THE CIA S ANNUAL MYTH: SOVIET GROSS NATIONAL PRODUCT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-01137R000100180001-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 14, 2016
• Document Release Date: August 10, 2001
• Sequence Number: 1
• Publication Date: October 15, 1986
• Content Type: NSPR

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NEW YORK TRIBUNE (NY)
Approved For1ReI@dtw]DO1 3/04I'?f : CIA-RDP
dlGENCE - ESPIONAGE / LEV NAVROZOV
The CIA Annual Myth-:, Soviet Gross Nalonal Product
-dPW
Every year the CIA has been calculating
the Soviet Gross National Product -
the most important figure in its analysis
of the Soviet economy, used also to
determine the often-quoted "percent-
age of Soviet military spending in the
Soviet GNP."
In the United States, the GNP can
be calculated because all goods and
services are sold at market prices and
the sales are reported.
In the Soviet economy, prices are
set by the rulers for purposes of their
own: Thus, the prices of what the rulers
consider necessities (rye bread, for
example) - without which their sub-
jects cannot five, work or fight - are
sufficiently low for the lowest-paid to
buy in sufficient quantities.
On the other hand, the prices of
what the rulers consider luxuries -
without which their rank-and-file pop-
ulace can well live, work and fight- can
be multiplied as many times compared
with their cost as is necessary to price
them out of reach of the rank-and-file
populace or allow only minimal pur-
chases.
Take women's shoes, for example. If
the price of shoes is sufficiently high, a
woman can wear one pair of shoes all
her life and pass them on to her
daughter to wear all her life.
Once, in a village not far from Mos-
cow, I saw young girls walking to a
dance party barefoot, each with a pair
of shoes in her hand. To dance barefoot
is improper, of course, but why wear
shoes walking to dances when the
young men don't see them anyway?
Given such thrift, shoes can go a
long way, and the rulers price them
accordingly. The fewer pairs of shoes
they have to make, the more manpower
and other resources they will have at
their disposal to produce weapons.
Nonexistent Soviet GNP
Let's suppose that the CIA agents in
Russia (once upon a time the public was
assured that Russia was ridden with
them) have fisted all goods produced in
Russia this year, along with their prices.
The Soviet GNP calculated by adding all
these data would be an entirely mean-
ingless figure.
Wealth - that is, how many shoes
have been sold and what were their
market prices -- is of no cardinal inter-
est to them. On the contrary, they want
as little manpower to be set aside for
the production of shoes as possible, and
in that respect they want the country to
be poorer, not richer. The rulers of Rus-
sia couldn't care less abouth the wealth
of Soviet citizens.`
Let's imagine that the CIA agents
have listed, say, the number of pairs of
women's shoes produced in Russia this
year. In order to determine the value of
women's shoes, the CIA would 'price
them not in Soviet rubles, but in dollars.
As we know, the CIA did this as
follows. The "CIAs agents" would buy
an "average pair of women's shoes" in
Moscow and bring them to the United
States, where shoe manufacturers
of
"Has the CIA
renounced what it
has been doing for
about 30 years? Or
does the CIA's
`Soviet GNP' still
exist? 99
could then evaluate them in dollars. In
the same way, the CIA can add up the
values in dollars of all other Soviet
goods and services.
U.S. Shoes Vary Widely
However, in the United States the
value of a pair of shoes depends on such
factors as make, style, design and qual-
ity. There are thousands of different
kinds of shoes available on the market.
If American shoe manufacturers
could mass-produce standard, uniform
shoes, they could possibly sell them for
less than $5 a pair. On the other hand,
hand-made designer shoes can sell at
$1,000 a pair. What is the "average?"
Similarly, rye bread is not consid-
ered a vital food in the United States,
just one of myriads of foods available on
store shelves and in restaurants.
Hence, rye bread is not a whole lot
cheaper than wheat bread (as is the case
in Russia) or other foodstuffs - e.g.,
oranges - which the rulers of Russia
price as expensive delicacies.
For Americans the cost of rye bread
is comparatively much higher than in
Russia because they can choose from
myriads of other foodstuffs, while this
is not at all the case in Russia.
Nor do the rulers themselves need
it. What for? The Americans want to
know their GNP in order to know how
much wealthier their country has
become: the Soviet rulers want to know
how much more powerful theirs has
become.
Lev Navrozov, who emigrated from Rus-
sia in 1972, is an author, essayist and
syndicated columnist.
Thus, even if the CIAs agents could
fist all goods and services produced in
Russia and "evaluate" average sam-
ples,I the CIA's "Soviet GNP" figure
would make no sense.
The congressional hearing on Nov
21, 1984, marked the 11th year of the
CIAs annual testimony before the Joint
Economic Committee of Sen. William
Proximire, D-Wisc. So after 11 years of
hearing about the CIAs estimates of
Soviet output in dollars, Proxmire
asked:
"Why is there no presentation of the
dollar cost estimates of Soviet defense?
Is it correct that the ruble estimates you
have given us are based on the dollar
estimates?"
Instead of answering, Robert Gates,
CIA deputy director for intelligence,
burst out with a speech of about three
standard typewritten pages in length.
An excerpt will illustrate how
obscure the speech was: "I went to the
Director [of Central Intelligence], and
it was at my initiative, and proposed to
him that we not do the dollar costing
paper, that we continue to do the dollar
costing work because it supported
much of our work on ruble costing.
"So do we do or do we not do the
dollar costing work?"
Proxmire interjects: "Let me just
interrupt you ..:'
However, Gates races on: "In any
event, I made the recommendation to
the Director that we approach the
Department of Defense, ask them, or
tell them, in effect, that we would not
be doing the dollar-cost estimate."
But the dollar-cost estimate of the
"Soviet GNP" is far more absurd than
that of Soviet defense as part of the
Soviet "GNP." At least, American
weapons may be evaluated in dollars on
the basis of an average sample more
adequately than can Soviet shoes.
If the CIA gives up its dollar-cost
estimates of Soviet weapons, surely its
dollar-cost "Soviet GNP" should he
given up as even more worthless.
As for the CIAs "ruble-cost esti-
mates," the CIA derived them from its
"dollar-cost estimates" in a totally fan-
tastic manner.
The termination of the CIAs "dollar-
cost estimates" terminates its
"ruble-cost estimates."
So what remains of the CIAs testi-
mony before Proxmire's committee fort
11 years? Has the CIA renounced what
it has been doing for about 30 years? Or
does the CIAs "Soviet GNP" still exist?
pproved For 4/02 : CIA-RDP90-01137R000100180001-9
 WALL STREET JOURtf
ARTICLE A a~REpproved For Release 2003/0 0Q d-F? l 0-01137R000100180001-9
ON PAG
When a Dictator Dies, How Much Turmoil Will Follow?
By RlcHASW K. Bears
And SAMUEL P. HUl TrvGTON
"When Tito dies, will Yugoslavia fall
apart?" That question was common in the
1970s as global foreign-policy makers
looked at a country that appeared to be
held together by a unique ruler and won-
dered about the implications of his passing
for the world's strategic balance,
Today, the world is contemplating how
the Philippines is faring after the depar-
ture of Ferdinand Marcos. But what about
China after Deng Xiaoping, Indonesia after
Suharto, or many other such cases in
which the long endurance of an authoritar-
ian leader overlays internal political
strains? There are more than three dozen
authoritarian leaders who have been in
power In the developing world for 10 years
or more. Many are elderly. Will their
deaths precipitate domestic crises and
world upheaval? The answers. are critical
in many parts of the world, but particu-
larly in Asia, where many countries have
longstanding authoritarian leaders. There
is a widespread presumption that countries
ruled for extended periods by authoritarian
leaders degenerate into chaos when those
rulers die and their special personal status
no longer holds the lid on their .countries'
tensions. Our study of 22 longtime authori-
tarian leaders who have died naturally
since World War II bears out that assess-
ment to a certain degree. While the death.
of such a leader isn't necessarily followed
by political instability, it is fairly likely.
Great variations in political instability
occurred in the first year after the leader's
death. Within four years, however, the pic-
ture is quite different:'
? Coups or coup attempts occurred in
10 cases (China, South Korea, Bhutan,
Haiti, Kenya, Panama, Egypt after Nas-
ser, Dominican Republic, Guinea, Portu-
gal). .
? Mass turbulence occurred in 10
cases (South Korea, Portugal, Spain,
Kenya, Kuwait, Nepal, Egypt after Nasser,
Egypt after Sadat, Yugoslavia, Dominican
Republic).
? Guerrilla terrorism occurred in nine
cases (China, Saudi Arabi, Haiti, Panama,
Egypt [Sadat], Yugoslavia,. Dominican Re-
public, Portugal, Spain).
? Civil conflict occurred in four _ cases
(China, Yugoslavia, Dominican Republic,
South Korea).
? Revolution occurred only in the case
of Portugal.
In some instances instability led to new
leadership with significantly different poli-
cies, including more moderate ones
(China, Guinea). In three cases (Domini-
can Republic, Portugal and Spain), insta-
bility led to the replacement of authoritar-
ian regimes by democratic ones.
Our study shows three factors are
Potential for Significant Post-Death Instability
Low
High
1
2
3
4
5
B
7
$ 9
Qatar
Benin
N. Korea
Bahrain
Jordan
Chile
Somalia
Burma
Tunisia
Bhutan
Niger
Cuba
Madagascar
Gambia
Zambia
Morocco
Nepal
Taiwan
Gabon
Mali
Indonesia
Oman
Ivory Coast
Paraguay
Syria
Rwanda
Lesotho
Togo
Libya
Malawi
Singapore
Vietnam
Zaire
closely related to whether an authoritarian
leader's death will spark instability:
First is the measure of instability that
exists before the leader's death. In gen-
eral, a high level of instability before a
leader's death indicates high levels of po-
litical consciousness, organization and ac-
tivity, which are likely to sustain the insta-
bility after the leader's death.
The second factor is the number of
years the leader has been in power. A long
tenure suggests political rigidity and lack
of adaptability. The level of instability af-
ter a leader's death is strongly associated
with the number of years he has been in
power. In our study, the deaths of the four
leaders in power for. more than 30 years
were followed by extensive instability in
three cases (Portugal, Spain,. Dominican
Republic) and moderate instability in the
fourth (Yugoslavia). At the other extreme,
the deaths of seven leaders in power for
10 to 14 years were followed in three cases
by no instability (Swaziland, Algeria and
Saudi Arabia)., in three cases by limited in-
stability (Haiti, Panama and Kuwait), and
only in one case (Egypt after Sadat) by
moderate instability. In general, the ear-
lier authoritarian leaders die in office the
less instability follows their death.
The last factor in determining whether
the death of an authoritarian leader will
spark political instability is the country's
level of social organization, which, in turn,
often reflects socio-economic development.
Well-organized groups such as trade un-
ions, political parties, religious groups and
universities can facilitate the mobilization
of people for protests, rioting and insurrec-
tion.-following the.l,eader'sdeath. More in-
stability occurred in countries such as
South Korea, Spain and Egypt because so-
cial organizations could and did mobilize
their constituents, than in countries such
as Nepal, Liberia and Saudi Arabia that
lacked such groupings.
Using these three factors as a basis for
estimation, we have looked at countries
ruled today by long-term authoritarian
rulers and assessed the likelihood of signif-
icant instability if they die in office (see
table.) Five of the leaders (in Chile, Syria,.
Burma and Tunisia) whose deaths might
reasonably be expected soon due to age or
bad health, are in the top half of the coun-
tries in terms of estimated probability of
instability.
Two questions arise with respect to U.S.
policy toward such regimes.
Does the U.S. have an interest in at-
tempting to minimize instability after the
death of a long-term authoritarian leader?
If so, how can the U.S. promote its
ends?
In six of the 11 countries in the top
half, changes in regimes or policies could
significantly affect U.S. interests (Chile,
Indonesia, Syria, Somalia, Morocco, Tuni-
sia). Of the countries with lower estimated
potential instability, a much smaller pro-
portion could affect U.S. strategic or eco-
nomic interests greatly (Jordan, Cuba,
Libya, Singapore, Vietnam, Zaire, North
Korea, Oman, Taiwan and possibly Bah-
rain and Qatar).
Our overall conclusions are both unset-
tling and reassuring. The leaders of a num-
ber of important authoritarian regimes are
likely to die in the coming years. Their
deaths will often be followed by significant
political instability. In most cases, the U.S.
can do relatively little to limit that insta-
bility. In most cases, also, that instability
isn't likely to pose major challenges to
U.S. interests.
This general prognosis, however, leaves
the possibility of some extremely disturb-
ing outcomes. Past cases suggest that
overall U.S. interests are most likely to
suffer if pro-American leaders are over-
thrown, less likely to suffer if they die nat-
urally in office, and least likely to suffer if
they die before decades of endurance in of-
fice wear out their welcome.
Given the limited possibility and wis-
dom of U.S. initiatives to affect these situa-
tions, American interests generally will be
best served if longstanding dictators die in
bed, soon.
Mr. Betts is a senior fellow at the
Brookings Institution. Mr, Huntington is di-
rector of Harvard's Center for Interna-
tional Affairs. Their research was funded
by the Central Intelligence Agency. This
article is adapted from International Secu-
rity magazine.
Approved For Release 2003/04/02 : CIA-RDP90-01137R000100180001-9