Created: 8/24/1954

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Submitted e DDUCTOR Or CENTRAL INTRJJGmtelllcenee orpantutlOfii participated tn (A* preparation o/ (AM Mtifitafc: TAe Central Infeflioenoe Agency and tha Intelligence organisation] of tht Department* ol Stole, the Army, the Navy, tht Air force, and Tha Joint Staff Conctuitd tn try the INTELLIOKNCE ADVISORY CXIHUITTKE on Concurring were the Spectal AtUstont Intelligence. Department of State; tht Aatttant Chief ot. Department of tha Army: the Director of Naval Intelligence; the Director ol Intelligence, USAF; the Deputy Director lor InteUigence, Tht Joint Staff; the Atomic CommUHon fteprtientattoe to the IAC. The Assistant to the Director, Federal Bureau ol Investigation, abstained, the nbfect being ouUide ol tt* furUdictton.


assistatt director one



his estimate was disseminated by the Central Intelligence Agency. This copy ia for the Information and use of the recipient indicated on the front cover and ofunder his jurisdictioneed to know basis. Additional essential dissemination may be the following officials within their respective departments:

a. Special Assistant to the Secretary for Intelligence, for the Department ol


Chief of, for the Department of the Army

of Naval Intelligence, for the Department of the Navy

of Intelligence. USAF, for the Department of the Air Force

Director for totemgence. Joint Staff, for the Joint Staff

of Intelligence, AEC, for thc Atomic Energy Commission

to the Director, FBI, for the Federal Bureau of Investigation

Director for Collection and Dissemination, CIA, lor any otheror Agency

This copy may be retained, or destroyed by burning in accordance withsecurity regulations, or returned to the Central Intelligence Agency bywith the Office of Collection and Dissemination, CIA.

When an estimate Is disseminated overseas, the overseas recipients may retain Iteriod not in excess of one year. At the end of this period, the estimate should either be destroyed, returned to thc forwarding agency, or permission should beof the forwarding agency to retain it in accordance with2

d lerRTBunoN:

White House

National Security council

Department of State

Department of Defenae

Foreign OperaUons Administration

OperaUons Coordinating Board

Atomic Energy Commission

Federal Bureau of Investigation

United States InforaiaUoa Agency



To esUmate Uie current situation and probable developments in Uie European Satellites through


Kremlin almost certainly regards the maintenance of the Soviet position in Eastern Europe as essential (or:ie military security of the USSR through possession of advanced bases and defensive positions outsidefrontiers; (b) adding to Uie economic and military resources of the USSR; (c) upholding the prestige of Uie USSR in its role as leader of the world Communist movement; and (d) decking Uie re-emergenceowerful Germany allied with the West. We believe, therefore, Uiat Uie Kremlin will continue to pushits long-term plans for integration of the Satellite countries into the Soviet system, though almost certainly not,the period of this estimate, to the point of outright incorporation into thc USSR.

The emergenceew leadership in Moscow has not weakened Soviet control over the Satellites. This control remains virtually complete and is unlikely toor to be successfully challenged from within during the period of this csti-

As used in this paper, the term "Satellites-means "European Satellites'1 and Includes East Oermany. Poland, Czechoslovakia. Hungary,Bulgaria, and Albania.

mate. Although the principal obstacle to the Sovietizatlon of Eastern Europe is and will conUnue to be the opposition of the Satellite populations to Communism and Soviet domination, this opposition alone will not seriously impair Sovietor threaten Uie stability of Uiegovernments,

he revisions of Satellite economic plans have not altered Uie Kremlin's basic aim of increasing as rapidly asUie Satellites' contribution toeconomic power. These revisions are aimed primarily at removing the threats to future industrial growth by correcting the imbalances in the Satellite economies resulUng from an overemphasis on heavy industry at Uie expense of agriculture and light industry. In essence, they provide for slowing down Uie expansion of heavy industrynd (or increasing the resources allotted to agriculture and consumer Industries. Nevertheless,economic policies will still beoriented toward development of heavy industry. At the same time, defensewill probably be maintained atpresent or only slightlylevels. We believe Uiat the revised economic programs will notany

significant improvement in the standards of living and that the Satelliteat thc end of this period will be faced with much the same basic economic problems as at present.

By the endhe combined GNP (Gross NaUonal Product) of the Satellites had returned approximately to the levele esUmate that total Satellite GNP3 was about two-fifths that of thc USSR and that this raUo will remain substantially unchangeduring this period the growth rate will probably averageercentas compared with an averageercent annually8

The producUvc capabiliUes of thcconstitute an important addition to Soviet economic strength and warin certain fields. The Satellitesubstantial proportion of Soviet Bloc production of uranium ore; East Germany alone accounts for aboutercent of total Bloc producUon. The Satellites also supply Uie USSR economy substantial quantities of industrial goods,

notably precision instruments, certain chemicals, selected items of machinery and transport equipment, and electrical equipment.

hc Satellite armed forces havea substantial element in the-balance of military power in Europe. WeUiat thc Satellite armies will reach an over-all peacetime strengthen bynd Uiat no substantial increase is likely thereafter. Tlie Satellite air forces now have an estimated TOJcE strengthircraft of alt typesnd we esUmate Uiat byhey will probablytrength, ofill probably be jet fighters. The Satellite naval forces have only minor capabiliUes. We believe Uiat while Uie Satellite armed forces would probably fight well against tradiUonal enemies, their reliability will remain sufTicienUy quesUonable during Uie period of this esUmate toignificant limitation upon iheir military usefulness in event of general war.


oviet policy In Uie Satellites is directed toward developing themtrong area ol the Soviet empire which will increase Soviet power and strengthen the Soviet worldThe Kremlin almost certainly regards Uie maintenance ol the Soviet posiUon in Eastern Europe as essential for:he military security of the USSR through possession of advanced bases andpositions outside Soviet frontiers; (b) adding to Uie economic and military resources of the USSR; (c> upholding the prcsUge ol the USSR in its role as leader of Uie world Communist movement: and (d) checking the re-emergenceowerful Germany allied with the West

e believe that Uie Kremlin will continue to push forward Its long-term plans for in-tegraUon of Uie Satellite countries Into Uie Soviet system, though almost certainly not, during the period of Uie estimate, to the point of outright incorporation into Uie USSRthc next two years Soviet policy willconcentrate on perfecting Uie Soviet mechanism for dirccUng over-all Satelliteand on consolidating Uie posiUon already won, rather than on striking out on any new aggressive campaign of SovicUsaUon. Primary concentration will probably be upon:

a Maintaining the system of controls which bind thc Satellites to the USSR whileto make Communist programs moreto Uie populations;


ontinuing the development of Satellite heavy industrial potential, buteduced rate of growth which will permit greaterlhan in the past on agriculture, and which Is basedore real is tic appraisal of Satellite material and human resources.

c. Strengthening of the Soviet militaryby modernizing airfield and radar net facilities, by increasing the combatand poliUcal reliability of Satellite forces, and by qualitative improvement rather than enlargement of Soviet forces stationed in the Satellites.


Soviel control of the Satellites Is based on the Soviet armed forces stationed ln Eastern Europe, on the MVD {Soviet securityn Soviet diplomatic, economic, and military missions in each Satellite, and is exercised through the Satellite Communist parties and governments. In addition, the USSR exercises direct administrative authority in manythrough Soviet citizens in keyor in command of ministries, armed forces, and industries. Through this system the USSR provides lhe Satellite governments with over-all policy guidance. WhenSatellite leaders are called to Moscow for instructions. Although Moscow permits and encourages programs of cultural, economic, and technical collaboration among tlieUie Soviet control system Is designed to bind the Satellites individually to the USSR rather than lo one another. Enforcement of obedience lo Soviet wishes ls assured by the system's military and police power.

The USSR continues to maintain strong combat-ready forces, totalling anrmy0 security troops,ircraft (estimated actual strength) in Uie Satellites, mosUy in East Germany.Uie deployment of these forces Is based primarily on strategic rather than Internal security considerations, the mere presence or near proximity of Soviet forces has had and is likely to continue lo have Uie effect ofpotenUal resistance. The overtof Soviet troops in suppressing the3 riots in East Germany demon-

strated Soviet willingness to use these forces where necessary. In addition. Uie Satellite armed forces, which are being developedclose Soviet supervision, now totalrmyecurity troops,ircraft (estimated actualhis military development program provides the Soviet Union with important additional means of internal security,of youth, and control.

Under MVD aegis thc various Satellite security services have become Inart of Uie USSR's police mechanism in Eastern Europe.0 they hare beenaccording to Uie MVD pattern, staffed by personnel deemed reliable by the MVD, and brought under MVD controlystem of advisers. The MVD headquarters lngives these services over-all policyand exorcises direct control over liaison between one Satellite service and another.esult of this integration, lhe Sovietnowecurity service oflocal naUonals at its disposal ln each Satellite. This service operates as an arm of Uie MVD in detecting and suppressing all forms of subversion and In maintaining Soviet authority and Uie stability of the Satellite governments. Although some individualmay still occur as an aftermath of the Beria purges, we believe that the effectiveness of the Satellite security services will not be impaired to any material extent.

The Satellite Comunist parties, Uie leaders of which are approved by the Kremlin,the principal instrumentality for Impte-menUng Soviet policy and for Imposing Soviet ideological and msUtuUonal forms upon the Satellite populations. These parties provide the inner core of Satelliteeading role in managerialregulate the local control machinery, and direct Uie "voluntary activiLies" of the people. The complete subservience of theCommunist parUes to Uie new Soviet rulers has been reaffirmed al the recentCommunist Parly congresses, which were attended by top-level Soviet officialshrushchev at thc Polish and CzeclfBartovak


Mikoyan at llie East German, Voroshilov at the Hungarian, Pospelov at the Bulgarian).

The Soviet Union exercises conirol over the economic development of the Satellites by fixing over-all production goals and priorities, by regulating the trade relations of these countries with the USSR, and by supervising their trade with other areas. Satelliteplans are prepared in accordance with general policies Issued by the Soviet Union, but determination of detailed measures toplan objectives Is probablyonly indirectly by Moscow. Now that Hungary and Czechoslovakia have readjusted the timing of their plans, all the Satellites, with thc exception of Bulgaria, have long-term plans which are synchronised with the next Soviet Five-Year. The machinery for coordination of planning is probably the Council of Economic Mutual Assistance (CEMA) which includes the USSR and Satellites as members andermanent headquarters ln Moscow. Soviet control Is exercised. In addition,ystem of tight bilateral trade and financial arrangements.

More subtle aspects ot control in thesystem arise from Increased Satelliteupon Soviet sources of raw materials and certain capital goods, and integration of trading agreements with long-term plans. The effectiveness of this type of control has grown with the reorientation of Satellite trade toward the Soviet Union and the rapidIn the volume of this trade. Soviet control ls also exerted in some cases through joint companies (notably in Rumania,andesser extent In Bulgaria) and by extending long-term credit for suchpurposes as industrial development(notably inlte Sovietalso maintains large economic missions in each Satellite, as well as advisers andto monitor performance by ministries and industries on commitments under trading agreements, and If necessary, to assume direct supervision

Soviet pattern of Intellectual,and religious life is being imposedSatellites. The Satellitea monopoly over thc schools andmedia and have broughtunder the control of theeducational system has beenconform with that in the USSR;and libraries have been purged andrevised to place emphasis onand Communist Indoctrination.of the church has been brokenthe imprisonment of churchexpropriation of church property,of former administrative linksoutside world, and by progressivelythe church of its facilities toyouth. Thc cultural- influence andof family lite have been disruptedand psychologicallynorms, material want and thethe mother to work, obligatoryand the exploitation of smallas unwitting informers on their parents.


Internal Developments

The relationship between Hie Satellites and the USSR remains basically unchanged since the death of Stalin, but the new Soviet leadership hasore flexibletoward tbe Satellites in some cases. The most conspicuous changes are the newpolicies and the recent moves in East Germany, where the Soviet controlhas been abolished and formalgranted. We believe, however, that such changes areransformation of thc facade of Soviet control and that theyefinement rathereduction ot actual control.

The Satellite leadership groups, which have become almost completely reliableontinuous process of selection and purging at the direction of Soviet authorities, have been left relatively unchanged by thc new Soviet rulers.ew newhave become more proroinent^such as the new party first secretaries in Czecho-

Slovakia. Rumania, and Bulgaria, virtually thc same leaders are still in control in eachand there appears lo be little change In their relative influence and power. Moves taken by the Satellites toreaterof "collecUve- leadership areimitations of the Soviet pattern. There has also been In almost all the SatellitesIn conformity with changes made in thc USSRa streamlining of Uie party secretariatseduction In sizeore preciseit ion of functions. In addition. Soviet ambassadors with long experience In Uieservice have been replaced lnPoland, Rumania, Bulgaria, and Hungary by men with extensive party These developments seem toUie conclusion that the new Soviet regime has assigned an even higher priority than ln the past to strengthening Uie party apparatus In Uie Satellite countries.

IS. Thc principal obstacle to thc Sovfetlzation of Eastern Europe is the continued opposiUon of Uie Satellite populations to Communism and Soviel domination. This opposiUon has been intensified by Uie loss ofeduced standard of living, as well as by outraged religious and national feelings, but its efTecUveness is severely constricted by Uie controls imposed on every aspect of the lives of the people. There Is virtually noactive resistance and only litUeacUve resistance. The lattermainly of isolated raids by small armed bands and of individual acts or subversion and sabotage. On the other hand, passivecontinue, to be widespread and torag on economic programs. Tbc more prevalent forms of passive resistance are worker absenteeism, work slowdowns, crop-delivery evasion, increased church attendance, and whispering campaigns.'

he Satellite governments are atlempUng to alleviate unrest byradual im-

etailed estimate of Satellite resistancend potenUaliUcs will be madeucceed-in; NIE. See also the report of the Resistance Intelligenceesistance Activities and Potential In0

provement in standards of living. However, we believe Uiat these governments will beto satisfy consumer cravings on anyscale or to give thereater feeling of security. Populartherefore will probably continue to slow the process of SovletizaUon In Eastern Europe and to limit the economic. poliUcal. andgains which Uie USSR can derive from control of Uie Satellites. Nevertheless, weUiat, during Uie period of this estimate, Soviet authority over the Satellites willintact, that the control system will be further improved, and that Soviet policies In the Satellites will be directed toward UieSovletizaUon of this area. Theof the great majority of Uie Satellitewill continue to delay this process: but. in thc absence of general war. popular dissatisfaction will almost certainly notbeyond the stage of passive resistance and occasional acts of sabotage. Although East Germany's extensive Ues with Westprovide Uiat statereaterpotential than any otherepeUtion of the Juneiots is unlikely.

External Dovolopmonts

uring the past year Uie USSR has made increasing use of the Satellites for poliUcal warfare moves. This has been evident inefforts to further Uie Soviet proposal at the Berlin conferenceuropean security system. Especially noteworthy arc the Polish and Czechoslovak appeals to French opinion which have pointed out the community of interest between Slavic Europe and France against revivalationalist Germany. Pursuant to Soviet wishes the Balkanhaveolicy of seekingof their long strained relations with Yugoslavia and with Greece and Turkey. There is also evidence ot Increasing utilization ol the Satellites by the USSR to suppori the acliviUcs of Communist parties elsewhere In the non-Communist world. For example,has been given substanUal responsibility for support of and guidance to thc Italian Communist Party, while Czechoslovakialoarge degree of responsibility for the parties of Central America, ^adreovcr.

the USSK has further extended its utilization of Satellite diplomatic and trade missions for either joint activities or Independent Soviet operations in Intelligence and political war-faro. During the period of this estimate thc USSK will almost certainly continue to use the Satellites to further Us diplomatic andobjectives In thc non-Communist world.

IV. ECONOMIC DEVELOPMENTS Current Economic Policy in Ihehe Satellites undertook revisions of economic plans whichlike the planin the USSRwere aimed atthe producUon of agricultural commodi-Ues. especially foodstuffs, and ofconsumer goods. The new Satellite plans also stressed expanding thc production of basic raw materials and electric power. These plans provideodest slilft offrom heavy industry to agriculture and light industry, improved exploitation of cxisUng capacity,aterial incenUves program involving concessions to both the collective and private sectors of ogrlculturo and Increased benefits to Uie industrial labor force. Statements by Soviet and Satellite spokesmen have suggested Uiat the revised plans provide for more trade among Uieand for more specialization of producUon. However, further evidence of any recentof the long-standing effort In this general direction is so far lacking.

lie revision of cxisUng programs was occasioned mainly by Uie adverse cumulative effects of overemphasis on heavy industry at Uie expense of agriculture and light industry. While substantial results had been achieved in expanding production in the heavysectors, and In enlarging the nonagricut-turai labor force (by about two-filths. agricultural producUon had not only tailed to recover to prewar levels but had even declined from the level attainedhis lag in agriculture threatened to retard future Industrial growthime whenpopulation increases, industrialization, and the scarcity ot foreign exchanRe madeagricultural production most Moreover, thc situation was further

aggravated by the adoption of goals for Uie heavy machinery and equipment Industries which could not bo supported by the basic materials resources and electric power output of the Satellite economics. The neware intended to remove these threats to continued long-range Industrialhese tactical changes in Satellitespolicy do not alter the Kremlin's basic aim of increasing as rapidly as practicable the Satellites' contribuUon to Soviet economic power. The Satellites during Uie next two years will probably continue to place primary emphasis on expanding the production of basic materials and of energy, while slewing thc expansion of heavy manufacturinguntil the materials-supplying industries have caught up. At Uie same time, defense ouUays will probably be maintained atpresent or slighUy highernd increased resources will be allotted to agriculture and consumer industries. WeUiat it Is unlikely, however, Uiatoutput will be increased significantly during this period. On Uie other hand,of simple consumer durables will probably be increased.

Satellite Economic Growth1

y the endhe combined ONP (Gross NaUonal Product) of Uie Satellites had

'The percentages allocated to defense ln Uiestate budgets are roughly one-half to two-Uilrds of Uie percentage of total budget given to defense In the USSR.

'The eiUmates of Satellite ONPhis secUon arc considered generally reliable for analysts ol trends of Internal economic developments, but because of conceptual and ilaUstlcal problems, tliey are less reliable In lntercountryThe probable margins of rrroc of prodoe-Uon estimates, based on lhe valuaUons of the re sponsible analysts. Imply that the ONP estimates are fairly reliable (considered accurateeighborhood of plus or minusstimates of trends are regarded morethan the estimates of absolute magnitude! Kill maf producUon oi basic materials and energy, such as agricultural products, coal, and electric power, are considered more reliable than estimates of highly manufactured goods, lormachintiy of various types. Data forBulgaria, and Itumania generally are less reliable than lor the other Satellites. ^*

relumed approximately to Uie level" Total Satellite ONP3 was an estimatedillion1 US dollars or about two-fifths lhat of the USSR. We esUmate that total Satellite ONP6 will beillion1 US dollars and that the Satellite share of total Bloe ONP will remain substantiallyduring Uie period of this estimate. (Seclthough Uie growth rate averagedercent annually8t will probably averageercent annually4

the war, aboutercent ofhas been devoted to investmenttwice as much as prewar. Theof economic programsor at least Uie next two years thcof GNP devoted to investmentsomewhat, but as GNP conUnuesthe absolute level of Investmenthole will probablythc same. Assuming that sumsfor defense remain at about theas3 or Increase only slightly,be Increased scope for allocations to

breakdown of Satellite GNP byorigin indicates the rising relativeof industry and the decline ofIn absolute terms industry,communications, and construction, have

NIK-SI. publishedstimate* that Satellite GNP had regained Uie prewar level by the endhis estimate has been revised using new price weights and more extensivereports which resulted In slighuyONP estimates. However, tbe revised estimates areew percentage points of thow made

etailed breakdown by country, see Pig. 2.

grown rapidly above8 level, whileremained well below prewar levels These trends will probably continue throughith only slight improvement ln agriculture.



0 3 ItM


'Not Includingverage.

3 Poland, East Germany, andcontributed overercent of the total Satellite GNP, while Hungary, Rumania, and Bulgaria (in that order) accounted for less thanercent. Adjusted for territorial changes, the output of Bulgaria, Hungary, and Czechoslovakia3 was well above thathile Poland's output was about at the same level, Rumania's slighUy below, and East Germany's aboutercentc believe that Poland, East Germany, and Czechoslovakia will continue to account for overercent of total Satellite GNP during this period. However. Uie shift of Soviet policyore determined buildup of the East German economy will probably be reflected in growlh of thc East German GNPatercent aa more rapid rale than that expected in Uie other0 East Germany will probably outstrip Poland to become the most Important contributor to Satellite GNP.












he distinguishing feature of theprograms imposed on theby the USSR has been the emphasis placed on heavy industries producing capital goods. Over-all Satellite industrial production was back to8 level1 and3 It wasercent above the prewar level. Within the industrial sector the most impressive growth has been ln the production of machinery andhemicals, metals, energy, and building materials,in that order. Output of the light and textile Industries surpassed the prewar level in all the Satellites except East Germany, while production of forest products andfoods generally failed to return to these levels. (Seeuring the period of this estimate over-all Satellite industrialwill probably increase abouter-

cent above3 level, with.primarycontinuing to be on heavy

atellite production of certain keycommodities will continue throughout the period of this estimate to constitute acontribution to the economic strength of the Bloc, particularly in the following fields: a. Machinery and Equipment. Estimated Satellite production3 of machine tools, metal working machinery, electric motors, and steam locomotives ranged from about one-half to about two-thirds that of the USSR, while producUon of freight carsractorsercent, andc estimate that during the next two years Satellite output of these commodities, except metal working machinery and tractors, will increaseaster rate than Uiat of the USSR.


Satellite Production as










king Machinery



not Included. ProducUon data not available. However, output Is relatively unimportant.

Metals Production. Satellite output of finished steel and pig iron3 was aboulercent andercent, respectively, ofproduction. Satellite production oflead was aboutercent, aluminumercent, primary copperercent of So-

viet producUon. During Uie period of this estimate, the Satellite-USSR ratio of steel, iron, and copper production will probablyabout Uie same, while that of aluminum production will substantially increase, and lead substantially decrease.


Finished Steel Pig Iron Pnmary Copper Aluminum Ingot Pnmary Lead






LO 51

Satellite ProducUon as Percent of USSR


32 10

c. Energy ProducUon. Satellite production of lignite and brown coal3 wasimes that of thc USSR, while producUon of hard coal and electric power was about one-half as much. Satellite production of

crude oil was approximately one-fifth thatSoviet Union. Satellite producUon ofproducts wasimes

that of the USSR, but this ratio wiU be reduced loimes by the end

ESTIMATED SOVIET AMD SATEJJ.ITE PRODUCTION3 ANDbillion ksoh and million metric tons)

ProducUon as Percent of USSR

nite and

Drownard coal

SynUietlc Petroleum

Products Crude Oil



Chemical* Production. The Satellites produced3imes as much calcium carbide as the USSR, slightly more caustic soda, ond about the same amount of chlorine.3 output of syntheticwas about AG percent, refined benzol

ercent, and sulphuric acidercent Uiat of the USSR. During the period of thisUie principal change in thesewill be an increase of Satellite output of synthetic ammonia fromercent Uiat of the USSR.


Sulphuric Acid

SynUietlc AmmoniaCarbide

Satellite ProducUon as Percent of USSR






n contrast to Uie rapid growth ofSatellite agriculture has lagged seriously since the postwar phase of recovery. Although thc output of Industrial crops returned to the prewar levels8ver-all

agricultural producUon, owing to Uie lowof food crops and animal products, has not yet regained the prewar level ofOver-all agricultural output1 was an estimatedercent below the prewar level, but it slipped back3ercent below that level.

on in-

(lOM^loo) easant opposiUon to the programlljl 3 iks' forced colIecUvizatlon and compulsoryhas been the principal deterrent to

S increased agricultural producUon. Other io* toe loo jor factors contributing to the stagnation in

o in si iSS Satellite agriculture are the reduction in n 95 loo and quality of the agriculluraUabor force and

96 the low level o( investment in agriculture. Al-

- These esUmalea assume conUnuaUon of current Poland CxechoslO-

policies and average weatherand Hungary are endeavoring to over-

come their agricultural labor shortagesTotal agricultural collectivizationhUtlne labor from industry toto be the acknowledged long-term goal ofutflow of rurai labor,governments However, the SalelUte agricultural labor force for the Satellilcs asof East Germany, Czechoslovakia, androbably remain virtuallyin deference lo peasant opposiUon. throughsomewhatnpublicly committed themselves to allown the other hand, thewithdrawals from the "coopers- cultural labor force will probably increaseesult, Czechoslovakia and Hun- mgan esUmatcdillion

gary have lost ground In their collecUvizaUon to aboutillion. The revised plans pro-programs, Uie greater loss being sustained by vidc fQr significant additions of agricultural Hungary, where aboutercent of arable machinery, parUcularly for the machine trac-land was socialized' In3 as tor sUUons and state farms. Thc shift of cm-againslercent six months earlier, and pfia5ls to agriculture appears most likely to where there2 percent net loss in mem- conUnue in Hungary, which has announced bership in "cooperatives" during this period. that state agricultural InvestmentOn the other hand, no steps have been taken 5 willimes that of the preceding by Bulgaria, Poland, or Rumania to permit three-year period. Stale agricultural Invest-Uie peasants to withdraw. Poland, in fact. racntlncr Satellites range from with only aboutercent of its arable land 4 Qver lhe previous year In socialized (one of the smallest percentages RumanU and Czechoslovakia down6 among Uieas announced Uiat percent Increase ingricultural collectivization45 5 percent increase In Poland over the will continue at the same tempo as3 - two-year. Even these largeollccUvcs per year. Bul- percentage increases will leave total agricul-garia. which leads the Satelliles in percentage tural investmentow level and it willf arable land socialized, and Ru- mpossible lo raise producUon suf-mania (aboutercent of arable land social- ficicnUy to meet planned goals. Ized) have given no indication that they plan

to push forward with collectivizaUon foratellites will probably continueWe believe thai these latter states make only slow progress in applyingalong with Czechoslovakia (abouter- methods to Uie developmenl of Iheirol arable landast Oermany lure, and peasant opposiUon toercent of arable land socialised).of Satellite governments willHungarylikely In the immediate Discrimination againstthe Independentto concentrate on making the present ecs ln Iavortbe "coOperaUves" withfarms more efficient and also compulsory delivery quotas, and

uncertainly regarding future slate measures

* Including coo per* Urn and statecollcctivizalion of agriculture wiHwonUmie

toepressive effect on production. We believe that during the period of this estimate Satellite agricultural output will probably achieve only small advances (of the orderercent) over3 level, and that by the end6 lt will still be aboutercent below prewar. During the same period the total population of the Satellites will probably increaseercent (regaining8 level).

Foreign Trade

hc most important development inforeign trade has been its reorientation away from Western countries toward thc Bloc. Tlie trade of the Satellites with the Westfrom more than four-fifths of their total trade before the war to less than one-third1 During the same period. Satellite trade with the USSRfrom one one-hundredth to over one-third of the total trade. Czechoslovakia,and to an increasing extent Eastalso carry on an important trade with each other and with the other Satellites. Trade with China, althoughmallof total trade of any of thc Satellites, is Increasing. Altogether the intra-BlocChina) trade of the Satellites hasfrom about one-sixth of their total trade before the war to about two-thirds (See

he Soviet-styled programs of rapidIn thc Satellites, plus tighteconomic controls, haveecisive role In the postwar decline of Satellite trade with the West. Industrialization programs have greatly Increased requirements within thc Soviet Bloc for those industrial andraw materials whicharge part of Eastern Europe's traditional exports to thc West. At the same time Satellitepriorities have neglected thcsector whicharge part of these traditional exports. Moreover, the Satellites have exported large quantities of food and light industrial products to the USSR, thus aggravating shortages in theand further limiting availabilities for export lo thc West.

lie trade agreements and negotiations carried on by the Satellites withcountries in the latter part3 and the first tew months4 indicate that Lhc Satellites have beenrading policy similar to that followed by the USSR Three tendencies became evident in these(a) an effort to expand trade relations with non-Communist countries; (b) an effort to increase Imports of consumer goods Into thc Satellites; and (c) an effort to expand trade relations with areas which werenot important trading partners of thc Satellite trade with the West mayduring the period of this estimate. However, expansion of this trade will continue to be limited by the factors mentionedoreover, we believe it is unlikely that thc Soviet Union will permit tradethe Satellites and the non-Communist world to expand to such an extent as to alter the basic economic orientation of the Satellites toward the USSR or to weaken their economic dependence upon the USSR.

n summary, economic development of the Satellite areahole has followed much the same pattern as in theapid development of basic producers'eglect of agriculture andgoods Industries. Though thcprovide aboutercent of theof the Bloc (excluding Communistheir output parallels more than It complements that of the USSR. Sovieton Satellite supplies to meet its own requirements, while not quantitatively great, is of particular importance in certain fields,ranium ore. precision instruments,chemicals, selected items of machinery and transport equipment, and electrical On the other hand, given the current low level of Bloc trade with theworld, the Satellites are highly dependent on the USSRide range of supplies.


he scientific and technical capabilitiesGermany and Czechoslovakia, andlesser extent Hungary and Poland,substantial additions

it li T-

Uie main contribution of theto Uie Soviet nuclear program is Inores and concentrates. We estimate that East Germany is currently providing about half of Uloc producUon of The other Satellites are less important sources: the largest producer after East Germany is Czechoslovakia. Although Easi German uranium producUon has probably reached its peak, uranium from Uiat area will probably be sufficient toubstantial proportion of Soviet requirements during the period of Uils estimate. Elsewhere in Uienew uranium deposits are sUll being developed. The USSR, however, ts notupon Satellite sources. If necessary Uie Soviet atomic energy program couldbe supported at its present level offrom internal Soviet sources alone. Never ihelcss, Uie USSR will almost certainly wish to continue its rapid and large-scaleof Satellite ores In order to accumulate maximum reserves.


The Strategic Importance of tho Satellites to the USSR

oviet control of the Satellites has inmoved the Soviet military frontier into Central Europe. In view of the strategicof this region, the USSR has given priority to its development for military Thc USSR derives such strategicas advance air and ground bases, highly developed road, rail, and waterway communications,ubstanUal productive capacity which can be harnessed to the support of Soviet military operations. the USSR hasargebuffer in which toorward deployment of ils military forces and toan extensive air defense systemcapability for jamming, added to that of the USSR, woulderious threat to Western long-range radio communications In time of war. The Satellites also possess an extensive radar warning screen which is beinR continually expanded and improved. This net couldignificant additional flrTirgm


lime for warnings of air attack from the west against Uie USSB. The Satellites have also provided Uie USSR additional naval base and port faciliUcs.

Soviel Forces in the Satellites'

anecurity troops) stationedineare located ln East8 line divisions)In Austria. Hungary, Poland, andSoviet air units based In theand fn Uie Soviet zone of Austriatrength ofstimated strengthot fightersbombers. Soviet Naval Forces inare confined largely to Eastand are composed of small patrolvessels. We believe that Soviet forcesSatellites are not likely to increase inthc period of this esUmate,may improve their combat

Satellite Ground Forces"

Satellite ground forces havesubstantial element in Uie balance ofpower In Europe Their presentestimateden organizedline divisions, ofechanized. These forcesby Satellite securitytotalen. Theground forces, with thcUie East German, have probablythe desired peacetime strengthGermany was set back in itsprogram by Uieunewill probably increase thcPolice (Kasernlertefrom Its present strength of abouttoynthe Rumanian Army will show anduring this period from

For more detail on Soviet military disposiUons in lhe Satellites, see Appendix, Table 1. For detailed figures on ground forces In each country, see Appendix. Table -.

troops to. We estimate,that the Satellite ground forces will reach an over-all peacetime strengthen. organized into aboutine divisionsrmored andyo substantial Increase in strength is likely to occur thereafter. Wethat the Satellite security forces willat about their present level of strengUi.

The USSR controls these Satellite forces by direct Soviet staffing in Poland and by large Soviet military missions in all other countries. These missions vary fromfficers In the case of Albania ton Bulgaria. General officers possessingcombat and command experience have recently been appointed as Soviet military attaches in all the Satellites except EastSoviet control is being reinforced by the selectionolitically reliable officer corps, and by the use of Soviet methods,doctrine, organization, and equipment. Moreover, with Uie exception of East Germany and Albania, the Satellites are bound to the USSRystem of mutual assistance pacts.

The Satellite armies are equipped largely with Soviet World War II material of good quality, but they would require substantial amounts of additional supplies and equipment for sustained combat. They are dependent upon the USSR for tanks, self-propelled guns, heavy artillery, and some light artillery. Thc Satellites are now manufacturing for their use noncombat vehicles, light artillery, small arms, and ammunition. Czechoslovakia is the only Satellite now producing armoredvehicles, but its 'production is negligible (an estimatedanks of the4 typeelatively small proportion ol Satellite divisions is motorized and mech-anized and major deficiencies in motorheavy armor, artillery, andequipment will continue for Uie period of this estimate-

Although the Satellite armies have been reorganized to conform to the Soviet pattern, the various national units still exhibit marked differences in training, equipment, and^no-ralc. Their combat effectiveness is greatly


0T fi 'I'

to that of equivalent Soviet units. The combat effectiveness of these forces will improve, but wil! remain only fair. It Isthat many of the divisions would be suitable for offensive operations. Moreover, in case of war the Satellite forces would beupon the USSR for logistical support.

The questionable political reliability of the Satellite armiesignificant limitation upon their military usefulness. At present the Kremlin could probably not rely upon the majority of the Satellite armieseneral war except for employment Inroles orefensive capacity.against traditional enemiesoles and Czechs against Germans, or Bulgarians against Yugoslavs, Greeks, and Turks)armies would probably fight well, at least If victory appeared likely. Although Ught Communist control and continuedcoupled with intensive efforts to win the youth, will probably increase thereliability of the Satellite armed forces, we believe that their reliability will remain sufhcienUy uncertain for thc period of this estimate to limit their usefulness, particularly the forces of East Germany.

The Satellite ground forces do notingle coordinated organizaUon, There is no reliable evidence of the existence of combined staffs or commands among thc ground forces. No combined high-level maneuvers of Satellite or Soviet-Satellite forces have been conducted.rend toward coordinaUon isby Soviet efforts to standardizetactics, and training as well asand weapons in all the Satellite armed forces. In the event of general war, theforces would receive over-all direction from the Soviet high command, and might be placed directly under Soviet officers.

Satellite ground force reserves arcat moreen fully trained in the use of Soviet weapons and tacUcs. These men receive frequent refresher training and could be quickly mobilized in the event of war. fn addition, there are about three million men who served before or during World War II. These men would requirerefresher training before they could

be effectively integrated Into the new Soviet trained divisions.

Satellite Air Forces and Airfields*

The Satellite air forces now havetrengthireraftof all typesnd we estimate that byhey will probablytrength. ofill probably be jet fighters. Total personnel strength is estimated atiston fighters continue to be replaced by jet fighters (there were anet fighters In4 compared tod, and other equipment Is beingAn estimatedet light bombers of Uieype have been introduced into theAir Forcesart of the jetprogram. Other Satellite air forces have not yet received these bombers, but some will probably be suppliedew during the period of the estimate.

While substantial progress has been made in thc build-up of Satellite air strength, Uie current operaUonal capabiliUes of these forces are unevenly developed. Emphasis willbe placed on the strengthening of thc Satellite fighter and light bomberDuring the period of this estimate the Satellite air forces will probablyignificant increment to Soviet air power in Europe.

Intensive Soviet training of carefullySatellite pilots assures Soviet control and identity of doctrines, techniques, andSoviet policy appears to be directedthe attalnmenligh degree ofbetween the air force of eachand the Soviet Air Force, and theof the Satellite air forces into Uie Soviet air defense system. There has been little coordinaUon among the individualair forces. Wc estimate that this policy is likely to conUnue through

The over-all political reliability of Uie Satellite air forces, like that of the Satellite armies, is questionable. Since the Polish de-

* For strength figures in aircraft andountry, sec Appendix. Tabic 3.


of last year, thc USSR has strenglh-ened its conlrol over flying activities in all Satellite air forces. Concomitantly, there have been increased efforts to improveselections and political Indoctrination, Emphasis has also been placed upon the role of the air forces in tlie air defense of each Satellite, thus stressing the national interest of thc air effort. These measures willincrease the political reliability of the Satellite air units. Nevertheless, for theof this estimate the reliability of such forces will remain dubious enough to restrict their usefulness, especiallyeneral war situation.

3 virtually all combat typeand parts for their logistical support were furnished to thc Satellites by the USSR.3 Czechoslovakia, andesser degree Poland, Increased their producUon of aircrafl and engines, and together these countries accounted for aboutercent of total Bloc combat aircrafl production. We estimate that during the next two years Czech and Polish producUon will probably beto meet all Satellite normal peacetime requirements for jet lighters and ETOund-attack aircraft.

n extensive program of airfield Improve-ment and construction is being continued in all Uie Satellites. Principal emphasis has shifted from East Gennany to Poland, but other Satellites continue toigorous airfield construction effort. There areirfields available to Soviet forces In thc Satellites, includinginimumlengtheet,eet, andeet,otalirfields with the minimum capability of supporting sustained operations for MIG's ands. Runways now being built arc ateet long and manyr more. One airfield, now under construction in East Germany, has0 feel runway, an extra thickness of concrete, and large POL storage facilities. Many Satellite fields are being equipped with night lighting, radio navigation aids, radar, increased POLand improved structures This growing





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It is believed that aircraft and engine production estimates throughreew percent of being correct. Estimates of the number ol alrcralt produced ol each type are based principally upon lloor space, labor force, efficiency of Uie industry, date or first production, and on actual aircraft counts. There is some question as lo whether the current output ol fighters consists ol theith thcngine or (he MIG-tS HU with thcngine. It Is believed that those fightersbeing produced In Czechoslovakia are equipped withngines while those produced ln Poland, and earlier models in Chechoslovakia, are equipped withngines Estimates of future production are baaed on assumptions that the present scale of production efiort will not changeand Uiat newer aircraft types now being produced In the USSR will gradually replace older models in the Satellites after tlie SovieU begin production ol new types o( replacements for tneir present models. Estimates Of engine output are bused on requirements to keep pace with airframe output.



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flgurei on tht lUcngth* ot Satelllu armiei arc contKlered fairly reliable; the margin of probablt error it leu manercent informaUon on the Rumanianore limited than on the oinen. and rtrength fitsmatei lor that armya nightly lower reliability.

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each oalo vale: a

f.Eurei lor actual alrcralt itrengthi noted above aree lalrly reliable, particularly for the principal flaltllltes such as Poland, Czechoslovakia, and East Oermany; the evidence for the remaining countiiei li leuncludes Polish Naval Air Arm consisting ofstimated actual) ]et fighters andOfcE (to estimated actual) pliton light bombers 'Does not Includeingle engine trainer types carriedalled "night light bomber" unit* of tha Bulgarian Air Force

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LCU Auxiliary _




figures on the strength ot thc Hast German Sea Police, and on "the Polish Navy are consideredThe figures on the Rumanian. Bulgarian, and Albanian navies areesser order ofbut are believed to be generally accurate.

'Eight under operational control of border police.

'Overage or obsolete.

' Twenty-nine are ex-PT boats.

vessels are small district and harbor patrol craft, not strictly seagoing patrol veasels. NOTE: The figures in parentheses Indicate vessels under construction.


Original document.

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