REPORT ON THE OFFICE OF ECONOMIC RESEARCH FOR 1969

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01439R000500110016-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 19, 2016
• Document Release Date: June 30, 2005
• Sequence Number: 16
• Publication Date: January 12, 1970
• Content Type: MF

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12 JAN 1970
SUBJECT : Report on the Office of Economic Research
for 1969
M 40RARDUM FOR: Deputy Director for Intelligence
1., This memorandum is a brief su:meary of OER highlights for
calendar year 1969. Comparative data for earlier years are included 25X1
where they assist in interpreting results.
3. Current Intelligence Support to OCI
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tells me the Bulletin is now 11 percent an
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OER product. Our current intelligence output seems more responsive,
in part a reflection of the first full year of a current intelli-
gence production officer. M. hoc support to OCI was down somewhat,
largely a reflection of the fact that there was on one
crisis -- - 25X1
improved the content of
s material on the subject* The exchange of views,
exploration of analysts' "gut feelings," the determination of
factors leading to individual conclusions of all members was laid
bare and influenced the final analytical writing.
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4. OER Intelligence Production
As the accompanying table shows, overall, OER published
production increased in 1969, by about 10 percent. Intelligence
Memoranda in support of current developments of policy interest
was at an all-time high. However,
larger number of studies published
which required in-depth research rigorous analysis. Some of
these required the applications of mathematical models and extensive
computer assistance.
Our role in S support has been, in general, that of a
small contributor and reviewer. Exceptions have been those involving
the war in Vietnam and NSSM's with conomic ingre-
dients
product on
0
5. Research on the War in Vietnam
The tempo of work on Indochina was brisk throughout 1969.
The reduction in enemy activity in South Vietnam during the year
as well as the bombing cessation late in 1968 did not result in any
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appreciable slackening in the research load. More were somewhat
fewer requests from top policy levels of the new administration,,
but the questions which were asked frequently focused on the nub
of basic issues of the war and often required new analytical
approaches. The year opened with a review of the entire intelli-
gence base in the Vietnam war -- Dr. Kissinger's ASSNS #l. Inputs
included enemy order-of-battle analysis, a survey of the logistics
and infiltration picture and comments on enemy tactics and strategy.
The year ended on much the same note of intensive research. The
high-level Vietnam Special Studies Group was formed in October
under p8C auspices at the request of the President. We played a
major role in the research and drafting of the first of two reports
considered by the Studies Group -- one dissected indicators of
enemy manpower strength and the other reviewed the war in the
countryside, i.e., security and control of the rural population of
South Vietnam. both of these projects were organized as community-
wide efforts but the dominant OBE role clearly demonstrated that our
previous years of concentration and continuity on war-related
research was paying off.
6. Formation of the Systems Development Staff
The Systems Developsent Staff, with the responsibility for
the development of ADP projects and the application of quantitative
techniques to economic intelligence, was formed in February.
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was applied to the problem of costing Soviet radar systems.
In addition to extensive use of OCS training programs, OER
presented a workshop on
gence which was attended
This continuing program
use of quantitative tools and ADP techniques is designed to provide
us with a basis for further applications of computer analysis in
the future.
7. Expectations for 1970
ADP. We expect a substantial increase in the use of com-
puters in.OER. OCS is assigning us a full-time programmer, to be
located physically in OER. Two remote consoles will be installed
within the next few months and at least two more during the calendar
year. Another workshop started the first week in January
By the end of 1970 there e
. - ~:, in tiaj d in the use of computers in
economic intelligence.
USSR. One of the most important intelligence findings is
that after two years of reasonable growth rates (1966 and 1967),
Soviet economic growth began to decline again in 1966 and in 1969
the decline was accentuated. Industry as well as agriculture is
growing more slowly. We are exploring the possibility that the
long history of high rates of capital accumulation have brought
Soviet industry to a point where rapidly diminishing returns have
set in. If this is true, as a preliminary statistical study
indicates, then a substantial acceleration of investment would
have only a moderate effect on growth, and reorganization of the
process for adapting and introducing new technology would be the
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only promising method of overcoming the current slowdown. Without
scrapping the ideological trappings of Communist control, the rapid
introduction of technology seems impossible.
In summary, we hope that 1970 will see a shift in research
emphasis so that more in-depth analysis on key economic intelligence
problems will be possible.
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EDWARD L. ALLEN
Director
Economic Research
Attachment:
OER Production and Support
Activities by Calendar Year
_g_
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