
estimates. Production series for more than 125 commodities and
services were used in constructing Soviet and Soviet Bloc. indexes.*
To deal with the reliability of such a mass of figures, which is the
purpose of this index, necessarily involves a choice between a
comprehensive listing on 50X1
the one handland generalization from particulars, on the other. Be-
cause detailed documentation would be unmanageable in a report of
this size, the latter method was selected, even though it involves
loss of accuracy. 50X1
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1. Prewar Production Data on the USSR.
Although there is reason to question the accuracy of many prewar
Soviet statistics, those used in this report are believed to be
* The indexes on the USSR incorporate 109 industrial goods or groups
of goods, 13 agricultural crops, and 5 services over a 24-year period,
1927-28 through 1951. Thus, taking account of occasional omissions,
over 3,000 individual statistics were used. The coverage of the Soviet
Bloc indexes is for nine countries -- the USSR, seven European
Satellites, and Communist China -- aggregating the same commodities and
services but only during a 6-year period, 1946-51. Thus, with omissions,
the Bloc indexes were derived from over 6,000 individual production
statistics. The economic activity of Viet Minh and North Korea cannot
currently be measured; but even if measurable, their inclusion would
have little influence upon the Bloc indexes, because of the relative
smallness of both these countries.
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reliable. Soviet statisticians are known to have followed question-
able practices, particularly in constructing indexes which were
weighted in such a manner as to impart considerable exaggeration to
actual accomplishments. ORR has net, however, used Soviet indexes
in establishing prewar output data. The statistics used for this
period are, with few exceptions, official physical data: that is)
metric tons, individual units, or ton-kilometers. Statistical
collection techniques of the prewar period may have been relatively
undeveloped, but no intentional bias or serious distortion in these
figures is known.-
For 1938 and 1939, official statistics are scarce, and for 1940
there are almost none. The 1941 Plan, however, furnishes an excellent
means of estimating production in these years. The process of
interpolating provides estimates which, on the average, probably
have a low degree of error.
2. Wartime and Postwar Production Data on the USSR.
Wartime and postwar Soviet data are far more questionable. There
is little independent evidence available for assessing their accuracy.
Errors could be sizable and could have initiated a chain of erroneous
estimates on Soviet Bloc capabilities.
With occasional exceptions, production figures since 1941 are
based on official Soviet pronouncements, usually Plans, Plan
fulfillments, announced percentage increases over 1940, or percentage
Increases over a preceding year. They are frequently derived by
applying reported percentage increases in chain fashion to a re-
latively firm figure on physical production. Two questions regarding
the use of technique must be answered. First, have the Soviet
pronouncements been properly interpreted? Second, are official
pronouncements distorted for propaganda purposes?
Data released by Soviet authorities are purposely vague. Many
statements are subject to wide latitude in interpretation. In using
these materials, ORR has scrutinized them closely 50X1
50X1
official data were amalgamated with scraps of pUbliatiell information,
such as excerpts from newspapers and radio broadcasts. In many places,
estimates were made by interpolation or extrapolation of trends.
Other series were obtained by combining pieces of information on a
limited number of plants and models. For many commodities and branches,
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a
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this research has produced estimates believed, to be reliable; for
others, the margin of error is large. Conclusive appraisal of the
probable error in interpreting Soviet pronouncements must await
further research
With respect to deliberate diStortion, no conclusive answer is
possible. ORR may have erected a "paper economy." On this score it
would be fairly easy for the Soviet Bloc leaders to deceive the West
and their awn peoples. In announcing Plan goals and Plan fulfillments,
for example, every figure might be increased by some fraction, such as
10 or 25 percent. Such a deception might be practiced to create an
exaggerated impression of Soviet power and to justify to the Soviet
Bloc population their depressed living levels. Furthermore, the
possibility of detecting it, either in the West or below top administra-
tive levels in the Bloc, would be slight.
In the opinion of ORR?.however, there is'no,deliberate distortion
in most official Soviet pronouncements.*
One reason for believing that they are correct is their
consistency. Close scrutiny of official data indicates, for instance, ?
that reported steel production is not low when compared with reported
production of steel products. Similarly, the reported production
of crude oil appears-consistent with reported consumption of petroleum
products. Such consistency does not, of course, eliminate the
possibility of wholesale Soviet deception.
A second reason for believing that these Soviet figures are
approximately correct is their plausibility. Although the postwar
rate of growth of Soviet economy has exceeded normal rates of
growth in Western countries by large margins, unusual factors have
been involved. These factors are discussed in II, above.
Finally, a few production series derived completely independently
of official Soviet data-tend to confirm the estimated rapidity of
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_ _ _ ? _ _
of Soviet postwar industrial growth. The following are examples of such
series.
b. A plant-by-plant analysis of the heavy electrical machinery
industry of the Soviet Bloc V shows this industry's postwar annual
rate of growth to be 12 percent. The study comprised every known
major plant producing heavy electrical machinery in the Soviet Bloc
in 1951.
More than
1 year's production, however, could be estimated for only 6 of the
27 major producing plants. The analysis therefore provides a less
reliable indication of growth rates than does the analysis of the tire
industry.
c. A plant-by-plant analysis of the Soviet electron tube and
electric lamp industry12/ shows the annual increase in the value of
electron tube production to be from 20 to 40 percent during the past
few years and that of electric lamps to be approximately 11 percent.
The primary materials used in this report were
excerpts from Soviet newspapers, periodicals, and
radio broadcasts giving pieces of information about inputs, outputs, and
conditions of individual plants; and analyses of
Soviet and Satellite electronic products and electron tubes.
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50X1 -HUM
50X1 -HUM
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APPENDIX C
METHODOLOGY OF AGGREGATION
1. Production Indexes.
This appendix appraises the aggregation process employed to combine
the historical and projected estimates into production and gross
national product indexes.
a. Aggregation of Commodities into Industrial Branches.
The indexing technique employed in this report involves three
levels of aggregation. The lowest level of aggregation is concerned
with the construction of industrial and agricultural branch indexes
on the basis of separate commodity output figures. For example, given
physical output estimates of copper, lead, aluminum, and the like, how
did production of nonferrous metals as a whole vary from one time
period to another? The procedure used followed conventional indexing
technique. Each commodity for which production was estimated was valued
according to its 1949 ruble price quotation. The output of the commodity
for a single year was multiplied by its 1949 price to obtain value of
output. The same process was followed for subsequent years, using 1949
prices. The value figures for each year for all reported commodities
in the branch were then added to Obtain value of output for the portion
of the branch reported during that year. The year 1948 was selected
as the base year for the indexes. A time series was then derived by
dividing total value of output of the portion of a branch reported in
each year by 1948 value of output.
The commodity compositions of the industrial and agricultural
branch indexes are listed under 4, below. The price weights used to
convert the physical quantities of each commodity to value terms are
noted.
Certain technical problems arose in the preparation of the
indexes at this stage. For example, the wisdom of using 1949 prices
is open to question. The distorting subsidy element inherent in prewar
and perhaps in 1952 Soviet prices leaves only 1949 and 1950 prices as
those which bear any relation to real cost factors. Some academic
authorities engaged in Soviet research claim that 1949 prices over-
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compensated for the removal of subsidies and that 1950 prices were
set on a more realistic cost basis. If this argument were accepted
(though no substantive proof is possible) and 1950 prices were used,
the effect on the indexes would be minor, as prices were used as
weights only within branches. Unless there were marked changes in
relative prices between 1949 and 1950, the effects on any single
index would be minor. Cursory inSpection indicates no significant
change in relative price relationships. Therefore, the distortions
imparted to major sector indexes would be negligible.
The validity of using Soviet prices to weight Soviet Bloc
production indexes is also open to question. The assumption upon which
they were used was that the structure of relative prices in the
Satellites was the same as in the USSR. Although the reality of this
assumption cannot be absolutely verified, it is supported by the in-
creasing tendency of the Satellites to quote export prices in terms
of rubles. Furthermore, since well over half of the output of most
items originates in the USSR, the use of Soviet price weights is
realistic.
In several categories -- agricultural products, POL, railway
equipment, agricultural machinery, textile machinery, processed foods,
and textiles -- it was necessary to use US price weights as Soviet
price weights, since Soviet price data were unavailable. The
accuracy with which the substitute weights represent Soviet conditions
is unknown. Earlier comparison of US and Soviet relative prices for
like products indicates widedifferences in patterns. In any case,
any resulting relative price distortions would affect the aggregated
major sector indexes much less than the separate industrial and
agricultural branch indexes.
The choice of commodities in some of the indexes dan be
questioned on grounds of consistency. In most instances the aim was
to get as close an approximation as posible to a "value added"
measurement of total industrial production. This ideal was
approximated by obtaining gross value of end-product output. In
most indexes the components consisted of end products only. There
are, however, departures from this norm which can be rationalized for
institutional reasons. The ferrous metals index includes inputs of
alloying materials.* These have been included to take account of the
* See 4b (4), below.
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presence of quality steel in the rolled steel item given. Since no sep-
arate breakdown of ordinary and quality steel was submitted, alloying
elements were included as indicators of quality steel production.
Similarly, pig iron production was included to serve as an indicator of
iron castings production, not otherwise reported. The seemingly incon-
sistent inclusion of bauxite in the nonferrous metals index* was made
to permit the adjustment of nonferrous metals production to include only
the domestic portion of an item which is also imported in large
quantifies. Inclusion of the value of aluminum produced in the USSR
would overstate the value added by the Soviet industry by an amount equal
to bauxite imported.
Several of the indexes have special features embodied in their
construction. The transportation index components** are based on
weighted ruble-per-ton-kilometer values for rail and water transport.
The rail figure was derived from quoted costs of hauling several types
of freight traffic. For each type of freight the average distance of
haul for 1949 was secured from ORR transportation analysts. On this
basis a 1949 ton-kilometer charge was derived. For each type of traffic
the average ton-kilometer charge was weighted by the total tonnage of
that group carried in 1949. The sum of the latter products was then
divided by total tonnage carried to obtain the average ton-kilometer
rail charge. An analogous technique was used to derive an average
water-freightage figure.
The three components of the communications index*** are
weighted by charges for representative amounts of the particular
service. A representative quantum of service was derived by the ORR
analysts responsible for communications.
The electrical machinery index*XXX has no weights noted
except in the case of turbines, and the electronic equipment index *
has no weights at all. The production of electrical items was reported
directly in value terms by ORB analysts, as the heterogeneous nature of
their output did not make for meaningful physical quantities. There-
fore,one step could be omitted in the preparation of this index.
* See 4b (5), below.
-x--x- See 4a (8), below.
See 4a (9), -.below.
See 4b (10), below.
See 4b (11), below.
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Several of the industrial branch indexes are based on single
commodities or on single series.* The fundamental hypothesis assumed
in these cases is that total industrial output either varies directly
as the output of the single product, as in the case of excavators for
construction equipment, or varies as does production recorded in an
arbitrary system, such as "units" of sundry types of metalworking
machinery. The indexing process here is the simple one of converting
the physical production figures to relative terms.
The defense industry index was derived indirectly. No reliable
estimates of military production were available. As a substitute, the
military procurement components of Soviet defense budgets from 1947
to 1951 were used as a point of departure. 2/ Total military pro-
curement was assumed to correspond to total military production.
b. Aggregation of Industrial and Agricultural Branch Indexes
into Major Sector Indexes.
Since more comprehensive measures of economic capabilities
than indexes of separate industries are required, it was necessary to
aggregate individual industrial and agricultural branch indexes into
over-all industry and agriculture time series. The major sector
indexes thus compiled, together with their components and weights, are
listed under 4a below.
The industry series was constructed by weighting and
aggregating the indexes of output for industrial branches. The index
number for each industrial component for each year was multiplied by
* See 4b (1), (6), (7), (8), (13), and (17), below.
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its 1941 value added weight. For any 1 year the resultant products
of all Component industries were added. The 1948 sum was taken as
a base with a value of 100, and the sums of all other years were ex-
pressed as percentages of 1948.
In constructing the producer goods and consumer goods in-
dexes, it was necessary to include some industries in both indexes.
The basis for splitting the industry weight to fit it into both
major sectors was largely the use pattern
constructed from 1941 Plan data. y In the case of construc-
tion materials it was necessary to make an intuitive judgment.
The agriculture, transportation, and communications indexes
were compiled in a manner analogous to that used to obtain indexes
of industrial and agricultural branches (see la, above). Since these
sectors are less complex than industry, and since output data for
them were relatively complete, their activity changes can be computed
directly by using physical quantities and prices of their components..
The special weighting used in the transportation index has been
described in the preceding section.
Value added was obtained by adding together the payroll of an in-
dustry plus double its capital consumption allowance. In strict
statistical procedure, value added should include labor cost, plus
depreciation, plus profits. The arbitrary nature of Soviet industry
profits, however, made them invalid for this purpose. In order to
give some indication of services rendered by capital factors, the
depreciation element has been included as a reasonable substitute.
The official figures for depreciation allowance were doubled in order
to make them realistic, the official allowances being gross under-
estimations.
No payroll or depreciation figures were given for the various
machinery and metals fabrication industries, the group being treated
as a whole. The distribution of the machinery value-added total.
among its components was made in proportion to the share each con-
tributed to total value of machinery output in 1937. 18/ A rule-of-
thumb adjustment of these percentages was made in order to account
for shifts in machinery production between 1937 and 1941.
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The absolute value-added figures for each industry were then
expressed as percentages of gross national product. 2/ These:per-
centages are the weights used to construct the major sector industry
indexes.
At this level of aggregation the value-added weights employed
in the Soviet indexes could not be used in the Soviet Bloc indexes,
as the industrial structures of the Satellites do not resemble those
of the USSR very closely. To derive Bloc weights, a composite break-
down of the Satellite labor force was constructed from Polish, East
German, and Rumanian labor force information. The Satellite per-
centages were then combined with the Soviet proportions with a
weighting of 1 to 3, respectively, to produce the Bloc value added
weights.
The chief criticism of the weights used, other than a
questioning of the value-added concept employed, is the relevance of
1941 weights to a 1952 industrial structure. Undoubtedly, important
shifts in economic relationships occurred during the war, recovery,
and rearmament of this period. The crucial question for purposes of
this report is how a difference in weights would affect the direction
of the index. During the period there was a much greater expansion of
heavy industry than of consumer goods industries.* This differential
growth pattern means that heavier weights should be given to the fast-
growing sectors and smaller weights to the laggard industries. Unless
this adjustment is made, the over-all rate of growth is biased down-
ward, both by an understatement of the expansion effect of the rapid
growth of heavy industry and by an overstatement of the retarding
effect of the slow growth of consumer industry. It is difficult to
make quantitative adjustments, because the coverage of most sectors is
far from complete. All that can be contributed at present is a
qualitative statement that the major sector indexes are biased down-
ward. mall three periods under consideration the growth rates are
probably larger than the indexes indicate.
2. Gross National Product Indexes.
The higher level of aggregation involved combining major
sector indexes into a single index of gross national product. The
procedure used resembled that applied in the combination of industries
into major sector indexes. Each major sector index was given a value-
added weight
* See Appendix A.
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The gross national product index itself was constructed in the same
way as the major sector indexes: that is, by (a) multiplying the
weights by major sector indexes and (b) adding the products for all
major sectors for the years 1948 through 1951 and expressing the
results in terms of 1948. (See Table 2.)*
The construction index is based on
construction figures
These monetary 5UX1
magnitudes were then deflated by a construction price index. 21/ The
deflated time series is expressed in index form with the usual 1948
base. Both the original raw figures and the price index used to
deflate them have tenuous validity, but the resultant index does not
seem unrealistic in comparison with the industry and agriculture
sector time series.
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Since value added in both trade and services is almost
entirely a labor factor, it was deemed justifiable to measure
movements by employment in the sector, with a slight upward pro-
ductivity adjustment. The assumption of homogeneity of labor in the
services sector most likely understates the change in the levels of
activity, particularly in health and education.
A severe limitation to the validity of the gross national
product index lies in application of 1941 weights to the 1952 economic
structure. Some indication of the degree to which shifts occurred
between 1948 and 1951 in the relationship between major sectors is
given in Table 2. The changes taking place between 1941 and 1948
must have been equally significant. The downward bias of the gross
national product inaex arises from the same factors which affected.
the industry indexes. This bias arises from an understatement of
growth attributable to underweighting the fast-growing industry
sector and from an overstatement of retardation attributable to over-
weighting the declining agriculture sector. It is possible only to
indicate a qualitative adjustment of the statistics. The growth of
gross national product is understated, but not to a significant
degree.
Lack of information regarding the service and trade sectors
Made it impossible to construct gross national product indexes for
* Table 2 follows on p. 36.
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Table 2
Gross National Product Index for the USSR
1948-51, 1957
Sector !eight
1948
Sector
jndex
Weight x1948
Sector Index
1949
Sector Weight x 1949
Wax_ Sector Index
1950
Sector
Index_
Weight x 1950
Sector Index
1951
Sector
Index
Weight x 1951
Sector Index
1957
Sector
Index
Weight x 1957
Sector Index
Industry 36.2
100
3,620.0
119
4,307.8
139
5,031.8
159
5,755.8
256
9,267.2
Agriculture 23.4
100
2,340.0
105
2,457.0
110
2,574.0
116
2,714.4
144
3,369.6
Construction 5.6
100
560.0
111
621.6
122
683.2
137
767.2
190
1,064.0
Transportation 8.3
100
830.0
117
971.1
134
1,112.2
149
1,236.7
202
1,676.6
Communications 1.0
100
100.0
110
110.0
120
120.0
132
132.0
203
203.0
Trade 1/ 3.6
100
360.0
101
363.6
103
370.8
105
378.0
117
421.2
Services 1./ 21.8
100
2,180.0
104
2,2677.2
108
2,354.4
112
2,441.6
136
2,964.8
Gross National Product 13/
x Indexn
1948:
100
1949:111
1950:
123
1951:
134
1957:
190
(1EWeight48
liWeighto x Indexa)
Compound Growth Rate
11.0%
10.8%
6.0%
a. Based on ORR employment estimates. Productivity adjustments introduced.
b. Official gross national product indexes are as follows: 1948: 100; 1949; 117; 1950; 141; and 1951; 158.
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key years prior to 1948.
A rough check was made on the borrowed indexes
by using ORR index numbers for the producer, consumer, and military
goods subsectors weighted by the 1941 weights used to devise the
sector indexes.
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3. Breakdown of Gross National Product by Use.
National
economic aggregates rather than output were used as the basis for
constructing these figures. The 1957 percentages are based on
extrapolation of the 1948-52 trends of current ruble values of each
component on an arithmetic scale. An almost identical pattern
results if the extrapolations are based on data published in the
official Five Year Plan announcement, after the data have been
adjusted to account for conceptual differences in US and Soviet
national economic accounting procedures.
4. Index Components and Weights Used in Constructing Indexes.
a. Major Sectors.
USSR Soviet Bloc
Value Added Value Added
(1) Industry Index.
Industry)
Shipbuilding
0.9
1.3
Electric Power
2.2
2.7
Bearings
0.1
0.1
Light and Textile
Industry
10.3
5.5
Construction Equip-
ment
0.6
0.9
Metalworking Machinery
0.9
1.3
Machine Tools
0.4
0.6
Automotive Equipment
3.5
5.1
Agricultural Machinery
1.2
1.8
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(1) Industry Index.
USSR
Value Added
Soviet Bloc
Value Added
(% Industry)
(Continued)
Railway EquipMent
2.6
3.8
Mining Machinery
0.9
1.3
Textile Machinery
0.6
0.9
Electrical Machinery
1.4
2.0
Electronic Equipment
0.5
0.8
Chemicals
3.0
6.4
Forestry Products
11.5
5.6
Construction Materials
2.4
2.0
POL
2.2
1.2
Nonferrous Metals
2.9
1.9
Ferrous Metals
7.9
8.o
Solid Fuels
5.9
11.7
Food Industry
8.3
8.8
Defense Industry
18.3
13.0
(2) Producer Goods Index.
Shipbuilding
0.9
1.3
Electric Power
1.8
2.2
Bearings
0.1
0.1
Construction Equip-
ment
0.6
0.9
Metalworking Machinery
0.9
1.3
Machine Tools
0.4
0.6
Automotive Equipment
3.3
4.8
Agricultural Machinery
1.2
1.8
Railway Equipment
2.6
3.8
Mining Machinery
0.9
1.3
Textile Machinery
0.6
0.9
Electrical Machinery
1.4
2.0
Electronic Equipment
0.5
0.8
Chemicals
3.0
6.4
Forestry Products
8.7
4.2
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USSR Soviet Bloc
Value Added Value Added
(2) Producer Goods Index.
(% Industry)
(Continued)
Construction Materials
1.6
1.3
POL
2.0
1.1
Nonferrous Metals
2.9
1.9
Ferrous Metals
7.9
8.0
Solid Fuels
5.9
11.7
Defense Industry
18.3
13.0
(3)
Consumer Goods Index.
Electric Power
0.4
0.5
Light and Textile
Industry
10.3
5.5
Automotive Equipment
0.2
0.3
Forestry Products
2.8
1.4
Construction Materials
0.8
0.7
POL
0.2
0.1
Food Industry
8.3
8,8
(4) Energy Index.
Electric Power
2.2
2.7
Solid fuels
5.9
11.7
POL
2.2
1.2
(5) Metals Index.
Ferrous Metals
Nonferrous Metals
(6) Machinery and Equipment
Index.
7.9 8.0
2.9 1.9
Shipbuilding
0.9
1.3
Bearings
0.1
0.1
Construction Equipment
0.6
0.9
Automotive Equipment
3.5
5.1
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(6) Machinery and Equipment
Index. (Continued)
USSR Soviet Bloc
Value Added Value Added
(% Industry)
Electrical Machinery
1.4
2.0
Electronic Equipment
0.5
0.8
Railway Equipment
2.6
3.8
Metalworking Machinery
0.9
1.3
Agricultural Machinery
1.2
1.8
Mining Machinery
0.9
1.3
Textile Machinery
0.6
0.9
Machine Tools
0.4
0.6
(7) Agriculture Index.
USSR Soviet Bloc
(Dollars per Metric Ton)
Bread Grains
Other Grains
Rice
Potatoes
100.06
46.79
241.92
50.50
Horses
43.40
(pe'r
Unit)
Sheep and Goats
7.61
(per
Unit)
Cattle
117.37
(per
Unit)
Hogs
41.94
(per
Unit)
Cotton Lint
583.66
Wool
1,040.76
Hemp Fiber
603.20
Silk
6,416.55
Flax
866.90
(8) Transportation Index.
(9)
Railroads
Water Transport
(Internal)
Communications Index.
Telephone Subscription
Long-Distance Phone Calls
Telegrams
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(Rubles per Ton-Kilometer)
0.05
0.04
(Rubles per Unit)
500.0
5.5
11.0
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b. Industrial and Agricultural Branches. USSR Soviet Bloc
(1) Electric Power Index.*
Electric Power Generation
(2) Solid Fuels Index. (Rubles per Metric Ton)
Anthracite and Bituminous Coal
Lignite
Peat
125
33
11.9
(3) POL Index. (Dollars per Metric Ton)
Crude Oil 33.72
(Dollars per Thousand
Cubic Meters)
Natural Gas
ManUfactured Gas
(4) Ferrous Metals Index.
1.35
0.70
(Rubles per Metric Ton)
Manganese
1,760
Molybdenum
370,000
Tungsten
276,000
Metallurgical Coke
700
Pig Iron
476
Rolled Steel
1,200
Vanadium
10,300
Cobalt
48o,000
(5)
#
Nonferrous Metals Index.
Bauxite
Platinum Group
449
15.7 (Troy
Ounces)
Tin 105,000
Fluorspar 3,715
Index constructed on the basis of a single commodity.
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USSR Soviet Bloc
(5) Nonferrous Metals Index.
(Rubles per Metric Ton)
(Continued)
Primary Copper
7,100
Secondary Copper
5,000
Primary Aluminum
7,430
Secondary Aluminum
4,000
Lead (Refined)
4,025
Zinc (Refined)
3,040
Shipbuilding Index.*
Merchant Ships
Bearings Index.*
Ball and Roller Bearings
(8) Construction Equipment Index.*
Excavators
(9) Automotive Equipment Index.
(Rubles per Unit)
Trucks
33,000
Passenger Cars
24,000
Tractors
40,000
(10) Electrical Machinery Index.** (Rubles per Kilowatt-Hour)
Turbine Production
(Steam, Hydro)
Motors (Electrical)
Generators (Electrical)
POwer and Distribution
Transformers
Electric Lamps
150
* Index constructed on the basis of a single commodity.
** All.items except turbines reported in value terms.
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(11) Electronic Equipment Index.*
Radio and Television
? Receivers
Electron Tubes
Telephone and Telegraph
Equipment
Professional Electronic
Equipment
Electronics Components
Electrical and Electronic
Test Equipment
USSR Soviet Bloc
(12) Railway Equipment Index. (Dollars per Unit)
Steam Locomotives
Electric Locomotives
Diesel Locomotives
Freight Cars and Parts
Railway Passenger Cars
.and Parts
(13) Metalworking Machinery Index.**
Metalworking Machinery
(Other than Machine Tools)
119,000
177,000
161,000
2,000
'45,000
(Dollars per
(14) Agricultural Machinery Index. Unit)
Tractor Plows (Moldboard Type) 175
Combines ?2,500
Tractor Seed Drills 280
Tractor Cultivators 165
No Bloc Data
(15) Mining Machinery Index. (Rubles per Unit)
Coal Cutters
Coal Combines
Coal Loaders
Mining Locomotives (Coal)
39,800
77,000
50,000
31,000
All item reported in value terms.
-x-* Index constructed on the basis of a single commodity.
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(16) Textile Machinery Index.
Looms
Spindles
(17) Machine Tools Index.*
Machine Tools
(18) Chemicals Index.
Rubber Tires
Reclaimed Rubber
Sulfuric Acid
Nitric Acid
Ammonia (Synthetic)
Caustic Soda
Chlorine
Calcium Carbide
Benzol (Refined)
Toluol
Phenol (Refined)
Cresols
Xylol
Naphthalene
Synthetic Rubber
(19) Construction Materials Index.
Gypsum
Asbestos
Cement
Unglazed Brick
Flat Glass**
Index constructed on the basis
USSR
(Dollars per
Unit)
1,200
20
(Rubles per
670
3,620
Soviet Bloc
No Bloc Data
Metric Ton)
(per
Unit)
(per Long
Ton)
362
900
1,650
2,300
450
1,600
1,710
2,178
3,168
2,970
2,079
2,500
11,500 (per Long
Ton)
(Rubles per Metric Ton)
of a single
Not included in Soviet Bloc index.
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95
50,227
209
275 (per Thousand
Units)
14.5 (per Square
Meter)
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(20) Forestry Products Index.
USSR Soviet Bloc
(Rubles per Cubic Meter)
Timber (Pitprops)
98
Timber (Pulpwood)
85
Softwood Lumber (Sawn)
.1,121
Hardwood Lumber (Sawn)
423
Plywood
3,000
Fuelwood
46
(Rubles per Metric Ton)
Woodpulp (Mechanical)
940
Woodpulp (Chemical)
1,505
Paper Products (Other Papers)
1,000
Paper Products (Newsprint)
1,395
Paper Products (Paper Board)
2,120
(21) Food Processing Industry Index.
(Dollars per Metric Ton)
Fish Catch
250.82
Meat Production
1,307.57
Sugar (Raw Value)
157.95
Vegetable Oils
374.85
Animal Fats
725.76
(22) Light and Textile Industry Index.
Cotton Yarn Production
1,378.13
Wool Yarn Production
8,489.25
Rayon Production
2,208.60
Boots and Shoes Production
1,700.00
(23) Defense Industry Index.
(24) Food Crops and Livestock Index.
Bread Grains
100.06
Other Grains
46.79
Rice
241.92
Potatoes
50.50,
Horses
43.40 (per
Unit)
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USSR Soviet Bloc
(2)) Food Crops and Livestock Index. (Dollars per Metric Ton)
(Continued)
Sheep and Goats 7.61 (per
Unit)
Cattle 117.37 (per
Unit)
Hogs 41.94 (per
Unit)
(25) Industrial Crops Index.
Cotton Lint
Wool
Hemp Fiber
Silk
Flax
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583.66
1,040.76
603.20
6,416.55
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APPENDIX D
METHODOLOGY OF EXTRAPOLATION
This appendix reviews the methodology used in projecting past trends
forward to 1957. As no single criterion could be discovered which could
be applied to extrapolate all trends, various methods were employed.
In some branches, 1957 output of individual commodities or services
was first estimated, and a 1957 index of branch output was computed
from such estimates. In others the future trend of output in an entire
branch was first established, and, using it as a guide, production of
individual commodities in 1957 was then estimated. Where the commodity-
by-commodity approach was employed, the method for assessing future
output usually assumed either that absolute annual increases achieved
during recent years would be a continuing phenomenon Until 1957 or that
the Fifth Five Year Plan (1951-55) goals were realizable and thus
reliable indicators of future output. When branch trends were used,
the procedure was one either of ascertaining the recent annual rate
of growth of branch production and increasing the index by this rate
each year from 1951 through 1957 or, in several branches which
manufacture machinery and equipment, of estimating 1957 industrial
requirements for their products. Agriculture and industries closely
allied to it presented particular difficulties, which are discussed
separately. Special procedures followed in projecting the expansion
of defense production also are reviewed.
Soviet, Bloc trends were extrapolated to account simultaneously
for estimated Soviet trends and for estimated growth of output in the
Satellites. The methodology for extrapolating Bloc trends was the
same as for Soviet trends, except in sectors where Soviet Plan figures
are the basis for estimating growth. In these sctors the Satellite
component of Bloc production was projected in accordance with
absolute annual increases of recent years.
1.
Extrapolation in Accordance with the Fifth Five Year Plan.
The description of the Fifth Five Year Plan (1951-55) recently
released by the Kremlin provides a comprehensive outline of Soviet
economic intentions. There is evidence in the historical performance
of the Soviet economy that the Fifth Five Year Plan objectives will be
attained. The Fourth Five Year Plan (1946-50) was fulfilled in most
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sectors, and the Fifth Five Year Plan has been overfulfilled during
its first 1-3/4 years. Therefore, where Fifth Five Year Plan goals ,
were known, extrapolations were usually adjusted in accordance with
them. Following this, the 1957 output of other commodities whose
production growth would tend to parallel those for which Plan figures
were available was similarly adjusted.
This technique was applied to extrapolate production trends in
the following branches of Soviet economic activity: transportation,
energy, ferrous metals, nonferrous metals, construction materials,
machine tools, and automotive equipment.
Although numerous Fifth Five Year Plan figures are available
for agriculture and consumer goods, ORB has rejected these figures
as guides to future output. In past Plans, goals for agricultural
commodities and industries closely tied to agriculture were
consistently underfulfilled by large margins, and goals of the
present Plan are also too high for achievement. The difficulties of
estimating the degree of their underfulfillment are explained in 5,
below.
2. Extrapolation in Accordance with Absolute Increases of
Recent Years.
In most industrial branches, as in most individual commodities,
in the 3 years following 1948 absolute annual increases in production
tended to remain constant. Output curves for many commodities and
branches if measured on linear scales are a straight line over recent
years. With a large number of the commodities, constancy of absolute
increases existed throughout the entire postwar period. This is an
unusual phenomenon for such long periods of time in so many segments
of an economy or group of economies and is probably explained by
Communist economic and social controls designed both to prohibit
cyclical fluctuation and to produce short-run growth in a nonyarying
fashion.
This characteristic provides an obvious method for extra-
polating,: a straight-line projection to 1957 of each straight-line
slope. Its justification is twofold: first, absolute expansion
which has been realized year after year can probably be maintained
for six more years; and second, since Soviet postwar planning has
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tended to conform to this characteristic, it would seem a reliable
guide where Plan data aremissing.
Straight-line extrapolations appeared to be the appropriate
method for projecting trends in the following branches: communica-
tions, forest products, electric machinery, electronic equipment,
and mining machinery. In addition, straight-line extrapolation of
Satellite trends was the primary technique used to project the
Satellite component of Soviet Bloc trends in branches where Soviet
Plan data provided the indicator for extrapolating the Soviet
component.
3. Extrapolation Accounting for New Commodities and Improved
Quality.
The weakness of straight-line extrapolation is the downward
bias which it imparts to general economic growth. The limited
number of commodities selected to construct a branch index are the
established, and relatively mature elements produced in the branch.
Yet in reality a significant portion of production in many branches
consists of newer products whose output has been increasing rapidly
in recent years. By 1957 the importance of these and other new
even greater than at present.
they are not accounted, for in the ORR
indexes, and many branch indexes therefore understate true growth.
Another cause of downward bias in several indexes is the inability to
account for improved quality of product. In other words, although
branch index series purport to demonstrate growth of the branch as a
whole, many indexes fail, in fact, to demonstrate the full increase in
branch output from year to year, because the sample of commodities
aggregated is not representative.
-products will be
Faulty sampling is particularly serious in branches with
complex manufacturing processes, a wide variety of products, and
rapidly changing technology. In such branches of industry, growth,
in the sense of annual increments to total value of production, is not
so apt to parallel the output of a few commodities as in other branches
of the economy. From a knowledge of similar US industries, it is
probable that annun.1 growth of these branches more nearly approximates
a constant ratio than any other phenomenon.
The branches extrapolated in this fashion -- that is, by
constant percentage increases -- are listed below. The growth rates
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for the first three are based on average annual growth shown in the
1948-51 portion of their respective indexes. This period was
selected as normal for postwar growth. The chemicals rate is based
on a trend indicated by Plan goals for basic chemicals, with the
computed annual rate of growth for this trend adjusted upward by
2 percent to account for new commodities and improved quality.
Branch
Average Annual
Rate of Growth
1951-57
(Percent)
Metalworking Machinery
13.7
Machine Tools
11.0
POL
11.8
Chemicals
11.7
The 1957 branch index numbers derived by this procedure
appear plausible. Furthermore, the upward bias resulting from this
procedure is probably offset by the downward bias in indexes pro-
jected by straight-line extrapolation.
4. Extrapolation.in Accordance with Demand for Products.
In several branches of industry producing capital goods, it has
been possible to establish,trends of output by estimating Soviet and
Soviet Bloc requirements for these capital goods. These branches con-
sist of manufacturers of specialized types of machinery and equipment
whose distribution patterns are narrow. The production of railway
equipment is, for instance, directly related to conditions such as the
size, obsolescence, depreciation, and traffic load in one other branch
of industry -- railways. Had
research in ORR further advanced, still other branches
would have been included in the following branches, whose 1957 out-
put was estimated on the basis of demand for their products: rail-
way equipment, agricultural machinery, construction equipment, textile
machinery, antifriction bearings, and shipbuilding.
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5. Extrapolation of Agricultural and Consumer Goods Branches.
Quite aside from fluctuations caused by weather, it is im-
possible to predict production trends of agricultural commodities
and consumer goods with a high degree of confidence. Soviet Bloc
agricultural activity is in a transitional stage. Efforts to in-
crease productivity probably will be strengthened in the USSR during
the period of this estimate. Agricultural output, however, may be
affected if rapid changes are made in institutional arrangements in
the USSR and in the Bloc. For example, there is evidence that the
Kremlin may move in the near future to eliminate collective farms -and
the free market for peasants' surplus produce, whereas collectiviza-
tion may be accelerated in the European Satellites. In China,
Communist controls may result in radical changes in agricultural
technology and organization. The speed with which the changes will
occur, as well as their net effect, cannot be forecast.
Probably the best indicator to be discerned from past
agricultural performance is habitual Plan underfulfillment by large
margins. Therefore, underfulfillment is predicted for most
commodities, and the ORB projection falls well beneath Fifth Five
Year Plan goals. Such a prediction is supported by the limitations
of Soviet technological and organizational skills, as well as
limitations of climate, soil, and terrain.
The agricultural projections used in this report are based
on the assumption that the Russians will be partially successful, in
their intensified efforts to increase agricultural output. The pro-
jections for each commodity were established by the "free-hand"
technique, No attempt was made to assess specifically the effect of
developments such as soil improvement, irrigation, mechanization, re-
organization of farms, or new policies on focid distribution. It is
estimated that their net effect will be beneficial and that heavy
investment planned for agriculture will bring greater yields.
The projections reflect the belief that most of the gains
will occur in the USSR. The average annual gain in Soviet agriculture
estimated for the 6-year period is about 3 to 4 percent; for the
Satellites, it is less than 1 percent.
These differing rates of growth are based, on the belief that
Soviet agriculture is now in a developmental stage where changes in
organization and technology will tend to be more effective, whereas
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in the Satellites, obstacles to successful change are more formid-
able.
Food processing and the light and textile industries were
projected in conformity with growth in agriculture. Although pro-
jections for individual commodities are beneath Plan goals, estimated
rates of growth for these industries as a whole are high. As in
agriculture, the largest Soviet Bloc gains in these industries are
estimated for the USSR.
6. Extrapolation of the Defense Industry.( 7
Extrapolation of the defense industry index was derived in-
directly, as physical production estimates were not obtainable. For
this purpose, two approaches were utilized. Primary reliance was
placed upon the' projection of the defense component of gross national
product, as described in Appendix C. The basic assumption behind the
use of this indicator is that military procurement, an identity with
military production, is a constant proportion of total defense ex-
penditures. Actually procurement was a rising proportion during the
period 1947-51. 12/ During the 6-year period of the estimate, how-
ever, there will be changes in the factors affecting the composition
of military expenditures which will tend to prevent al significant in-
crease in the relative share of these outlays for prOcureMent of
military end items., First, the accelerated re-equipment of the armed
forces, which was occasioned by the intensification of the cold war and
the outbreak of hostilities in Korea, will tend to moderate as pro-
curement goals are achieved. Second, as re-equipment with current
models of weapons is achieved, it is reasonable to anticipate a relative
expansion in outlaYs for military research. Third, the high propgrtion
Of outlays going to procurement in the earlier period is explained in
part by the relative decline in maintenance costs -= pay, subsistence,
and clothing -- of the armed forces. Consumed- goods prices declined
more rapidly than did prices of capital goods and, by assumption,
prices of military end items. ?A further decline in consumer goods
prices relative to prices of military end items is not anticipated
during the period of the estimate.
If the relative increase in defense expenditures is accepted ,
as a valid indicator of the rise in defense output, an average annual
rate of growth of 11.4 percent is obtained.
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The second and more arbitrary approach involves the use of,a
complexity factor. The rationale behind such a complexity factor is
the fact that the bulk (some two-thirds) of rising defense production
has been accounted for by the increasing complexity of military end
items rather than by any expansion of the Soviet military establish-
ment. The remaining one-third of the growth of military production
is assumed to be accounted for by increased military stockpiling;
and by larger military transfers tp Satellite armed forces.
The complexity factor is based on US experience, with adjust-
ment to suit Soviet conditions. The costs of producing selected
military end items at 1942 rates of output expressed in 1942 and 1953
prices were compared. The items were grouped into major categories
suah as aircraft, ships', weapons, and ammunition. With 1942 as the
.base, 1952 price indexes were computed for each group. In deriVing
a general price index for military end items as a whole in 1952, the
groups were weighted by the proportions of total values of military
production they represented. The proportions reflected implicit
judgments regarding military outlays in the USSR. The resulting
general price increase amounted to 296 percent. From this figure
it was necessary to deduct increases in cost common to industry as
a whole. The remaining price increase was assumPd to be accounted
for by the more complex nature of military hardware.
Changes in wage rates in US ordnance and aircraft plants and
changes in prices of a weighted list of steel products used in
armaments were assumed to represent general price increases. The
price rise for these factors is 90 percent. If the rise in defense
production arising from other factors is assumed to be half as large,
the total annual average compound growth of military production be-
comes 11.7 percent.
The procedure used to obtain defense industry indexes for
1928, 1937, 1940, and 1944, as in the case of the extrapolations
into the future, utilizes the defense component of gross national
product. The real value of defense expenditures in each selected
year (as derived from Table 2 in Appendix C*) was expressed 'as per-
centages of the 1948 value. Again the arbitrary assumption that
military procurement remained a constant proportion of total defense
expenditures prevailed. No independent check was attempted.
P. 36, above.
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APPENDIX E
POPULATION AND LABOR FORCE ESTIMATES FOR THE SOVIET BLOC
Table 3
Soviet Bloc Population Estimates
Thousands
1946
1947
1948
1949
1950
1951
1957
USSR
189,000
191,100
193,400
196,900
200,400
203,800
224,500
Albania
1,130
1,160
1,175
1,190
1,210
1,235
1,415
Bulgaria
6,965
7,020
7,075
7,130
7,219
7,264
7,707
Czechoslovakia
12,916
12,164
12,252
12,396
12,536
12,671
13,387
East Germany
18,500
18,8w
19,100
19,100
18,800
18,500
18,500
Hungary
9,025
9,076
9,136
9,207
9,258
9,311
9,616
Poland
23,930
23,700
23,700
24,377
24,697
25,014
26,847
Rumania
15,762
15,848
15,935
16,023
16,111
16,198
16,710
Communist
China
48o,000
480,000
480,000
480,000
480,000
480,00o
480,000
Total
757,228
758,868
761,773
766,323
770,231
773,993
796,682
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Table 4
Soviet Bloc Labor Force Estimates
Thousands
USSR
Agricultural Labor
Force
1947
1948
1949
1950
1951
1957
52,000
52,;000
51,000
50,000
49,000
47,000
Total Nonagricultural
Labor Force
32,200
33,400
35,400
37,200
39,200
46,175
Unskilled Urban
Workers
23,640
33,790
24,160
25,410
26,700
28,365
Skilled Urban Workers
5,500
6,7.90
7,060
8,000
10,110
Professional
Managerial Personnel
3,060
3,420
3,780
,7,650
4,140
4,500
7,700
Albania
Agricultural Labor
Force
480
480
478
467
464
443
Total Nonagricultural
-.
Labor Force
46
53
64
83
/ 96
171
Unskilled Urban
Workers
38
45
54
71
81
130
Skilled Urban Workers
4
4
5
6
8
23
Professional
Managerial Personnel
4
4
5
6
7
18
Bulgaria
(
Agricultural Labor
Force
2,700
2,700
2,700
2,650
2,600
2,500
Total Nonagricultural
Labor Force
719
781
809
865
891
1,030
Unskilled Urban
Workers
472
515
524
562
568
581
Skilled Urban Workers
160
170
180
190
200
260
Professional
Managerial Personnel
87
96
105
113
123
189
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Table 4
Soviet Bloc Labor Force Estimates
(Continued)
Thousands
Czechoslovakia
1947
1948
1949
1950
1951
1957
Agricultural Labor
Force
2,200 .
2,200
2,200
2,127
2,050
1,900
Total Nonagricultural
Labor Force
3,200
3,000
3,089
3,169
3,319
4,100
Unskilled Urban
Workers
1,972
2,093
2,103
2,133
2,225
2,583
Skilled Urban Workers
600
649
698
735
771
1,011
Professional
Managerial Personnel
228
258
288
301
323
506
East Germany
Agricultural Labor
Force
2,200
2,200
2,200
2,150
2,100
1,800
Total Nonagricultural
Labor Force
5,782
5,400
5,400
5,805
6,055
7,300
Unskilled Urban
Workers
4,597
4,183
4,150
4,481
4,64o
5,190
Skilled Urban Workers
885
900
918
976
1,049
1,563
Professional
Managerial Personnel
300
317
332
348
.366
547
Hungary
Agricultural Labor
Force
2,100
2,050
2,000
1,950
1,900
1,700
Total Nonagricultural
Labor Force
1,400
1,500
1,700
1,920
2,143
2,750
Unskilled Urban
Workers
881
981
1,164
1,374
1,582
2,006
Skilled Urban Workers
349
349
349
352
360
474
Professional
Managerial Personnel
170
170
187
194
201
270
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Table 4
Soviet Bloc Labor Force Estimates
(Continued)
Thousands
Poland
Agricultural Labor
1947
1948
1949
1950
1957
.1951
Force
7,400
7,400
7,400
7,350
7,350
7,100
Total Nonagricultural
Labor Force
3,180
3,228
3,755
4,450
4,640
5,900
Unskilled Urban
Workers
2,180
2,163
2,610
3,226
3,294
3,220
Skilled Urban Workers
.700
750
800
849
936
1,850
Professional
Managerial Personnel
300
315
345
375
410
930
Rumania
Agricultural Labor
Force
.6 000
6,000
6,000
5,950
5,900
5,600
Total Nonagricultural
Labor Force
1,100
1,200
1,400
1,713
2,143
3,200
Unskilled Urban
Workers
680
732
892
1,157
1,531
2,145
Skilled Urban Workers
260
280
300
327
359
617
Professional
Managerial Personnel
160
188
208
229
253
438
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Table 5
Soviet Workers and Employees Estimates
Thousands
Industry
1947
1948
1949
1950
1951
3957
9,900
10,700
11,800
12,500
13,700
15,775
Electric Power
273
286
299
312
325
355
Petroleum
300
300
300
300
300
342
Coal
280
380
915
930
950
950
Ferrous Metallurgy
300
465
627
785
890
998
Nonferrous Metallurgy
235
270
310
345
375
435
Metalworking Machine
/
Construction
3,700
3,900
4,100
4,300
4,500
5,210
Timber
420
430
44o
450
46o
516
Chemical
132
198
264
328
390
436
Textile
500
600
800
900
1,000
1,084
Fish
141
152
167
178
189
211
Food
725
850
975
1,100
1,200
1,344
Meat and Dairy
210
220
235
245
254
284
Paper ' 85
Industry Not Elsewhere
90 ,
100
105
110
110
/ /
Classified 2,599
2,559
2,268
2,222
2,757
3,500
Construction
2,600
2,600
2,750
2,950
3,000
3,300
Rail Transport
1,750
1,800
1,850
1,950
2,000
2,225
Water Transport
215
215
220
225
230
243
u
Other Transport
2,425
2,425
2,450
2,475
2,500
2,800
Education
2,550
2,650
2,800
3,000
3,200
4,40o
Public Health
1,300
1,350
1,400
1,450
1,500
1,870
Trade
2,970
2,970
2,980
3,040
3,100
3,580
Public Feeding
970
970
980
990
1,000
1,500
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Table 5
Soviet Workers and Employees Estimates
(Continued)
Thousands
Credit
Dwelling, Communal
1948
1949
1950
1951
1957
,1947 ,
335
335
340
345
350
415
Economy
1,140
1,140
1,160
1,180
1,200
1,445
State and Public
Institutions
2,170
2,170
2,180
2,190
2,200
2,325
Art
235
235
240
245
250
315 '
Communications
570
570
580
590
600
760
State Agriculture, ,
Forestry
1,600
1,800
2,200
2,600
2,900
3,410
Other Not Elsewhere
Classified
1,470
1,470
1,470
1,470
1,470
1,812
_Total 32,200 33,400 35,400 37,200 39,200 46,175
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_ _ _
APPENDIX F
ORR ESTIMATES COMPARED WITH OFFICIAL RESULTS
OF SOVINI! PLAN FULFILLMENT IN 1952
On 22 January 1953, after ORR had already established its estimates
for the period 1951-571 Tass published a limited number of Fifth Five
Year Plan fulfillment figures. This announcement provides a check on
the reliability of ORR estimates of output of a limited number of
commodities. Table 6* reproduces that portion of the Tass announce-
ments that can be compared with ORR estimates incorporated in this
report.
For most of the commodities, ORR estimates do not differ signif-
icantly from the Plan fulfillment figures. The most serious ORR
failures to estimate output accurately** are zinc and meat produc-
tion, both of which were underestimated. Brick production, num-
bers of cattle and horses, and railway freight turnover were also
underestimated. There were no instances of ORR estimates being
greatly in excess of Plan fulfillment.
The announcement included several more commodities, largely
manufactured items, that could not be compared With ORR estimates,
because the Tass description did not permit their being classified
precisely. The announced increase in gross production, 11 percent,
is close to the increase in the ORR index of industrial output,
10.1 percent.
* Table 6 follows on p. 62.
** Throughout this report it has been assumed that Soviet official
announcements are accurate.
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Table 6
Comparison of ORB Estimates with the Tass Announcement
of Fifth Five Year Plan Fulfillment Figures
Economic Sector
and Commodity
1952 Output as a Percentage of 1951 Output
ORB Estimate
Official Soviet
Announcement
Ferrous Metals
Pig Iron
115.9
114
Steel
109.7
110
Nonferrous Metals
Copper
116.7
115
Zinc
111,9
124
Lead
120.0
117
Energy
Coal
107.2
107
Oil
111.8
112
Electric Power
112.1
113
Chemicals
Caustic Soda
113.3
111
Synthetic Rubber
109.7
109
Construction Materials
Cement
116.9
115
Bricks
114.9
119
Food Processing
Cotton Fiber
107.4
107
Meat
109.2
115
Vegetable Oil
110.1
109
Sugar
110.4
103
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S-E-c-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
S-E-C-R-E-T
Table 6
Comparison of ORR Estimates with the Tass Announcement
of Fifth Five Year Plan Fulfillment Figures
(Continued)
Economic Sector
and Commodity
1952 Output as a Percentage of 1951 Output
ORE Estimate
Official Soviet
Announcement
Agriculture
Cattle-
103.7
106
Hogs
104.1
104
Horses
101.6
104
Transportation
Railway Freight
105.9
109
Water Transport
114.1
112
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S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/04/26: CIA-RDP79R01141A000200060002-0