0> MEMORANDUM _.
THE SOVIETLAN FULFILLMENT REPORT
CIA/RR04
WARNING
ATIONAL DEFENSEEANHC OF THE, THE WHICH IN ANYAW-
INFORMAT mW^FFRCTIHG THEWITHIN THE TITLE lQ, USC, SECS KON^-BEVELATION OF TO AN imAuTHORfeBD PERSON IS
CENTRAL INTELLIGENCE AGENCY Office of Research and Reports
BLANK PAGE
Page
Summary and
I.
II. Agriculture
HI. Capital
IV. Labor Force and Labor Productivity
V.
.
VI.
Appendixes
Appendix A. Targets for the Production of Processed Foods
in the USSR in
Appendix B- Botes on Capital Investment in the
Appendix C. Sources and Evaluation of Sources
- iii -
1
Tablea
Page
L. Increases in Industrial Production In the USSR in the Fifth
Five Year Plan Period 4
-- First Half-Year Increases and Planned Yearly Increases
in the Prcduction of Selected Food Products in tbe USSR,
9
First Half-Year increases in the Production ofIn the4 . 12
. Annual Increases in Capital Investment ln the USSR
in the Fifth Five Year Plan l6
. Planned and Achieved Annual Increases ln Construction Labor Productivity in the Fifth Five Year Plan
Period 17
First Half-Year Increases in the Volumo of Capitalln the USSR, lfl
Planned Increases In Investment Expenditures and Reported Increases ln the Volume of Investment in the USSR,
20
Civilian Labor Force in the USSR, 23
Annual Increases in Labor Productivity lnConstruction ln the 24
Increases in Retail Trade Turnover in the 25
Increases in State and Cooperative Retail Trade Turnover in the USSR In the Fifth Five Year Plan . 27
Increases in the Production and Sales of Consumerthe USSR During the First Half4 26
- iv -
0-
Page
13- Trade of the USSR with the Free World, 30
14. Increases in Railroad Freight Traffic in the 38
15- Increases In River and Sea Freight Traffic in the USSR,
33
in the Production of Selected Food Products
in the USSR 35
of Annual Increase in Capital Investment
in the3 37
lfl. Increases in the Volume of Centralized Capital Investment
in the 39
- V -
THE SOVIETFLAN FULFIIIMENT REPORT*
Summary mid Conclusions
Theoviet plan fulfillment report indicates thatexpansion of production uas achieved in theonthshroughout the Soviet economy-
Gross industrial production vas ll* percent higher than in tbeonths Even if this relatively high rate of growth is not maintained,5 goal probably will be overfulfilled. Production of the "leading links"the energy and metallurgy sectorsvas approximately on schedule, and most of5 goals in these sectors will be met. Output of most fabricated metal products increased, with appreciable gains in agricultural machinery. Output ofaterials continued to lag behind planned goals, jeopardizingplans, and the reported gains in chemicals production were unimpressive. Production of most food products lagged well behind proposed output.
Although fulfillment ofear rail transport goal seems certainail traffic failed to meet the targets set for the first halfartly becausehortage of freight cars and also, probably, because of the severe winter. oderate rate of growth is estimatedfter which an upswing In the declining rate of grovth evidenced in the Fifth Five Years expected.
The Initial phases of the nev programs in agriculture, consumer goods, and trade are being implemented successfully. Agricultural sown area has been increased byercent, mainlyesult of overfulfillment in the reclaimed and virgin areas. Herds of livestock, especially in the private sector, shov appreciable gains, indicating that thc incentive measures adopted3 have been to some extent effective- In the immediate future, however, food supplies
The estimates and conclusions contained in this report represent the best Judgment, of the responsible analyst as
will not Increase significantly; since food-crop yields vill remain low because of unfavorable weather conditions in major producing areas and inadequate supplies of mineral fertlliEere: Present efflphaslB on herd build-ups precludes any substantial Increase in meat supplies.
Planned increases in output of clothing and footwear were achieved during theonths, and progress was made In Improving quality, an aim which ia .being emphasized. Production of consumer durables, including appliances, increasedut the volume remains low, and luxury prices prevail. Betail trade has grown, partly because of production' increases and partlyn,the,proportion of the more expensiveise In imports, and releases from stockpiles. The expansion of tbe Wade'-network' in both.urban and rural areas should asaure wider distribution of. goods, but prices fornd majiuf acUtrea goods, in general, have remained aboveevel.
5 goal for. the industrial labor force probably willih Wf, even if the transfer of collective formers to 3 ookkeeping rk^ecVr. Heavier employment of essentially marginalwomen and older people, is responsible foi-of the plan. Abandonment of Fifth Fivfc Yearlabor productivity in industry and constructionacitthat the goals cannot be met, given the existingthe composition of/the labor. fcrOe.: ShlftB.of Industrialagriculture are being carried out 'successfully. Despite thetheee.workers will bring with them, over-all agriculturalwill remain.
Capital lnvestmente appear to have recovered from the adjustments and shifts undertaken3 in connection with the revised policies toward agriculture, consumer goods, and trade announced, in the monthe following the death of Stalin, investments in heavy industry and trade are approximately meeting plan requirements, but investments continue to lag in those sectors of the economy which need bolsteringhousing, agriculture, and the light and food Industries. 5 volume goals for capital investment may be achieved, inability to increase labor productivity and reduce costs to planfted levels indicates that the program will be more expensive than orifilnallj planned.
It is evident that the continued grovth of the Soviet economy is being achieved by above-plan additions to the industrial labor force andreat expansion in agricultural sown areas, since bothlabor productivity and crop yields are wen behind planned goals. Extensive capital investments should assure atoderate rate of growth in the economy Despite present emphasis on increasing food supplies and consumer goods, which Should bemore plentiful in tbe next few years, Soviet planning will continue to stress heavy industry rather than the light and food industries.
I. Industry.
Soviet_ploq fulfillment -reportsable giving the productionarge niaaoer of coocoditiecercent ofduring thesprevious comparable, perittxl. These figures ore accepted'as measures of changes in production of the reportedroducts or product group6. In evaluating these data, of course, allowances must be made for commodity coverage, selective omissions, peculiarities of the base period, and the like. The reported statistics on increases in gross industrial production are less useful, since the weighting system employed is unknown.ThejsJftc', however,ough measure of the direction and size of change. For example, reported annual increases ln gross industrial productionk percent during the Fourth Five Yearnd onlyercent during thcears of the Fifth Five Year Plan. These statistics are also useful because they represent one of the principal yardsticks by which economic growth is planned and measured in the USSR. Data on increases in industrial production planned and claimed by the USSR during the Fifth Five Year Plan period are shown in
The USSR is virtually certain to overfulfill5 goal for gross Industrial production. Even if the lk-percent increase in the ficat halfver the same period3 isercent gair. is required in^
ollows or. p. k
H,
a" i
ivn *-
HW.PKH WH rouoto ^cjro tovp vt rvi o ui roro-ojo'
HViO CD H VO
V/l I-)
Table 1
Increases in Industrial Production in the USSR in the Fifth Five Year Plan/ (Continued)
Percent
Annual Increases
2
planned50
Rate of Annual Increase
Achieved Increase First Half4 ovcr First Half3
Cotton fabrics
64
fabrics
fabrics
.
receivers
oil
food
*
vine
This list is selected frem those products for which" the uSSR has" announced the Fifth Five Year Plan goal and increasesnd the first half Revised goals have been used. For sources, see Introductory remarks in Appendix C. b. Meat and sausage products.
Although aono difficulties hove appeared in the nonferrous me sector, production of the "leading links" of Soviot industry th energy and metallurgy sectorse approximately on schedule, and most of5 targets probably will be met. Production of steel and rolled metal le running slightly ahead of plan. Althoughof pig iron vacercent above the first halfo opposed topercent Increase requiredbhe comparison may be unduly unfavorable. Production in the first half3 appears to have been abnormally large; the half-year rate of growth in that year wasercent, but the annual rate wasercent. Although5 target may not be met, continuedof pig iron to several Western countries indicate an adequate domestic supply.
Among nonferrous metals the Increases in the production of lead and zinc are behind those required by plan, possibly because of lagging smelter construction and mine development work. Theof Nonferrous Metallurgy wae. singled out for notable under-fulfillment of its capital investment plan. ecline inin nonferrous metallurgy is suggested by the fact that theeportigure for changes in ferrous metallurgy only; previous reports had consistently presented these data for ferrous and nonferrous metallurgy combined. Omission of copper from theeport, as well as frcat3 annual report.ossible indication of poor performance. Data on aluminum, however, probably were omitted for reasons of securitybecause of the relation of aluminum to aircraft productionsince domestic production is estimated to be quite adequate and increasingatisfactory rote.
In the energy sector the production of coal and electric power ie approximately on schedule, and fulfillment of the Five Year Plan goals is olpected. In the caBe of electric power, fulfillment probably will require continued high levels of plant operation, which would offset the anticipated failure to meet the original targetoubling of installed capacity. Attainment oftargets will require increasesomewhat in excess of those reported to date. percent gain in the production of diesel fuel is ln keeping with estimated civil requirements, whose rapid growth reflects sharp increases in the diesel tractor park.
- D -
Uie chemicals group, increases ofercent iti the production of caustic soda andercent In thc production of calcined soda have been made possible by Introduction of new Capacity, and fulfillment of five Year Plan' goals is probable. Gains Ofercent, however, in the production of synthetic rubber and dyes, respectively, are well below planned targets. The production of' mineral fertilizer, which Increased byercent in the first half ofcontinue* to run far, behind plan. The consequerKes of underfulf iliment of thia target ttlll be strongly felt in agriculture and will exercisevere limitation on the-ability of the economy to achieve certaingoals-
It is evident that rapid expansion ln the production of units for hydroelectric plants is being achieved only at some sacrifice to grtAftrt of thermal capacity. The production of large hydroturblnca In the first halfwice production ln the corresponding periodnd the prcduction of hydrogenerators- rosehile the production of turbogenerators .tfrcretteed.byercent and steam turbineserdent.
Gains ofercent in the production of tracks andn the production of automobiles are roughly those reported Omission of these commodities12 suggests declines for these items ln the early years of- the Plfth> Five Year Plan.
The data for cement and bricks ehow continued failure to rcu/fh the rates of increase required by the Fifth Five Year Plan. Nor rs there any Indication of significant Improvement ln the chronically lagging timber Industry.
Among consumer durables, where tlie production bases are low, the mid-year increases are the largest for.any commodity grouping. Production of civilian radio receivers, for example, roseer;ent over theonths8 against an annual increase ofercent required to meet the* goal. The largest gains were achieved in6acuumnd television8lthough the last item Is running somewhat behind schedule. Absolute output of these commodities, of course. Is still small.
Production plans for all fabrics cotton, wool, and silk were fulfilled-'in the first halfnd attainment of the
Fifth Five Tear Plan's targets is expected,.* Particularly rapid progress is evident in the silk industryj if the hslf-ycar rate of increas? is maintained', the5 goal willf- be exoeeded -tads year. The most imnaa^ianfc- .gpals of the light industry programarehigher quaii1ar:nrcAUets, and, vdder assortment. Ccoelderablen this direction is,-Indicated by the increases In quality products, which lnutstripped production gains-
The poorest performance in the first half4 occurred--in the processed foods /industry- Tablecc*?pares increases inof 'geie'eted! foont products in the first half" over the same periodwth the gain required to meet the4 goals of theprogram.
t
Production increases in all these ccsmeditlea, vith thevegetablefar belov the rates required tone-toethod of reporting usedthe Use-or meat and sausage and the omission of figures if orandurther Indication of seriousof meat has."been held downhange in thedate, vhlchto move slaughtering fromnd-Ir/ implementation of state policy for anherds. n off setting gain vas not achieved -in theof. flsh^whloh rose onlyercente>fS!pejaplythe fi^st halfhus the measures Introduced.
be increase io thc production of cotton fabric^ for the half-yearercent, against theercent per year required5 to reach, the five tear Plan goal. Nevertheless, "the' USSR reported overfulfillmeht of the half-year-plan. The reason for this apparent discrepancy is that six nev combines vere scheduled to come into partial production4 and into fullThus, instead'ofthe constant rate of'grovth! assumed in Tablehe planned rate of growth .accelerates in tod- second half4 and again
** ollows oh p.
*** 3 *he production pf both animal fats and sugar was
Fish output, in the. first half3 wasercent ofthe corresponding period It is- interesting to note6 annualemiannual plan fulfillment reports, this loinstance in which the USSR has reported in Its production-deoline in
Table E
First Half-Year increases acd Planned Yearly Increasesthe .Production,of. Selected. Food Pr-oduets in .the USSR
Percent
Product
First Half of iy54First Half3 */
43 V
t ,
21
product 8
:' 21
fats
oil '
for sources.
introductory re:
In Appep-
C;
Appendix; A*
and sausage, products.
reported.
last year to stimulate agricultural output nave thus far failed" to produce the anticipated results In the processed foods industry.
II-
Despite the "new- course" ln the agricultural economy of the USSR, which was outlinederies-of decreesrospects for Increased food supplies4 have hot appeared to be too favorable. Production of basic foodstuffsncluding meat, fish, dairy products, sugar, and canned-goodshas been befalad schedule. Omission of sugar and butter from the report ia indirect evidence of poorln the production ofrioditles. Large Increases in the sown area.were offset by unfavorable weather conditions In major producing areas, where yields appeared, to be below normal. The reported increaseillion hectares in tho sown area3
he largest annual increase in the Fifth Five Year Planthis isercent increase in tho total scamIs cuite possible that this increment nay include:actual increase
oay thus be less than claimed- For"example, an Increase Ln spring-sown cropson hectares was reported ln Kazakhstan, but lt vas later .stated .that the Increase in harvested acreageould ho leasillion hectares- Plowing of virgin sad unused lands and lands formerly sown in perennial grasses or relegated to fallow could help account for'the large increase In sown area.
A.
Of thc reported, increaseillion hectares in the sownillion hectares vere sown to spring grains, of vhichillion hectares, hovever, were sown to spring wheat. Jfest of the remaining areaillion hectares was probably sowndder grains for livestock feed; corn acreage aloneectares. Attempts to increase grain production in the newly reclaimed areas have met vith great success; the sowing planillion, bee tares was .overfulfilled byercept, and there vere prospectsood harvest' in these areas. The5 goal ofillion hectares is certain or fulf iliment because of fallow plowing alreadyecent decree vhlch Increased the goal toill ion hectares probably is related to the current success In those areas. 2J
Although incentive measures for grain farmoro were recently adopted, in keeping with those effected earlier for tho production of potatoes and vegetables and livestock,reliminary estimates indicated thatrain crop would only approximate the3 crop.
Sown acreages of technical and oil-bearing crops have been expanded, and thia expansion should increase the rsv material base provided by those crops. Extension of the area sown to cottonectares should boost the production of cotton, b/ since most of the increase Is believed to be in the more productive/ irrigated regions.
* Footnote references In arable numerals are to sources Listed in Appendix C.
-
Considerable expansion of the sown area devoted to potatoes and vegetables is indicated by an Increase0 hectares In potato sowings alone. 5/ The sowing plan, however, was underfulf lUed, and it is doubtful, therefore, that-increased production plans were met. As an added inducement to farmers, recent retail price changes have been decreed which make it more profitable for farmers, as well as for trade organizations, to store potatoes, fruits, and vegetables for sale in the off-season. 6/
B. Livestock.
In general, livestock numbers were greater,4 than they wereonths earlier. It ls estimated that cattlewere betweenillion andillion head, of which aboutillion were cows, and that swine,percent Increaseotaled betweenillion andillion head. Although flocks of sheep owned by collective farms decreasedercent because of large winter losses, an over-all increaseercent was made possibleharp- increase in the private holdings of collective farmers.
Although it ls too early to assess the degree of success of the "new course" in .the Soviet livestock industry, it appears that the incentive measures outlined in the livestock decree of3 are bringing about the desired results. or the first time, changes in private holdings ofereorted, with specific increases claimed. Althoughercent-increase in cows held by collective farmers was less than thatfor the socialised sector, the increase in absolute numbers was probably greater becausepercent of all cows are owned privately ln the USSR. percent increase in calves owned by collective farmers, the proportion of cows held in the private sector should continue to increase in the future. Private holdings of swine and sheep show significant increases ofndercent respectively
It is evident that the Russians are making genuine attempts to increase future supplies of meat, but it also is obvious that the building, up of herds precludes increased slaughterings of Immediate supplies of meat will not be Increased significantly. The meat and dairy industry reported onlyercent of planfor theonths Tne production of meat was cloaked in the cctnDined reporting of meat and sausage productG, whici.
-
increasedercent over the first half It vould be impossible, ln any event, to estimate tbe annual production of meat on the basis of the mid-year plan fulfillment report,.for two reasons: are fattened during, the spring, summer,early fall months,laughtering has been shifted 1ram the first quarter to the last quarter of the year.
C jjaehjne.ry.
Although seme categories of agricultural machinery were not reported in the mid-year report, production in the first half4 shows in general appreciable gains over the first halfs shown in Table 3-
Table 3
First/ Half-Year Increases in tbe Productiongricultural Machinery in the4
Percent
.Half
Tractor
Tractor
Self-propelled
Cotton-harvesting
Orain-cleaning
Sugar beet
onth production plans for tractors, potato planters foi1 BqjBare-cluster planting, tractor-drawn seed drills, sugar beet combines, grain-cleaning machinery, self-propelled mowers, potato-harveotlng combines, cotton-harvesting machines, and complex threshers were reported overfulfilled.
percent increase in tractor production ia probably due to the amphaolo on increasing production of cultivating tractora. Conversion of this Increasehoraepovcr (hp) units wouldlower the increase considerably. Although the Fifth Five Tear Plan goalpercent increaseJ which is believed to behp units, was revised upwardt le estimated that the5 goale will be net Deliveries0hp unitsto agriculture in the first half4percent increase over3 annual rate. This increase ls almost identical to the one which would be expected in order to meet the7 goal.
Since the production of grain combines vas omitted from theeport, an expected decrease In production may be taking place. Assuming the delivery rate0 units to agriculture in theonthsfre self-propelled, to be actual production, production4 will benits less than3 production0 units if this rate lo8/
Production of potato-harvesting combines and sugar beet-harvesting combines has been emphasized only during theears. Mass produetion of potato harvesters vas begun only in January. Since outputnits vas termed an overfulf illment of the plan, the expected increase in tho rate of production should Insure achievement of4 plan figure0 units. $J ercent increase in sugar beet combines ls double the annual rate of increase schedulednd overfulfillneht of the plan may be expected.
percent increase in the output of cotton-harvesting machines was reported, actual production ln the first half4 vas onlyercent of tbe goal for the first halfhich vas fulfilled by only
Production of self-propelled movers in the first half4 ls assumed to havenits, the number delivered to agriculture. It is evident that output vas previouslyew level, for thla numberpercent increase overin the first half 4 plans certain of overfulfillment if thw present rate of production ls maintalned.
The scheduled increase4 was to beercent greateri3-
- 13
if deliveries to- agriculture are accepted aa production,of tractor-drawn mowers in tbe firat half4 would have9 volts. Since4 plan figure0 units, IS/ it appears that the rate of production ln the first half4 was higher than planned. The mid-year report did not, however, mention clther-an increase over the first half3 or overfulfillment of the half-year pi-en. Itpossiblereater proportion of the machines was to-be produced in the first half than in the second half4 and that the plan was not met.
Contrary to expectations, tha production of tractor plows and tractor cultivators increased, byercent, respectively. DcoThaacB had "been expected because of the already high level of mechanluttcto achieved In plowing and cultivating. The increases are Indicative of the added, retirements, necessitated by the increased acreages to be plowed4 Estimated production" will still be lower than,ha poet war high year.
Deepite significant increases lu agricultural machinerysome of these gains are offset by poor maintenance and lack of adequate shelter from the weather, which result in premature deterioration of machines. Poor labor organization and inefficient utilisation, vhiKsa contribute greatly to low agricultural productivity,been topicshronic criticism of the agricultural edcoiomy in the past;*'
ertilizers.
Aa far as is known, the Fifth Five Tear Plan eoala for mineral fertilisers were not revised. On thef the announced goal ofpercent increase and the percentage increases reportedn sJunial rote of increase ofercenta necessary to fulfillear goal (see Table If). Recently announced plans for large production increases lnandwill not affect production rates under the Fifth Five Year Plan, eincn planning and cDestruction of new plants generally takesears.
percent increase reported for the first half4 over the first half3 is termed on "overfulfillment" of the plan. Althoughpercent Increase is scheduled duringe*r
P.bove.
- 14 .
his increase doea not have to occur evenly over that period. It is possible that the yearly plan has been revised or thatgreater increase la scheduled for the last half4ince nev production facilities scheduled in the Fifth Five Year plan vould probably be put Into operation in the last year or tvo of the plan.
percent Increase vill not allowhange in the present pattern of fertiliserercent for cotton and sugar beets. The fact that lime, as usual. Is not mentioned Is further indication that soil productivity in the areas of adequatewill continue at present low levels.
Although the supply of local fertilisers should become more .plentifulesult of the livestock Increases, lt Is plainly evident that increases in food crop production* and the next fev years must come from the expansion of sown areas rather than from increases ln the production of mineral fertilizers.
HI. Capital Investment.*
The volume of Soviet capital investment in tbe first half4 vaaercent higher than in the corresponding periodhis la tho largest such increase reported during tbe Fifth Five Year Plan, but this high rate of Increase is in great part explained (and offset) by the' relatively low rate of increase achieved during .the first half Investment in the latter period vasercent higher than ln the same periodrincipally because Of project suspensions, nev project planning, and resourceInvolved ln the shift of Investment plans vhlch followed Stalin's death. Nevertheless, as shown in Tablethe achieved rate of increase. If maintainedhould completely offset the shortfall in investment3 and leave onlyercent Increase54 required to fulfill the goal of the Fifth Five Year Plan.
# Plan fulfillment reporting of capital investment is In gross terms. Capital repairs and collective farm investment are excluded. The unit of measure is volume increases computed In5
** TableV follows -on Seeor computations and -further discussion.
-
Table 4
Annual Increases- in Capital Inveotrawnt
In -tne USSR In the Fifth Five Year Plan Period
Percent
_
b/
sJ
Appendix B.
rate.
perceatmaintainedogoal of the Fifth Five Year Plan.
The Fifth Five Year Plan calls far ah Increase in volume ofduring thefercent ln comparison withduring the Fourth.Five Year .plan. ndicates progress toward this goal. The Plan also provides, however, that investment expenditures should Increase by onlyercent, with the remainingercent to be covered by lowered costs derived from increased labor productivity, lowered overhead expenditures, and lowered prices of building materials and machinery. In other words, decreased construction and machinery costs are to increase the valix of'the current investment ruble to an extent that theercent more measured in current rubles would resultore Investment measured in constant rubles.
Although the Investment volume goalpercent Increase seems like-iyof achievement, the cost of this program willreat deal more than planned. Instead of making investment expenditures onlyercent greater than in the, the USSR willspend at leastercent more.** Reports on the plan for cost
* elow.
his figure is based on estimated actual expenditures in current rubles. Estimates are made on tbe basis of information on announced volume increases in total investment and cost changes.
-
reduction ln construction show chronic failure to meet annual torgeteear goal for labor productivity In construction, calling for an output per construction worker5 ofercent, more than, has ia fact been abandoned. ndicates that, In order to racover theabor productivity would.have to'riee by; about-:L3 percentnd again5 to meet-this target. Instead/ however. Finance "Minister Zverev In hie April budget address reported4 plan called forercent increase in construction laborndicating that no hopes are entertained bf recovering the ground lost earlier, in the- Plan period-
Table 5
Planned, and Achieved Annual Increases in Construction Labor Productivity in the- Fifth Five-Tear Plan/
I
, - Percent
7 4
%s
7
.
/ ;
a- For sources, see Introductory remarks ln Appendix C. . . .
annually to meet the goal ofFive Year Plan.
planHalf-year rate.
Construction, which, according to Soviet policy and practice, has regularly accounted for aboutercent of total Investment, is advancing less rapidly than investmenthole. iliment of the construction plan byercent Vj/light absolute decline in the volume ofnd over-fulfillment of equipment deliveries was required to achieveercent rise in total investment. Cutbacks madeo the grandiose projects of the "Stalin Plan for the Transformation of nature" tended to lower the construction component of investment
-
relative to the equipaent ceoponent. neither of the two contractor. Dioietri.es fulfilled the plan in the first half of It is pasDlhle that the USSR, faced vith mounting difficulties In amda-taJafog the pace of construct ion increases, growing reeouipoeat needs,elatively advanced capital geada industry, has altered the pMpsattdratio as* construct loo toIn investment
nvestment increases by induatry and econcoic sector In tha firstofvar the ssae period3 are shovn in-
* able 6
First Half-year Increases in the Volume of Capital Investment in the USSR
' *
e
8 a/
53 / 20
Half
Electric pover Coal
Ferrous metallurgy Machine building Construction materials Timber and paper Light and food industry Transport and communications Agriculture Trade, aod cooperatives Housing
only.
only.
These Increases are in tense of5 prices andcannot with precision be compered* planned Increases,
-
which were given by Zverev in terms of planned expenditures of current rubles. The cornparlsons shown inowever, are reliable enough to useasis for estimating, whether or not fulfillment seems likely on the basis of performance in tbe first half year. Oath figures for heavy Industry suggest that the prospects forpercent increase in investment expenditures are good. Similarly, the modest planned increases ln investment in transport and trade are likely to be achieved, but the ambitious programs for centralized investment in the light and food industries, agriculture, and housing appear to be in danger of underfulfiliment.
Investment in ferrous metallurgy wasercent greater in the first half4 than ln the corresponding period The planned increase is unknown, but lt Is estimated that, in order to support planned levels of output, the industry requiredercent more capitalhanhange In investmentsubstantial underfulfillclont4 is indicated.
4 investment plan callsenewed emphasis onin the coal Industry. DuringU9 period, this industry
* ollows on* Tbe capital requirements estimates' were derived as follows:
&. Changes ln Iron and steel production were computed fromestimates. (The production estimates3 aro based on official Soviet announcements. stimate was derived by Interpolation between the 3 estimate and the forecast5 production, which ie slightly below the Fifth Five Year Plan goal.)
and steel production increases due to Increased produovof the existing capital vere estimated. (Thisestimate vas subsequently confirmed ln theplan fulfillment report.) They were then deductedtotal Increases in production. The remainder wasbe production for vhlch nev capital was required.
estimates of output from new capital were multipliedratios derived from US data. Theare estimates of requirements for new capital inferrous metallurgy industry, expressedollars.
Estimated replacement capital requirements vere added to the requirements for new capital to obtain total capitalents.
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'SaMe 7
iPIssuiad IncrWXma in'-JnreetAent jU^ndltures and Reportedthe-VoluBe of Investment
he USSR
.
3eavy industry
Light, andd.itry
Agriculture
and cooper
Transport and ccaamnxisatlt
Housing
. See Appendix B. Trade only. Transport..
90
BlGlon ' lp*) 1 Ruhlts) h
60
M
T-7 .
Annual
Inotfeasea In Expatkllturas
e* 75
Actual Iaceaaacs lnFirst/Half* .over Flrap Half
53
-
arge aad Increasing share of investment funds, hutnvestment in tbe coal industry tended, to level off, and an absolute decline le believed, to have occurred2percent increase in coal Investment in the first halfs the largest rate of Increase reported for this Industry The fact that even this heavy increase failed tothe planharp reversal of investment policy in the coal industry.
percent Increase reported for investment in the machine-building industry is the largest for any comparable period during the postwar years. This gain probably is due in part toIn new or expanded plant arid.equipment required to produce machinery and equipmeat for implementation of the new consumer goods program.
porceot increase reported for investment in tbe .electric power industry la not far belowpercent rise In current ruble expendituresut there are indications of considerable difficulty in carrying out the plan fox Increasing generating capacity during the/Fifth Jive Tear Plan. A. recent Soviet statement indicated probaaje downward -revision of5 goal for installedercent0 to/ Even theumber of large hydroelectric stationswhich is doubtfulwould not make up for the underfulfillments of theears of the pinnning period. 2ft/ Expanded outputarge hydroturblnes and hydrogenerstorehas taken place at the expense" of steam turbines and turbogenerators, and construction of smaller thermal electric .plants appears to have been reduced ln order toa series of large, costly -bydrcelectrte projects.
Investment expenditures in current rubles In the light and food 'Industry are scheduledise by 6ft percent, and nearly -ftQ percent of the total Increase Ln Industrial investment isto this industry, in the first halffttS-percent gain in investment .volume over the same period3 was reported, suggest', thatart of this ambitious program will be fulfilled. e less, this rate of Increaseimes the rate for the entire economyimes the rate- obtaining for this industry3 "jm represents substantial progress toward the Soviet goal of higherlevels.
Expenditures on state urban housing were planned to increase frou
t billion rubles35 billion rublesft, an increaw
-
ofercent. Tbe amount of housing space to bc built was expected to increase fromillion square aotcrs38 million square metersise of onth plan results indicate that the volume of investment expenditures Increased by onlyercent. Many industrial ministries, the ccesaunal bank (which is responsible for loans for privatend local municipalities have been criticized, as in past years, for their failure to fulfill the housing plan.
It ie doubtful whether total funds allocated for housingk will bc used or total planned space completed.
IV. Labor Force and Labor Productivity.
The fulfillment of industrial output goals in the first half* (asequired above-plan Increases in the labor force to compensate for failures to Beat labor productivity targets. Soviet labor force figuresre shown ln hows that5 goalilllon workers and employees in the national economy has already been surpassed. art of this Increase la dueookkeeping transfer of collective farmers to the category of state agricultural workers,ear target will be exceeded this year even after deduction of this group. The Fifth Five Year Plan goal for the Industrial labor force was exceeded
The Fifth Five Year Plan calledpercent increases in both the Industrial labor force and the total labor force. Since this rate Of increase is less than the rate of increase in working-age population during the sameeclining rate of labor participation by young persons, old persons, and voaen evidently vas intended. Expandedprograms indicate declining labor participation by young persons. The overfulfillment of labor force goals, therefore,j and the first half* aust have been achieved by heavierthan foreseen of women and older persons. These unplannedare enabling the USSR to sect Industrial output targets, despite failure to fulflLl plans for increased output per worker
ollows on Soviet annual plan fulfillment reports regularly give absoLute figures for the numbers of workers and employees In the nationalbut not for those in industry alone. Changes in industrialare computed from data on changes in gross industrial output ana Industrial labor productivity.
- 22
Table 8
Civilian Labor Force in the*
Millions
farm workers a.
and employees by
c/ 6 7 bo.3
State agricultural .
Total labor force - 9 5 2 9 0
at 4 figures ore estimatedecentnd plandata. For these data, see Introductory remarks ln Appendix C. b. The July figures are obtained from sources listed in introductory remarks in Appendix C For the seasonal adjustments required, see source
e.. Obtained by subtracting state agricultural workers from workers and employees.
Official Soviet dataabor, productivity, like those on gross industrial .output, are difficult to analyse, for similar restsone. They are of significance as indiaators of trends and as the data by which Soviat planners measure and project. Increases in industrial labor productivity during the Fourth Five Year Plan wereercent5 percent3 percentndercent data for the Fifth Five Year Plan period are shown in
The Increases of the first halff they are maintained throughout this year, will reverse the declines in the rate of grovth which have thus far characterized tbe Fifth Five Year Plan. 5 goalspercent increase in industrypercent gain in construction, however, will not be met. These goals have in fact been abandoned. ompounding of increases0 shows that labor productivity during theears increased byercent'
ollows on
-
Table 9
Annual Increases in Labor Productivity in Industry and Construction in the USSR
Percent
sources, sec introductoryin Appendix C.
rate-
in Induatry andercent in construction. Achievement of the5 goals would therefore require,nnual gains ofercent andercent, respectively, vhereas the explicit targexaUercentndicating that no hopes are entertained of making up the ground lost
1
ndicates that the shift of workers to agriculture required by the new economic policy is being successfully carried out. Present estimates indicate that total agricultural employment is nowercent greater than at the endith nearly all the increase occurring in the state sector. The most significant feature of this increment has been the sending of moreillion workers in the past year from other sectors of the economy to state farms and machln* tractor stations, where many of them will bring advanced skills to such key problems as agronomic techniques, mechanlaatIon, and animal In an Innovation in Soviet labor policy, two-thirds of4 graduates of trade schools have been assigned to agriculture.
* It is interesting to note thatates are those which,
if achieved every yearears, would result in compound increase*
ofndercent, exactly those specified in the Fifth Five Year
Plan.
V. Trade.
A. Domestic.
Despite candid .Soviet admissions that the demand for certain consumer goods is not being met satisfactorily in some areas of the USSR, state and cooperative retail trade increasedpercent (in gcoparative prices) in theonthsk over the same period Trade In the rural areas, which is handled by the consumer cooperatives, increasedercent over the same period- Sincepercent increase3 was plannedaintenancepercent increase wouldlgnif leant overfulf Iliment of the plan. In fact, however,percent increase achieved during the first half-year is not so great as it initially appears. As indicated inhis increase Is actually the resultparcent increase reported for'the first quarter4 over the-same periodhich does notomparatively greater volume of trade to be expected4 but rather reflects the small base upon which the increase was computed. Thus, because of the larger base .ofthe estimated, increase ofercent during the second quarters probably morehe rate to be expected.for the second half
Table 10
increases in Retail Trade Turnover in the USSR
Percent
2
a/
y
a/
a/
3
a/'
b/
d/
b/
b/
b/
y
Fulfillment oflan ahould be attained easily, since ao increase of onlyercent io necessary to meet the planned goal ofpercent. Supplies of foodstuffs, especially meat products and animal fats, which admittedly are in short supply, could heto be more plentiful in the second half because of slaughterings which take place in the last quarter. Despite the numerous priceannounced in the postwar years, however, prices of food and industrial commodities remain Ita andercent, respectively,
5 goalerccnt Increase0ill probably be achieved and eveninvestment in trade, which is plannedillionproceeding above plan. Although production of in-
dividual commodities is increasing, more expensive commodities, whichreater portion of the total,trong factorthe fulfillment of the plan. hows data on increases in retail turnover in state and cooperative markets.
As indicated byales of most individual food and manufactured commodities appear to be progressing above tbe scheduled Fifth Five Year Plan goals. The greatest percentage increases for theonths* are reported for sales of consumer durable itemssshlngercent; vacuumercent;ercent; and television sets,ercent. Since these are still high-priced luxury items, large percentageln sales do not reflect comparable absolute increases,of the previous low bases of comparison.
A comparison of increases ln production and sales of individual commodities, as shown inindicates quite clearly thatpercent increase in trade turnover reported for* "as not achieved by production increases alone. The disparities betweenand sales say be caused by several factorsl) upgrading and repricing ofreater weight of more expensivemphasis on higher qualitylearance sales of goods carried over from the previous year,unnelingigi ercentage of total trade through state trade channels than ln the past. Imports and releases from state reserves may have made up deficits in some commodities.
* Tableollows on* Tableollows on
-
Table 11
Increases in State and Cooperative Retail Trade .Turnover in the USSR ln the Fifth Five Year Flan) a/
Percent
)
Rate of Annual Xncreageirst Half4
Ccnmodlty
G^&3
a
oils
28
machineb
b/
trade
on the basis of reported annual percentage increases. For sources, see Introductory remarks In Appendix C. b. Watches and1
Table-u2 .v
. Cacfresees -SM'ttte rVcOuctlos -and. Sale's of Consumer Goods in line SSSR Duriag the First BaiT
' ! " - " -First Half os'lSS-i
O^oaltY ;/ Bales
Wat and
nils? proametr-
"
Tea'
Ootfton9
Sip. fabrics-Vi&
Woo^flnbrlc-.
BaftSe- "
Tele-^aion receivers
Phoapgranas'-- -' JS133
refrigerators- O+
Vacuum cleeaera1' -aft*)
fieving aacbtbea'- V
-
There la little doubt that fulfillment of the planned increase In trade turnover depends,ignificant degree, on fulfillment of plana for Increasing the share of more expensive goods ln the trade turnover index. Thla is being done not only by bettering the quality of mass consumer goods and by increasing tho volume of luxury goods (such as radio and'television sets, watches,-and appliances) available to the population but also probably by the simple expedient of Cumulatively, those factors vhlch result in the marketingroportionately greater percentage of more expensive goods are probably responsibleignificant portion of the increase in trade turnover and are to be held accountable for most of the difference between increases in production and trade of the various cttmaodltlea.
Sincehe USSR has attempted to channel more trade through the state trading network. Commission sales were begun In an effort to Induce farmers to sell their surplus produce to cooperatives at higher than contract and obligatory deliveries, vhlch ostensibly vould reduce trsde turnover on the collective farm market. This plan has not been very successful, and trade organisations have -been severely criticized because of it. In fact, the omission of reference to tha collective farm market in the mid-year report may indicate that trade isevel higher than that desired by the government - A. recent decree raising procurement prices for potatoes, fruits, and vegetables in the off-season may be an added Inducement for farmers, not only to store their produce for sale during the off-season but also to sell through state channels.
esult of trade pacts concludedumber of countries after the death of Stalin, Increased imports of foodstuffs wereduring the last quarter3 and continuing the total Soviet imports of consumer goods probably represent lessercent of estimated domestic sales of consumer goods ln the USSR, increased sales of goodaspecially meat, butter, fats, and other foodstuffsare probably related to imports.
There is some evidence which indicates that food supplies in the state markets vere bolstered by releases from stockpiles. Aoftated that substantial quantities of canned foods, including corn, peas, and several kinds of fish, were appearing in the retail food stores of Itoscow. The foods were packed to tin cans which had been treated with heavy grease, and the labels vere faded and stained, indicating that they were such older than most other canned foods on display and therefore may have beenfrom reserve food stocks.
-
B- Foreign.
Bovlei foreign-td-tde In the first halfft Although itt let not known whether
^percent Lne$jaaBe refers to tfcade with the Free world, with- other ijpvi'ct Bloc countr-iea, or'with both, .there levidence that Soviet ffbrel-ga- trade inereaaed appreciablyft. BetLjBatee of the valueoviet ttrade turnover with the Free World in tha first quarterarg* Increase, aboutercent, over the sasa period Ae shown inowever, the base or cfloujarleon waa. relatively low.
Table 13
Tj-ade of tha USSR with, the Free Voxld aauarynMarcii1
... urreat..US t
Scarisf Imports
Sovfiet experts
jr.nrlaarily fron 'Value 'ferles" infotawWon prepared by the Inter-itional Econonlo Anatyeia Division,
ofeener ce. Department of
ThelscreAac Lnree World trade turnover la the firuarter* Is undoubtedly tbe continuationrade spurt evi danced during the latter half3 sod related to the large aua-ber of trade peats concluded after the death of Stalin. Trade vas especially active with those countries which bad negotiated to carport foodstuffs to the USSR. For example, Danish exports to the USSRquarterU consisted almost entirely.af meat and other feedutch exports were large In butter; and Iforwegliv. exports, included herring and hardejjad fats-
4-.
-
Based on the-percent Increase ln tlie first quartera annual increase,ercent eould be maintained Ln Soviet Free World trad- turnover. In .Implementing such un locreane, however, the USSR prttljabiy would, be confronted with the problemarge trade deficit
ransport
ftstl traffic* in the USSR, which accounts for anf all Soviet freight, increased in the flrat halfver the flrat half Planned output vas not fulfilled. As'by the -declining growth trend in the Fifth Five Tear Plan, the rate of expansion has been slowed down becausehortage of freight cars, especially those suitable for carrying coal, ores, and other bulk materials. Because of the high rate of expansion in earlier years of the' Fifth Fiva Tear Plan, the scheduled Increase ofn rail trafficS/ will be achieved percent Increases likelyespite an estimated increase ofercentaking overfulfilment of the lower Limits of the'plannedertainty. Tableshows the growth.of railroad transport in tbe Fifth Five Year Plan. .
Although shipment plans ln the first half4 were fulfilled for oil, coke, iron aod steel and scrap, grain, and numerousand other manufactured products, plans for loading coal, timber, building materials, and ore were not met. (The goal for loading coal..was underfulfllledillion tons.) Since these are the four largest items ln Soviet railroad traffic and since they are all shipped in gondola or hopper cars, lt is evident that these cars are In short supply. Coke and scrap are shipped ln gondolas, but shortages to carry coal and ore may have resulted ln greater than normal demand for scrap to make up for pig Iron not produced, since more steel vould result from carrying scrap than from carrying ore and the coal vith vhlch to smelt It- It Is quite possible thatiliment of tbe construction plan for the first half4 can be partially linked to the underfulf iliment of shipping plans for timber and building materials. Although underfulf Iliment of the coal-loading planefinite transport failure, lt is less than 2of Soviet coal production. ontributing factor may have been
* Ifo consideration Is given to highway and air transport, which account for lesBercent of all Soviet freight traffic. ** Tableollows on
-
Table 14
Increases in Railroad. Freight Traffic a/ in the
Annual Increase
(Percent).
4
lan
(freight turnover) lsto refer to traffic, measured The increase reportedW, however, have reflected
on the basis of thelnxavcrage daily carload logsof average carload plan bypercent reported at mid-year. see introductory remarks in0.
tha past severe Winter, and ah not only delayed trains but also may have caused more than normal freezing Of coal to cars in transit, which creates unloading problems.
* The present shortage of freight cars may indirectly stem from the Kremlin order to cut car outputhich23 dfLiverie*. The plan for freight car output washen shortages began to develop for certain types Of cars, principally gondola, hopper, and refrigerator cars- Thus theime nt of the mid-year plan for freight car product Jot* probably refersew revised plan, with higher goals. It isarge reserve of laid-up ears exists in the USSR, but these are mainlyxle boxcars whichuited for transporting coal, ores, and other bulk commodities.
-
The volume of rail traffic tn theonthsU was the heaviest in Soviet history. Although the average daily carloading plan waahe average load per car was not up to plan. Since average load per car ls already high, large increases could hardly be expected. Two factors may possibly explain failure to meet the plan: (l) pressing fnto service ofxle cars, which would reduce tonnage per car because of their smaller size,ncreased shipments of consumer goods and manufactures, which weigh less per car. load than raw materials.
Extensive investment in heavy locomotives wnd freight cars is scheduled for the near future, together with improvement in traffic control, equipment. Delivery of needed.equipment in quantity,will not-take place before the andnd it is expected, therefore, that heavy bulk commodities will not move' in the desired amounts. oderate rate of traffic growth, probablyercent, is expected
It ls estimated that river and sea transport contributeercent,:xespeetively, ^he tota^
carried in the USSR- Onlyercent of thai freight turnover plan was fulfilled in the first half. ereent increase in freight turnover during the first halfU over the first half3 was announced, but this rate is well below the annualreaseb needed to5 goals, as shown inThe
Table 15
Increases itt River^and'Sea.Freight' Traffic in-the. USSR
-Percent
Increases
Transport.
12
- 80
Transport
9
ii y
- 60
For sources, see introductory remarks tn. 'It is assumed thatercent increase uas equal for both river and sea transport.
-
APPENDIX A
TAKJEl'S KOH THE PRODULTIOH OF PROCESSED FOODS IN THE USSR4
Soviet goals4umber of Important food products were given in the Joint decree of the Soviet Council of Ministers and the Party Central Committee "On the Expansion of Output of Foodstuffs and Improvement in Theirublished in the Soviet press on In most cases these targets, which refer only to state production, were given both in absolute terms and as percentages0 production.
The increase In production required43 can beby compounding the increases reported0 to3 figure in termshich can then be compared with4 plan in terms Tho increases are shown in
Table 16
Increases in the Production of Selected Pood Products in the
Product
)
43 (Percent)
y
fi/
fi/ 4 Plan
products
fats
oil
by compounding annual increases given in plan fulfillment reports. For sources, see introductory remarks in Appendix C.
35
BLANK PAGE
IN THE USSR
Inis set-omparison of annual and mid-year rates of increase in the volume of capital investment in order toasis for judging the probability that half-year rates villannual rates.
Table 17
Rates of Annual Increase in Capitalthe USSRand
First Half Year Year
' ' ;
Total
Electric
light and
Total
Electric
Light and
Machine
Footnote for Tabicollovs an
Table 17
Hates of Annual Increase in Capital investment in the USSR a/g-
-. .Half Year Year
Total
Electric
Machine
Construction
: '
Total investment - k
Light and
a. For sources, see Introductory remarks in Appendix C-
In Tablehe mid-year increase isercent of the annual increase in about one-half of the cases andercent of the annual increase in more than three-quarters of the cases.
The Fifth Five Year Plan for capital investment is as follows:
o increase the total volume of state capital constructionut to increase state allocations for this construction only approximatelyercent, as compared with the Fourth Five Year Plan, covering the difference ofercent through lowering the cost of construction by way of Increased laborlowered overhead expenditures, and lowered prices of building materials and equipment. 3JJ/
-
Since increases in the volume of investment, as given in the periodic plan fulfillment reports, arc measured in constantnnual and cumulative investment volumes can he related. The resultB are presented lnhich shows that,nvestment, total investment in the years of the Fourth Five Year Plan; that the goal for the Fifth Five Year Plan is;ercent. of -this goal had been accomplished by the endnd that, if theincrease of l4 percent is maintainedurther gainercent will be required5 to reach the target of the Fifth Five Year Plan.
Table 18
Increases in the Volume of Centralised Capital Investment in the USSR
Increase
h/
e/
d/
For sources, see Introductory remarkB in Appendix C.
Five Year Plan period
rate.
percent rate is maintained throughreach the target of Fifth Five Year Plan.
-
BLANK PAGE
APPENDIX C
SOURCES ABD. EVALUATION OP SOURCES
This report is based upon Soviet plan fulfillment reports, issued quarterly2 and semiannually thereafter, and on CIA analyses of thceport.
All data in this report, unless otherwise indicated, are taken from the annual and semiannual Soviet plan fulfillment reports- These reports appeared in the Soviet press on the following dates: 80879371nd Translations of these reports, beginning with the annual reportppear in the following numbers of the Current Digest of the Soviet8 annual: Vol. I, (to-9 annual: Vol- II, No.0 annual; Vol- Ill, NO.1 annual: Vol. IV, No.2 annual: Vol- V, Ko.3 semiannual: Vol. V,3 annual: Vol. VI, Wo." semiannual: not published as ofI,
All Soviet newspapers, hooks, and Journals are considered to be highly reliable. Although the FBIS publications are primarilyslight errors in broadcast intercept and subsequentake them slightly less reliable sources than the originals.
Evaluations, following the classification entry and designatedave thc following significance:
Source of
Doc
- Documentary
Confirmed by other sources
-
reliable
Probably true
-
rellablp
Possibly true
reliable
Doubtful
-
usually reliable
Probably false
-
reliable
Cannot be judp.ed
-
be judged
"Documentary" refers to original documents of foreign governments and organizations; copies or translations of auch documentstaff officer; or information extracted from such documentstaff officer) all of which may carry the field evaluation "Documentary-"
Evaluations not otherwise designated ore those appearing on the cited document; those designated *RR* are by the author of this Ho "HR" evaluation is given when the author agrees with the evaluation on the cited document.
Dallv Report,to as Bally7, p. CC 7- U
. Eval..
Report,. .
k..
7P-- U
Eval.c-
U. Eval..
U- Eval- RR AT2.
FBIS,. U. Eval..
Vostoka, V- :Eval..
U- Eval..
Ibid.
U. Eval..
Diachkov, Statlallkn kapitalnogo stroitol'stva,
Gosstatizdat, U. Eval..
Pravda, U. Eval.-
Koaaunist. U- Eval..
18.
Pravda, U. Eval..
3. U Eval.
m* V, r>
- dp -
Voprosy Bkonoalki, Ho. u. Eval..
28. Prayda, 0. lYal..
Report,, p. CC 7. u"
Eval..
U. Eval..
Report., U
Eval..
..
33- 6. AA 3. U
"Eval. Planovoye Kbcrycystvo, U. Ev
Pravda, Eval..
0.
0 U. Eval..
Original document.
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