THE IMPLICATIONS OF THE NEW SOVIET ECONOMIC POLICY
INTELLIGENCE AGENCY Office of Research and Reports
Summary and Conclusions.
I. Scope of the Revised Plans and Indicators of Their
of Implementation of the Nev
of Revised Plans with Original Plans,
of Revised Official Plans vith ORR
II. Soviet Economy,5 under thc New Plan .
A. Gross National Product by Economic Sectors under the
Other Economic Sectors
R. Gross National Product by Fconomic Sectors under the
C. Allocution of Gross National Product by End Uses
A. Feasibility of Production
of Fulfillment of Related Investment
Imposed by Raw Material, Manpower,
a. Agricultural Products
h. Consumer Nondurables
d. Consumer Services
B. Feasibility of the Revised Retail Distribution
to Which Foreign Trade Will Aid ln Fulfilling
the Revised Retail Distribution
Depletionource of Supply for
lay lc-men ting the Revised Retail Distribution
tohift in Distribution fron Non-
market to Market Channels Hay Implement the
Achievement of the Revised Retail Distribution
Appendix A. Indicators Suggesting Implementation of the Nev
Soviet Economic Policy 35
Appendix B. Indexes of Output of the Soviet Economy by Sectors
Appendix C. 3
1. Comparative Soviet Goals for Increases In Production and
Retail Distribution of Selected Commodities under OldOfficial 9
?. Soviet Croat; National Product by Sector or
3. Changes in Estimates of Percentage Increase in theSelected Economic, Occasioned bySoviet Economic Policy 18
%. Soviet GNP by End Uses under the Revised
5. Soviet CNP5 under Varying
Differences between Soviet Official Goals andfor Selected Consumer Goods
THE IMPLICATIOHS OF THE NEW SOVIET ECONOMIC POLICY
Summary and Conclusions
Thc Soviet economic policy announced by Malenkov in3 and amplified in the following month by numerous decrees and speeches purports toeversal of the long-6tanding policy of stressing industrial development to the neglect of improving the lot of the Soviet consumer, end it specifically modifies thegoals of Stalin's Fifth Five Year. Soviet leaders have alco implied that their peaceful intentions are evidenced by the very small increase in budgeted defense expenditures areful analysis of the announced policy goals and of measures subsequently taken to inaugurate thc program leads ORR to conclude that Soviet leaders genuinely intend to implement tbe program and that the growth of defense expenditures will bereduced in the-
Essentially the new programeveling off of militaryoderate rise in consumption,hange in composition of Investment, but little change in the trend of thc investment total. Under the recent revisions of the Fifth Five Year Plan the rate of growth of the economy for theears will be thc same og previously forecast under the original planthat is,ercent annually. The output of consumer goods willat an annual rate ofercent and that of producer goods at aboutercent.
Military production will riseate of the orderercent per year, an amount sufficient to re-cquip the existing armed forces with new types of military hardware. Thisignificant reduction from thc rate of growth of military production, which wasercent annually. The rates of increase under thc revision in the Plan are such that the share of consumption in the gross national product, will remain almost constant at aboutercent Instead of continuing its recent decline, which was projected by the original Fifth Five Year Plan. The share of investment in the total will rise somewliat, and that of defense will decline significantly. Although
the ncv programubstantial decrease in the rate of gTOvth of the military establishment, it probably does not Imply any considerable Gloving down in growth of Soviet industrial capacity to support war.
One Impact of the shift ln Soviet economic policy, according to ORR estimates, in that consumers willercent more real income5 than under the Fifth Five Tear Plan, Investmentwill be about tbe same amount, and defense expenditure vlll be aboutercent less. The rate of grovth of the groan national product will not be affected, except for transitional adjustments These adjustments occur principally in the fabricated metals industries, which vere required to change their output mix, and ln defense Industries, which markedly reduced their rate of growth There also hasapid temporary decline in the rate of new Investmentesult of theof the whole construction program.
Qualitatively the rise in the scale of living will be proportion-ately larger than the aggregate Increase would Indicate. The major emphasis in the food products sector Is upon the achievement of greater availabllltioB of quality dietary itemo such as meat, dairy products, vegetables, and canned goods. The emphasis ln textile production is similarly upon tbe higher quality items of apparel. The largest relative increases in output ere slated for consumer durables, which have been conspicuously absent from thc Soviet market basket.
Thc conclusions above ore baaed on ORR estimates, which do not accept some of the announced goals as feasible. The most difficult goals to fulfill in the new consumer goods program will be the agricultural goals. The expansion of agricultural output is tbe most important phone of the new program. To facilitate Its execution, the government has adopted far-reaching measures aimed at increasing Incentives through greatly Increased procurement prices, lower delivery quotas, reduction of tax rates, largerin equipment and fixed facilities, higher priorities for the output of machinery and chemical plants and for transportation aid construction services,edirection of skilled labor back to thc countryside. Despite these measures, shortages of mineral fertilizers, specialized equipment, end trained personnel probably will prevent full achievement of the agricultural production plane. The revised consumer nondurable gooda program is in port dependent
upon agricultural production and also probably vill not be completely fulfilled. It should, however, come close to fulfillment than tbe agricultural goals. The consumer durables and trade objectives will be least affected by limitations upon the agricultural sector.
The revised goals for retail trade are significantly larger than the goals for consumer goods production. The success of the retail trade program Is dependent on foreign trade, reduction of subsistence agriculture, and perhaps stockpile withdrawals, in addition to domestic production. Recent sharp Increases in Soviet purchases of consumer goods in the Free World suggest use of non-Soviet Bloc sources of supply to help fulfill the distribution program. Gold sales may be regarded as only one of several means the USSR may employ in increasing export volume to pay for expanding imports of both consumer and capital goods. Thc slic or the deficit betveen production and retail trade in perishable food items probably also indicates an intention to bringhift from direct home and farm consumption to distribution through retail marketing channels.
It seems clear that the increment to consumption will not come out of resources devoted to investment. The increase in connumer goods output is impossible without additional investment in consumer goods industries. The new programhunge in the composition of Investment (forransfer from heavy industrial equipment to light and medium industrial equipment) but does not Imply ain the aggregate magnitude of Investment.
Thc probable Increase in consumer welfare under the new policy is sucheduction in the rate of growth of military output and in acme lines of producer goods outputecessity If the revised program lo to be achieved. Continuation of thc consumer goods program an its contemplated scale Is premised on little change in3 level of military procurement. The present and immediately foreseeable International climate evidently must appear to the USSR not to require any extensive grovth in the size of the military establishment. Tne only additional defense outlays required vould be those necessary to provide new, technologically advanced equipmentefense force of relatively constant size. In addition to replacing obsolescentof the active military force, provision probably has been made to keep military inventories supplied with thc latest equipment. Inventory accretions of conventional weapons may well have been substantially curtailed.
Uoing US experienceuide, ORB analysts have concluded that the cost ofilitary forceiven sizeepresentative esaple of newly developed military hardware vouldmilitary procurement outlays by an annual rnteercent The rice in explicit budgetary defense allotments2nterestingly enough, also lies within this range. Calculation of defense expendituresesidual after consumption. Investment, and other government expendituresange of rate of growth of defense of tho same order of magnitude.
Thc scope of tbe available policy pronouncements, the volume and detail of the decrees, and numerous local and provincialenuine intention to carry out thc portion of the new program related to consumer goods. Whether or not goals now are being, and in the future will be, fulfilled cannot be conclusively determined at this time, but at least Soviet intentions to implement the revised plan are apparent.
The motives behind the policy changes ore mixed. Although tho regime probnbly is influenced by keen awareneoa of the benefits accruing, in terms of labor productivity, from its allocationarger share of available resources to consumers, its ability to raise consumer goods targets is postulatedasic decision not to increase substantially tho size of the defense establishment.
I. Scope of the Revised Plans and Indicators of Their Implementation.
A. Changed Policy Bnphu3ls.
Before the death of Stalin, basic postwar Soviet economic policy exhibited very pronounced trends- Inears after the6 toemphasis was placed on economic recovery andwith stress on the capital goods Industries. Defense claims upon the economy dropped back to the relative position held during thes. The Individual consumermaller share of the gross national product (CNP) than was available to hla In the immediate prewar years.
Just about the tine recovery uas substantially completed, international tension increased^ leading the USSR to accelerate greatly its defense program. Although some of the resource burden formilitary productioniversion of resources fromactivities, the consumer, alreadyightened situation relative to his prowar position, uaa obliged toelatively larger sacrifice. Analysis of the Fifth Five Yeariscloses Soviet intentions to continue to increase the defense share and reduce the consumption share of GRP. The share of investment vas to rise slightly. Similar conclusions were reached by ORB studies based upon information available at that time.
Six months after the death of Stalin the new regimeramatic and startling change in economic policy. In Halenkov'a now famous speechugust, herogram for improving the lot of the long-suffering Soviet consumer. The announced programevision of the Fifth Five Year Plan and reversed, as Halenkov pointedyear Soviet policy of giving first priority to the development of heavy tnduatry. This speech was followed ln the next few monthseries of speeches and decrees giving detailed form to the general program that Malenkov outlined. Thc emphasis and accompanying propaganda of these decrees left no doubt that the Soviet administration intended the world, including the Soviet people, to believeignificant reallocation of resources ln favor of coo-sumer goods was being inaugurated.
Prior to Malenkov'a speech before the Supreme Soviet In August, there were several Indicationshange In policy. These indicationsubstantial retail price cut ln April, coupled with the announcementpercent reduction of the State loan in June. These actions resultedubstantial Increase in consumer
purchasing power. ravda editorial ofune Indicated that therelanubstantial Increase In the production ofgoods over the production previously planned ThuB early indications existed demonstrating Soviet Intent to Increase the supply of goods simultaneously with the Increase in purchasingravda editorialuly illustrated something of thc magnitude of the previously Indicated revision in the consumer goodsn increased output of consumer goods amounting toubles in excess of the envisaged annual plan for consumer goods turnover." Tha later announcement of the first half-yearignificant Increase In the retail turnover and In the distribution of many commodities.
In this earlierhorough reorganisation in thestructure of the government was carried out which reduced the number of ministriesodd. to half that number. Theappeared to be directed mainly toward administrativeand Increased decentralization In management of tbo economy, as is evidenced by the transfer of some industrial control from Gossnab to the economic ministries. An organizational development related to tho imminent new policy was thc transfer of the wholesale and marketing offices of thc light and food industries and thc rubber footwear sales enterprlses of tbe chemical Industry to the Ministry of Trade. Essentially this step tends to allow tbearger voice in the. determination of tbe composition of consumer goods In mid-September, following the announcement of tho new policy, additional ministerial changes were Instituted which seemed more closely related to the new policy. Thesellowed for specialisation In the sectors scheduled for high priority under the new program by dividing the Ministry of Light and Food Industry into two ministries,inistry of State Farmsinistry of Procurement separate from tbe Ministry of Agriculture.
The timing of the announcement of the new policy along withonth delay In presentation of3 budget suggests that the new policy, while it may have been considered prior to Stalin's death, had not been developed in any detail. onths from Stalin's death to the meeting of the Supreme Soviet apparently was required by the new regime to work out thc voluminous detail and ramifLcations of the new program.
B. Indications Of Implementation of the Kew Policy.
The contrast of the new program with the long-continuedSoviet economic policy of "heavy industry first" was so dramatic that Its announcement vas at first greeted by many observers with legitimate skepticism and caution. By now, however, theof evidence appears to leave little doubt that the Soviet leadership Is genuinely determined to carry out the new policy. ummary of this evidence follows.
One of the most Impressive indications of Soviet intent lc the volume and detail of the speeches end decrees followingriginal announcement of the policy. These decrees have givendetail regarding goals, operational procedures, organizational changes, price adjustments, employment shiftB, and plans forof output. The economic sectors, covered by the various speeches and decrees, included agriculture, food processing, other consumer goods (both durable andetail trade, and,esser extent, foreign trade. The only major area where no announcement has been forthcoming aa yet Is housing, where drastic improvement is urgently needed.
Additional evidence of Soviet Intent to Implement the new plan is' shownomparative analysis of Soviet press and radioreporting on successes and problems in the consumer goodsespecially food processing. Beginning in the summer, the number of euch news items relating to these industries was impressively larger than the number of items ln the corresponding period
One implication of an extensive reallocation of resources is the appearance of decline in some types of investment, which In turn tends to make possible an Increase ln Investment ln other fields. The curtailment of activity and partial abandonment of the Main Turkmen Canal, one of the prized "great socialist constructiono one of ceverol indications ofransfer of resources.
In addition to the evidence citedonsiderableof specific Items in some of the Soviet press and radiogive further details concerning implementation of the new policy at the local or enterprise levelist of these news Items, see Especially Impressive are the measures apparently being carried out in agriculture to Improve the quality of personnel and all phases of production and marketing.
Time has notomprehensive compilation of all the indications noted In the press. The appended list, however, Is considered to be indicative and supports the view that Implementation of the new consumer goods policy is progressing vigorously throughout thc USSR. The ORR conclusion is that the Soviet leadership Is genuinely dedicated to the fulfillment of the new program. The intelligence problems that remain are to measure the magnitude of tbe new policy and the feasibility of carrying it out, as well as its jffect on the rest of the economy. These questions arein the following sections of this
C. Ccci pari son of Revised Plans with Original.
Although there ore extensive details furnished in official statements on plan revisions, comparison with tbe original plans is made difficult by the paucity of comparable data provided In the original Five Year Plan. The revisions are concerned only with con-Gumcr goods. Thus conclusions as to the changed behavior of the rest of the economy must be based on sources other than official releases. The seme qualification applies to those consumer goods, such as cereal products, for which no new goals have been advanced. For some products, only comparative targets for retail trade have been icsucd. Here, deductions concerning changes in production must take into account evidence of foreign trade patterns end Judgments of changes in retail traderoportion of total distribution.
Despite the extensive publicity given to specific consumer goods production goals,ew comparative statistics have been made avullable. They have been assembled in Comparisons also are listed for available retail distribution targets.
No official statement hu6 been mado In regard to revisions of the aggregate goal for consumer goods production other than Malenkov's declaration thatpercent increase contemplated in the Fifth Five Year Plan would be fulfilled considerablyrobably by the endlse In production of foodstuffe under thc revised plan will beercent, while under the old plan the Increase woe set atercent, on upward revision ofercent over original goals. Within the foodstuff category less thanpercent average lncreaee ln production forcar period has been planned for meat, fish, butter, sugar, and beer.
ollows on D. 9.
Comparative Soviet Coals for Increases in Production and Retail Distribution of Selected Commodities under Old and Revised Official
Fruits and Vegetables
and TV Sets
Thc average rate of increase has been planned for vegetable oil. Greater-than-average production increase has been planned only for canned fruits and vegetables among the enumerated items. The only important items excluded from specific mention ore grain. Since the whole stress of the new food program is on quality items, it seems likely that the grain product target has not been raised. Omitted products in which large upward revisions may have been planned Include milk, cheese, and confectionery products. Their total weight ln the food Index, however, is small. Therefore, the increase in the new production goal for foodstuffs is inexplicably higher than the weighted total for enumerated component products.
Upward revisions in the retail distribution goals for many products ore much larger than the increase in their respectiveindexes. These and similar discrepancies will be analyzed ln Section III, B, below.
The increase in the textile targets is not large. eighting of the cotton and woolen production indexesevision of about Ik percent. Comparative retail distribution goalsimilar result. The leather footwear increase is somewhat lower.
Ho comparative production aims have been delineated fordurables. The explicit retail distribution indexes, however, disclose changes in intentions of larger relative magnitude than for food or textiles. For thla group of items there should be little discrepancy between growth of production and retail distribution, except aa explained by imports.
0. Ccaparison of Revised Official Plans with ORR
ORR estimates that Soviet production capabilities arebelow official goals for food products, are loweresser extent for textiles, and tend to be in close agreement on consumer durables. Whereas the new planned Increase In the output of food forear period is set atercent, theroduction increase of only ko percent. Thc largest divergence between planned goals end ORR productionis in meat, fish, dairy products, sugar, and vegetoble oils. The degree of difference ranges from l8 percent for butter toercent for meat products. Soviet growth estimates for production of thc highly processed food items, such as canned fruits and
vegetables, confectionery products, end alcoholic beverages, ore generally accepted by ORR. On the two enumerated textile Items, cotton and woolen cloth, ORR accepts the official cotton cloth index of growth and sets an increase for woolen clothess than the announced Soviet goal. The ORR growth estimate for leather footwear Isercent below the Soviet goal. It is not possible to moke cacparlsons on consumer durables, as no official Indexes have been published. ORR analysts have beenhowever, to accept the official physical output targets5
IX. Soviet Economy5 under the New Plan.
A. Gross National Product by Economic Sectors under the Mew Plan.
During the8oviet GNP increased at an average annual rate of overercent. 0 the increase stillercent. 3 the increment to GNP fell off sharply to lessercent. 45 the growth rate Is expected to Increase again to an average annual rate ofercent.
1. Industrial Output.
The rate of growth of GNP may be best approachedetailed examination of the economic sectors which coaprise the GNP index. Industrial output, which had risen5 percentncreased byercent3 and is expected to advance byercent per yearU5 (see* The decline in the rate of expansion of industrial output has been most evident in the defense, food processing, and fabricated metals sectors. Defense outlays exercise an important influence on theof Industrial growthhole, the decline In the growth rate being less than half as large if military production is excluded. It is assumed that the rate of Increase in military production will be the same45 asercent. This assumption is based on the belief that military requirements in the period will not occasion extensive grovth of military output. Bather, the military situation vill entail only an annual increment in value of output necessitated byiven defensewith improved, more complex equipment. The estimated annualis based upon the rise in explicit budgetary outlays for defense2' This estimated increaseercent is the same as ORR's estimate of thc annual increase in cost due tocomplexity of military equipment and hence allows for the
* ollows on* Thc constant size of the defense establishment permits one to assume that personnel and maintenance costs arc constant. Ifand development outlays arc included in the final cost of finished equipment, the change In the defense appropriation isentirely in the military procurement component.
ill mm*i 4
continual re-equipment of the Soviet military forces vith the latest types of military equipment. Any marked deterioration in Soviet foreign relations would compel reconsideration of the militaryestimate.
A further check on the estlnated grovth in defenseis provided by considering defense as the residual ccmrponent in GNP remaining after estimated trends ln investment and consumption have been conoldcrcd. Since It is estimated that the rise in CNP5 will rangeercent per year, the margin left'for expansion of defense ranges from zeroercent annually.
Pood proc.essi.ig and certain fabricated metals sectors constitute the other areas in vhlch thereignificant reduction ln the rate of grovth The slackening in thc expansion of the processed food Industry resulted from the poor grain harvesteduction in the- slaughter of livestock. This reduction isby adverse weather conditions and may be assumed to beby average weather conditions. Under the new agricultural program, livestock deliveries and meat output will exceed2 level. Together with expansion of food production ln other areas on both an extensive and an Intensive basis, the new program should enable the processed food industry to increase the value of Itsbyear.
The partially arrested expansion In fabricated netals
production3eflection or the readjustmentew economic policy. The energy, chemicals, and metals industries are unaffected by the switch in policy emphasis, but the fabricated metals industry has to change thc composition of Its production. No decline in total output of thc Industry is implied. There will probably be,emporary slowdown in its growth. After adjustments to the revised plan have been completed, the expansion In output of the fabricated metals sub see torC5 will be equal to the rate obtained0 Tho adjustment is particularly snrked in the automotiveIndustry. Theto change the structure of traetor output explains the3 increase and the return to2 pcreeMsec increment in production'"
Tho rate of expansion of energy production is fairlyover tbe whole period0xceptubstantial Increaselectric power generationb5 as hydroelectric
projects coco to completion. The behavior of the growth pattern ID nonferrous metallurgy Is irregular, but It appears to beay correlated with broader economic policy changes. The growth picture in ferrous metallurgy is steady. The chemicals andmaterials Indexes do not appear to vary In accordance with the basic policy shifts. Forest products output still move! along ot its slow, regular pace.
Greatly accelerated rates of increase In output will be forthcoming45 in the branches of fabricated metals production which furnish equipment for consumer goods productionagricultural machinery, food-processing machinery, textile machinery woodworking machinery, and refrigeration machinery. Since these branches comprisemall fraction of the total fabricated metals output, their production can be greatly enlarged withoutignificant reduction in'the expansion of other branches of metals fabrication. In fact, there will be an acceleration of total machinery output sufficient to cover the output of the newly
emphasized branches and to maintain production growth rotes elsewhere.
The rate of increase will rise from lessercent3 to
Manufactured consumer goods production will increaseercent3 as compared with an increase ofercent The factor chiefly responsible for thc reduction In the rate of growth of this area was the lack of expansion of leather footwear output. As the results of the policy shift become evident In this sector, the rate4 will slightly exceed that anufactured consumer goods output is expected to increaseercent.
2. Agricultural Output.
The agricultural production index23 has been strongly affected by cyclical weather factors. Abnormally ravorable weather2 ledercent Increase in output as compared with an average annual increaseercent for theyears. Meteorologically speaking,3oorer than average year, and farm output declined byercent. TheJ.5 vill averageercent per year, average weather conditions being assumed. Total output5 vill be only slightly higher than in The food crop and livestock increment index closely parallels that for agriculturehole
Thc growth possibilities for Industrial crops are brighter. Since relative increases in output5 are expected to be at least twice as high for consumer goods processed from basicmaterials as for the farm crops themselves, it Is apparent that other factors, such as improved distribution, foreign supply sources, and more complicated processing, will be operative if the planned goals are to be realized. Discussion of these other variables will be found In Section III, B, below.
3. Other Economic Sectors.
The behavior of the construction index reflects the change in baoic economic policy. 12 the value of construction had increased byercent andercent, respectively.eneral economic policy changeseshuffling of the Investment program,essation of spectacular river-control projects and Increased allocations of productive factors to consumer goods Industries and agriculture. onsequence of these shifts, total construction3 rose onlyercent. Regularizatlon of construction activity5 probably will result in expansion at an annual rate of atercent. This Increase will be sufficient to securepercent growth inannounced in the original Fifth Five Year Plan. ORBIndicate no change in the total volume of Investments In the revised" plan.
Thc trade sector willomewhat more rapid expansion of activity*5 than in the three previous years Such an Increase will derive botharger output of consumer goods and from the redirection of distribution from nonmarket to market channels. An far as CU be foreseen, tho basic policy shift will not affect the pattern of growth in the transportation, comnwnlcations, and services sectors. It would have seemed consistent for the regime to have announced additional expansion of service elements ofparticularly housing. No such announcements had been made, however, at the time of this writing.
B. Gross National Product by Economic Sectors under the Original Plan.
Compared with the most recent published estimate on Soviet economic aggregates,here haaeductionercentercent ln the anticipated average annual growth in Soviet
3 The growth forecaat for the entire, however, vats almost identical. The old estimate did not anticipate the bountiful harvest2 and thusthe growth for that year. This understatement was offset by overstatement of3 growth- The old forecaat did not foresee the lcvellng-off of defense outlays and the short-runresulting from the current policy change.
Using theasis of comparison, important differences in the rate of growth of GNP components are evident from Table-3- The growth of Industrial productionhole is about the same In both estimates. esult of revision of Soviet economic policy, expansion of producer goods output (excluding militaryis expected to be somewhat lower, and consumer goods output is
Changes In Estimates of Percentage Increase in The Production of Selected Economicccasioned by the Revised Soviet Economic Policy
EconomicEstimate Old Estimate
expected to be significantly higher, than under the old program. The grovth of defense production will be reduced to less than AO percent of the former rate of increase.
There are also substantial increases in production forecast for certain vachlnery sectors vhleh equip industries engaged in the production of consumer goods. Differences ln estimates for grovth of the transportation, communications, agriculture, construction,ervices sectors are minor. The same condition obtains ln the energy and metals sectors of industry. Comparison of the two sets of estimates (see Tableears out the general thesis that the only substantial relative reduction in production emphasis that hashas boen ln military output.
C. Allocation of Gross National Product by End Uses.
The military establishment of the USSR hod been receiving on ever-Increasing portion of Soviet GNP over the09 (see Table Increased military expenditures wereecline in the rote of growth throughout the rest of thc Soviet economy. Consumption expenditures which hod been sharplyfrom pre-Horld War II levelsajor share of the burden of increased military outlays. Over thc0uring'which Soviet GNP increased aboutercent and Sovietoutlaysercent, Soviet investment expenditures increasedercent and Soviet consumption expenditures increased by onlyercent.
The most prominent change In the allocation of GNP35 will occur ln the share accruing to the military establishment. There willmall relative gain by consumptionarger gain by Investment. Apparently, Increased welfare for the consumer will not entail any significant sacrifice in the rate of economic growth except during the transitional Rather, both consumer and investment objectives will benefitlackened rate of increase in the armament program. Consumers will receive 1M. percent more5 thannd investment willetter endowed. Defense outlays vlll be increased only 5during the same period. GNP.will increase aboutercent.
Soviet GNP by End Uses under the Revised Estimate
The magnitude of the revised Soviet economic policy may be drawn in sharper relief if the present consumption targets arewith consumption targets based upon the original Fifth Five Year Plan and ORR estimates of the likely achievement of targetsthe original plan (sec* Estimates based upon the original Fifth Five Year Planontinuous decline in the share of consumption expendituret which timeexpenditure would beercent of GNP.
Proportions developed from official plan data fully supported this contention. In absolute terms, consumers will be better off byillion rubles5 than would have been the case under the old
Soviet GNP5 under VaryingPercentages of GNP
. Estimate i'
estimate. In relative terms, consumer welfare will have gainedercent. This more favorable situation for the Soviet consumer will occurecline ofillion rubles in total GNP from the original plan to the revised plan.
The investment allocation is virtually unchanged from the estimate based upon the original Fifth Five Year Plan. The defense share has been radically lowered from the old estimate. It isillion rubles, orercent, lass. The reduction from theplan goal Is even larger.
ir it were possible to fulfill ell of thc consumer goods gcals In the now program, thc relative gain of consumption would be larger. The investment share would decline relatively4nd the drop in the percentage of resources devoted to defense would decline even more sharply than in the present Consumers would receiveercent more5 thanGrowth of thc other end uses is assumed to be unchanged from the new ORR estimate, but total GNP would rise byercent.
Note on Methodology
Thc basis for constructing estimates of GNP by end uses was an unpublished paper1 Soviet GNP. 4/ Thc breakdown computed by the author was considered Insufficient) as no adjustment fortax was made among the components. The distribution of the turnover was basedrevious RAND reportodified byof an intuitive nature to correct for subsequent policy changes. Once1 distribution was established, thc percentage breakdowns were converted to ruble terms. 1 values were then moved by relevant sector indexes. Consumption was moved by the consumer goods index, investment by the nondefense components of the producer goods index, defense by the defense industry index, and administration by tbe services index. This method is subject to important qualifications which vlll be considered in future studies on Soviet economic aggregates, but it serves wellirst approximation.
A. Feasibility of Production Plans.
1. Feasibility of Fulfillment of Belated Investment Plans.
Official Soviet pronouncements in recent months havefigures on investment allocations to the principal activities benefiting from the new policy. The impact of the shift ln Investment allocations ond the probability of realizing the larger allotments can be measured by comparing total planned allocations to the affected activities under the new policy with total Investment in the economy Oiid by comparing the Increase in investment requirements for the newly favored activities with tbe Increase in total Investment availabilities.
It is difficult to obtain precise data on investment allocations by economic branches end sectors, especially for agriculture. The figures inased on plans or ORR estimates, are not exact, as they represent approximate orders of magnitude upon which to base conclusions. The rate of increase in investment announced by the RusBions for the first half3 over the corresponding period2 wasercent, as comparedise ofercent2 end more for previous years. This fact, coupled with the probability of the suspension of large spectacular projects, such as the Main Turkmen Canal, makes it appear likelyeadjustment of investment priorities was in process. Soviet claims that total investment could be accelerated to such an extent in tho last half3rowthoercent for the year could be obtained appear extravagant. The statements, however, doelief that thc new Investment pattern was sufficiently crystallized to allow Investment to proceed more smoothly than in theonths of the year.
During the first half3 there appeared to be no shift of Investment resources to agriculture or the consumer goods industries, since the increase in Investments in thc light and food industries was lees than2 percentage increase. Inherefore, the new policy hod the effect of reducing the total availability offunds rather than changing their composition.
i ollows on p. 2k.
Soviet Gronu Investment In Total and by Selected* as Indicated by Official Announcements
Supplements to Localby,/
Agriculture (Budgetary Allotments) h/
Collective Farm Investments
' 0 %]
gives total Investmentsigure is known, and? Index is known to/
of official Indexes of investment in thefood industries5 base yields,2 figures,3 prices by deflator. Subtraction ofgoods industry investment leaves food Industryresidua).
based on lesser responsibility of trade ministry.
g. Represents Investments by producer and consumer cooperatives. Their employment total is one-half that of manufactured consumer goods, food, and trade ministries. Capital per worker Is assumed to be one-third of that In these State ministries; so Investments are assumed to be one-sixth of letter.
h- Based on extrapolation of official Index; aoved by budget figure, or tuning Investment to constituteercent of total
Soviet Gross Investment in Total and by Selected. as Indicated by Official Announcements (Continued)
4 figure based on Khrushchev estimate.
i. Extrapolation of previous index, adjusted by behavior of State
investments ln agriculture.
k. EstimateST analysts. 1. Based on official Index.
m. Based on official increase orpercent in first half of year and assumedear grovth rate ofercent in last half, n. Based onear period grovth rale ofercent.
In the last half3 there appears to havemall transfer of lnvesteent resources to the nevly favored activities, even though it Is. assumed that total lnvesteent has risen by theear average ofercent. The transfer docs not seem to be of such magnitude that it vould Impinge upon the total available Investment outlay. Requirements of the nevly stressed activities have risen byillion rubless shown in Tablend total investments have risen byillion rubles, which allowsercent Increase in investment in other sectors. Since the average for these other sectors was lessercent ln the first halfho rise in the latter part of the year will beercent.
he pressure of agriculture and consumer industries on general investment requirements appears to be somewhat less stringent. Out of an estimated Increase ln total investmentubles, requirements of agriculture and consumer goods Industries will increase byillion rubles. Remaining new investmentvould allowercent increase in allotments to other activities.
5 the proportion of investment outlays available for other economic activities should rise. The6 goal In production of agricultural products and conaurocr goods indicatesmodest increases5 and therefore would not require any significant rise in investment arger proportion of new resources could be allotted to other sectors.
7. Constraintb Imposed by Haw Material, Manpower, and Equipment Limitations.
ORR does not believe that all of the consumer goods goals are feasible, for the reasons outlined below. Differences between official goals and ORR estimates for selected consumer goods aggregates are given ln Table 7.
Differences between Soviet Official Goals and ORR Estimates for Selected Consumer Goods Aggregates
resource limitations on the ability of the Soviet economy to fulfill the consumer goods program can be roughly divided into nan power,nd equipment limitations. The goalscan be conveniently classified by agricultural products,nondurables (processed food and textileonsumer durables, and consumer services. The effect of production limitations for each broad type of goal in turn ore considered belov.
a. Agricultural Products.
Revised agricultural production goals seem least likely of achievement. All three types of limitations cited above will be operative in limiting achievement of planned agricultural production goals, materials being the most serious limitation. Since Soviet agricultural expansion must henceforth be largely Intensive In nature, the availability of mineral fertilizer is essential to completion of the proposed program. The official increase anticipated for theof mineral fertiliser is not deemed sufficient*5 to enable agricultural output to expend to the desired level. ORR
estimates of agricultural production5 areercent belov official Soviet goals.
Equipment shortagesess certain factor. Ihc announced goals for rov-crop tractor and agricultural machinery production Indicate peak production rates occurring5 Whether or not the3* rates of output will limit crop outputs conjectural.
The manpower limitation in agricultural production has-two basic aspects. One concerns the Incentives provided to kolkhoz numbers, and the other concerns the training of skilledto can the large increased machinery park. Since ORR assumes that the manufactured consumer goods program will be substantially fulfilled, the Increased availability of consumer nondurables and durables to the rural population will be substantial. Together with Increased monetary incomes, the incentive effects of the program should be important. anpower limitation may be apparent in the provision of trained and experienced MTS personnel. Training periods requireonthsear, and at leastears are needed to give the operators adequate field experience. The end result of this training requirement is toag in the attainment of maximum utility of power machinery that may retard desired crop
b. Consumer Nondurables.
Consumer nondurables utilize agricultural products as basic Inputs in their productive processes. To the extent that agricultural goals are Incapable of fulfillment, consumer nondurable goals may not be realized, assuming no withdrawals from stockpiles, no expansion of imports, and no reduction In exports. Items most likely to be affected by this type of limitation are woolen cloth and clothing, linen cloth end sewn products, meat products, and dairy
There is little indication that lack of industrial equipment will seriously affect production of textile and food products. Thc output of both textile and food-processing machinery is expected to rise enough in3 and* to insure that they will not be the restraining inputs on production. There should be adequate manpower forthcoming for these newly favored industries. Relative wage rates
have recently been raised in the two branches. Female workers will probably provide most of the new labor force requirement.
c. Consumer Durables.
bedurable goals are those most likely to
oe attained. The basic materials consist of metallurgical fabricated electrical equipment inputs. The resource proTleTls ingtnemetal
and mn!t BOChlnory industries from heavy industrial
and military enterprises to manufacturers of consumer goods The
JST*Planned rise in consumer durable
ri"^and defense industries.
fined to the last half of the year, thc diversion from otheramount to only about k
The increase in consumer durables productionuble,I will amount to lessercent of the total value of output in defense industry and fabricated metals. In low the increment ofillion rubles in consumer durables production will comprise lessercent of total value of output in the aforementioned industries.
M , . , quipment limitation is subject to theby Since plants producing consumer
durables would compete for capital equipment with those producing maenmed products and armaments, the limitation on the production of
oviot willingness to divertticketed for heavy industry and armaments. On thisdoes not appear toestrictive
The same conclusion advanced in regard to thcin consumer nondurables is applicable to the category For the most part, these products would be producedwhich have long enjoyed high relative wage ratesev entrants Into the industrial
* This estimate is based on an official Btatcment concerning retail sales of consumer durables and on ORlt estimates of the percentage of total output comprised by consumer durables.
The proposed expansion of State and cooperative trade needs to be examined in the light of thc equipment and manpower limitations. The "materials" of trade are consumer goods produced by other ministries; so their adequacy will depend on the output achievemcntp of the manufacturing ministries.
The equipment requirements of trade consist mainly of buildings, refrigeration machinery, store equipment, and transport equipaent. Directives giving the needs of the Mlnlotry of Internal and Foreignigher priority on construction materials and automotive equipmentoncerted interest to fulfill these requirements. There Is no inclination on the port of ORR analysts to challenge the refrigeration machinery goals.
As for manpower, there should be no limitation exercised. The additional labor force required is relatively snail. The Ministry of Internal and Foreign Trade hasomprehensive training program for both new and present sales personnel.
B. Feasibility of the Revipcd Retail Distribution Plan.
. The feasibility of the revised retail distribution plan5 (seesunction of four variables, as
Production levels for specific commodities outlined in the distribution plan.
Foreign trade (importa) in specific commodities outlined ln thc distribution plan.
3- Stockpiling status of specific commodities outlined in the
I*. Marketing channels employed for specific commodities outlined In the distribution plan.
Inasmuch as the Increase lr. BftTltt prnflnmtluntipulated ln the revised Fifth Five Year Plan are in almost every cose less than the indicated increase in retail turnover, each of thc variables outlined aboveole of some significance in assessing the probability of
Soviet achievement of the planned retail turnover. Imports, reduction of stockpiles, and revision of marketing channels of the commodities indicated Inay Individually or In some combination close the gap between Soviet and ORB production estimates and Soviet retailestimates. iscussion of the feasibility of production levels for specific commodities outlined in the distribution planontained in III, A,bove, and is the point of departure for the discussion of the remaining variables outlined above.
The USSR probably can achieve the stipulated program of expansion of retail turnover if its gambit (sec III, B,elov) of changeystem of incentives and rewards as opposedyutnm of threats and punishments is successful. If the individual Soviet citizen responds to the gambit In the fashion that Soviet planners anticipate, the program will succeed. If the Soviet citizen fails to respond in the manner In which the planners anticipate, the series of enticing'moves outlined in III,ndelow, may provide the added Incentive, hat, more likely, should the Initial response be negative, the program may well collapse. It is believed that, while the Soviet authorities have dedicated substantial effort to the realization of the revised plan, failure of the plan would not significantly Jeopardize the position of the Soviet economy end fulfillment of the plan might well considerably enhance the position of the Soviet economy at least through theo. This estimate Is based uponorkable system of incentives to Soviet working people might push backewather rapid decline in labor productivity.
1. Extent to Which Foreign Trade Will Aid in Fulfilling the Revised Retail Distribution Plan.
Several recent changes in the structure of Soviet foroign trade indicate thot the USSR intends toortion of the planned increase ln retail distribution from imports of specific commodities for which increases ln trade turnover have been planned. Tho USSR hasew trade agreement with Denmark, Increasing Soviet imports of butter and meat. The USSR has alsoew trade agreement with Argentina which will make available to the Russians substantial quantities of wool, cheese, lord, and meat. harp Increase ln Soviet sales of precious metals sinceeems to have been directed at redressing adverse Soviet balances of hard currencies, especially sterling, that have been built up over several months. Gold sales ore not believed to be the resultirect Increase ln the
current purchases of consumer goods. The USSR has negotiated agreements with both Iceland and the Netherlands calling for Imports of specialty fish items, end In July orders were placed with the Netherlands for Ijaaedlate deliveryeters of woolen goodseters of rayon goods. Additional Increases in textile purchases from France were negotiated The foregoing measures Indicate athort-run effort to iaplement the revised retail distribution of consumer goods by foreign trade activity. It Is Impossible from the data currently available to draw tho conclusion that the USSR will continue to expand imports of consumer goods over the period of the revised plan. However, Soviet ability to Implement thc plan by foreign trade and an Inference of Soviet intent to implement the plan by foreign trade seem to be indicated by the above actions.
The commodity composition of USSR-Soviet Bloc traderobably will be much the same as that which obtained. It may be noted that3 trade pattern between the USSR end European Satellites was gravely distorted by the poor harvest in the latter area. The general increase in attention to production of consumer goods over the Bloc may result in some minor increases In the role of consumer goods in the intro-Bloc trade. It is unlikely that the USSR will be able to increase its Imports of the critical items on its consumer goods list from Communist China or the Satellites. China may be able to Increase its exports of edible oils and fruitsmall amount, but if China were able to trade with the Vest, the amount of edible oil available to tbe USSR might well be reduced below present levels. It is also unlikely that the USSR will be able to increaseof critical consumer goods items from the European Satellites, which are simultaneously (with the USSR) engaged in attempting tothe production and availability of the identical consumer goods.
The USSRonsiderable volume of food (primarily cereals and cereal preparations) to secure foreign exchange to finance required Imports. The absence of revision of cereal and cereal product output and distribution goals tends to indicate that the present and planned production and distribution for cereals is ofagnitude as to allow the USSR to continue to export substantial quantities of these items without Interference with the revised Fifth Five Year Plan.
The distribution plana for fish, fats and oils, and textiles are largely dependent on foreign trade for their ultimate achievement.art of the planned Increase in meat turnover must be achieved by increased imports, although the major portion of the planned
increaoe in meat viLL derive from expected changes In marketing channels. It is not feasible to try to estimate the physical magnitude of imports of thc above-Indicated items snd thus to tie import availabilities directly to domestic availabilities of specific consumer goods items. Tvo limitations dictate this situation. First, trade data arc couched in almost all cbscb in monetary terms; thus precise estimates of physical quantities made available cannot befrom trade data. Second, the future pattern of foreign trade is an unknown quantity. Itelieved that should tbe USSR be willing to continue to revise import trade in the direction of Increased availability of fish, meat, fats and oils, and textiles end textile fibers that the portion of the revised distribution plan to be supplied from foreign trade could be achieved without significantof the internal Soviet economy.
A rapid increase in Soviet sales of gold and other precious metals has taken place since it should be noted that, despite this increase, Soviet sales of these metals for theonths3 arc running at an annual rate of aboutercent of1 rate, when little notice vas taken of Soviet gold shipments and when theprice of gold was not believed to be unduly depressed. Should the monthly rate of Soviet sales of gold since September be maintained, it would be necessary to reassess the role of gold in Soviet foreign trade. The substantial gold exports of recent months appear to be aimed at a* redress of adverse Soviet balancee of hard currencies, most of which adverse balances had been apparent before implementation of the revised plan had been initiated. Although the restoration of balance in the hard currency area may be on indication of Soviet desire or intent to increase imports of consumer goods from this area In the future, it may not be construed tooviet decision to finance imports of consumer goods from goldstocks.
The USSRarge highly diverse economy upon which it may draw for coimoditiee to enhance its export trade. Gold ia only one of the commodities that may be drown. The sharp decline in the price of gold that has occurred in the past few months would certainly make future use of gold forore questionable alternative than it has been in the past. There exists at present insufficient knowledge of Soviet gold and other preciouB metal stocks toontention that the GSSR couldubstantial expansion of import trade financed in large port by such metals.
2- Stockpiling Depletionource of Supply forRevised Retail Distribution
The Soviet stockpiling program, like its entire economy, has in the past been directed at assuring the maintenance and growth of production and the defense of the country. For this reason, the USSR has accumulated large reserves of only those consumption items needed to achieve these goals. Primary among these is grain, but meat, sugar, and other foods are also Included. Stockpiles of such quality foods as milk, vegetables, and butter are not believed to be large, while most manufactured consumer goods have not been stockpiled at all. For this reason, even though the present situation is the type of contingency In which Soviet doctrine calls for the release of stockpiles, these reserves are not likely to provide more than temporary and limited contributions to the revised retail turnover plan. Their chief use may lie in providing increased supplies in particular localities at particular times when performance threatens to be conspicuously below promises. Crain stockpiles also can be used to provide increased exports.
No information has been received to suggest any revision in the original Fifth Five Year Plan goaloubling of state food and material reserves. Any plans to reduce stockpile accretions for the sake of the increased retail turnover plans wouldeversal of Soviet stockpiling policy, which regards the accumulation of reservesirst step in the solutionistribution problem.
Market Channels May ;
the Achievement of the
seems apparent from the dirrerence between revisedand distribution targets in Tablehat Soviet planners intend to makeajor share of this discrepancy by attracting production from subsistence consumption to traditional, market channels. Should the planners be able toignificant diversion of the output of meat, butter, edible oils, dairy products, ond fruits and vegetables from nonmarket to market channels, the battle of increased retailwould be substantially won. The Soviet agricultural population currentlyignificant portion of the production of the above commodities on the fans, and come production unquestionably is
diverted to Illicit trade channels. The commodities thus consumed do not become incorporated into retail turnover figures.
Two main attacks have been launched toonsiderable portion of the nonmarket distribution into tbe organized market place. First, the Ministry of Agriculture has substantially increased the real price which the farmer received for his meat, dairy, and vegetable products in organized state Thus the farmer will be able to increase his money income significantly by increasing production, and he will not be penalized pricewise for what he sells to the State. Furthermore, the industrial worker in the city will be encouraged to increase output to buy the increased supply of food which will be available. oncerted effort is to be made toarger portion of the increased production of manufactured consumer goods to stores in rural areas than hitherto has been thehus the farmer will be able to use his newly Increased money to purchase consumption goods which have previously been unavailable. If this circuitous system of incentives and rewards instead of threats and punishment were successfully implemented, the USSR would likely achieve the indicated production and distribution goals.
lo general, the intense initial effort made to implement the revised plan (see I, B,, B,bove) is crucial to the success of the plan. Only if the Soviet farmer and industrial worker can see the 'tangible result of the program and respond to Its stimuli at an early stage is there any likelihood that the plan may bear ruit overhort period. It is difficult to forecast with any even remote degree of accuracy the possibility thatadically different approach to Soviet production and distribution will be embraced by the Soviet citizenry. Increases in trade turnover for the second quarter3ubstantial advanceover the rate obtaining in any quarterly period since the first quarterj/ This indication is sufficiently Isolated as not to be considered definitive, and it is also sufficiently high ss not to be disregarded.
INDICATORS SUGGESTING IKPLmEHTATION OF THE NEW SOVIET ECONOMIC POLICY
The following indicators are submitted as evidence whichew policy toward agriculture snd consumer goods in the USSR.
thc plenary session of the Central Committee of theGoods Cooperation Workers Trade Union, the Chairman of thethe Central Union of Consumer Goods Societies illustrated thegoods turnover in the rural'trading network by saying thatdally turnover In rural cooperatives enterprises In October
of last yearillion rubles, but /That/ during the corresponding period of this year, despite low prices, it already amountedillion rubles."
article by Gatovsky, "Growth of PopularDeVelopment of Soviet Trade":
3 as comparedroduction of consumer goods has grown. If during the previous years, goods turnover wan, on the average, growing annually, in comparative prices,ercent,3 It has already grownercent."
3- urrent Digest of Soviet Press, Vol. V,, "Steadily Improved Soviet Trade":
"InIn conformity with government orders, consumer goods output will Increaseum totalling more thanillion rubles above the annual volume established earlier for the trade volume."
In the first half3 the Moscow Dynamo Plant- Kirovncreased production of consuraer goods by one-third.
FBIS, S3p. BPAO;
5- It has been reported that for thepecialist* and skilled workers are said to have returned to agriculture before November, or8 are agronomists and zootcchnicionB.
6. 3 the USSR Council of Ministers ordered supply ministries to consider deliveries of raw materials andto light industry ao first priority irrespective of fulfillment or deliveries to other consumers.
Contribution to ORR Project
7- Indications that the government's new policy is being Implemented by the food industry are suggested chiefly by thc following:
Influx of monitored radio broadcasts,volume, reporting on overfulfillmcnt and preterm fulfillmentplans by food enterprises from all areas of the USSR.
unusual (in comparison with previous yearo)press coverage which, since the springas beensuccesses and problems in the development of the food Industry-
decree issued by the USSR Council ofthe Central Committee of the CPSU "On the IncreasingFoodstuffs und Improving Their Quality."
Izvcstiya,.Improve Quality or Local Industry Products":
Director of Technical Administration of the MinistryIndustry, RSFSR, stated that surveys of consumer goodslocal and cooperative Industry in RSFSR were beingtep to improve the quality of output. Re also addedorgans, specialists, and consumers were participating In survey0.
Pctruchev, Chairman of the Board of USSR CentralProducer Cooperatives, stated that Union-Republic Councils of
Ministers and. the Central Soviet of Producer Cooperatives had worked out measures, on the Instructions of the Soviet government, for the improvement of the furniture production in the Central Asian republics and the eastern districts of the RSPSR and for the increasing ofand broadening the assortment of cnamelware, hardware, and loudspeakers.
FBIS,rmenian SSR meeting of the Supreme Soviet:
a meeting of the Supreme Soviet of the Armenian SSR,result of discussion of the question of Increasing productiongoods during theears, it was planned thatof Local Industry of the Republicouldfor the production of bedsteads, enameled andfurniture, and beer.
Pravda,.vital Tasks of Local Industry and Producer Cooperativea":
Chief of the Department of Local and CooperativeGosplan, USSR, announced that local and cooperativebeen assigned the supplementary tack3 for productiongoods ln the sum of moreillion rubles In
Contribution to ORR Project "Indicators or taplementatlon or rteccnt Agricultural Decrees":
12. Numerous essages and newspaper Items from Moscow and the provincial areas of the USSR indicate the following;
return of considerable numbers of machinistsspecialized personnel in industry to work on collectiveIn machine-tractor stations (MTS's).
reorganization of existing schools ofand general agriculture.
c- The increase in enrollmentu-ientr, in tractor-driving and maintenance schoolsesult of the recent decrees.
d. The holding of seminars to instruct directors of MTS's In the use of thc square-cluster (check-row) method of planting and seeding crops.
assigning of political organizers toand MTS's, where they are being treated with "care
use of focllitatea of thc CentralRoad Transport and Highways to transport agriculturalcollective farms to markets.
g- The sale of collective farms products in increasing quantities by consumer cooperatives shopoommission basis.
h. The sale of automobiles, trucks, feed, and building materials to collective farms which have sold products to the State In excess of their compulsory delivery quotas.
i- The construction of additional numbers of hotbeds and coldframes for use In vegetable production.
J. The construction of marketing facilities (sales booths and stallit) by consumer cooperative organizations to handle the products of collective farms and collective farmers.
Soviet Homepeech by Bardin:
li. "The development of Soviet machine building technique as well aa the needs of the industry producing consumer goods demand from our metallurgy an increased production of deficient kinds of rolled metal, in particular thick sheet metal, light section steel, rolled wire, and rust-free steel."
ignificant Is the priority given to increasedof light section steel and rolled wire in the Five Year plan. The increased production of these steel varieties needed by the light, food, and local Industries Is one of the Indices of the peaceful development of Socialist economy."
Tractor Plant Expands Output of Consumers' Goods":
14. The consumer goods shop of the Chelyabinsk Tractor Plant Is to produceons of aluminum ware0 tons more than produced
Contribution to ORR Project
15- An unchanged indicator la the continuing preference or priorities assigned to the coal industry by the allotment of alarge sum of investment into housing for coal miners. For example, thc coal industry in Kirghiz was assignedillionf3 million were to be spent for miners' housing. Coal miners, however, have long been one of the priority classes of industrial workers and have received preferred treatment In many ways.
oscow, Soviet Home Service:
16. 'Tne Ministry of Transport has outlined and carried out the necessary measures which Insure correct transport of foodstuffs and consumer goods by railway staff. Already in September the bulk of transport foodstuffs end consumer goods has increased noticeably."
FBIS, Ikoscow, Soviet Home Service;
17- igh rate of development in the Industries producing consumer goods and the further expansion of trade largely depend on the work of the transport system. Freight for agriculture must be given 'special attention by transport workers. Unfortunately,ransport Is not paying sufficient attention to carrying freight for the light and food industries and goods for the population."
INDEXES OF OUITUT OF THE SOVIET ECONOMY BY SECTORS AND BRANCHES
1. Major Sector*
Crops and Livestock
1. S.. AA5.
5" Mip^Ttlbn of the Gross
12. , USSR and Easternp. Vestnik Statu tiki No. u TcXFry 7. P W'IW-CCI,7.
- a3 -Original document.