CIA HISTORICAL REVIEW PROGRAM ^ RELEASE AS*
CIA/RR
CENTRAL INTEUIGEKCE AGENCY OFFICE OF RESEARCH AHO REPORTS
INTELLIGENCE1
subjecti Analyflio of Berirnta Official Speechtho Soviot Econoay onh Anaivcroary of tha Socialist1
The ceo cede gains Bade by tho Sovleto1 (projocted for0s reported by Lovrently P. Beriya, Politburo caber and fomnr Chief of the Socret Pollcon hie official speech onhof the "Greet October Socialistay bo surcod upby his stetenttcts "that the national ocoaowy plan1 will be fulfilled and exceeded" and thatproduction oo conparcd with last year has increased by mora thanercent and vill bo doublo tho0 Ko stated further that tbo lncroaao in production in tlio basic industries Isercent.
Tho lncroaao In production ban boon attributed largely to laprovenont tn tochnlcal equipment, which In turn has Bade possible an Incroeso Inof labor (by which the Soviets probibly seen output per vorkor par unit time).
Tho Beriya speech shows that tho Soviets1 Plan despite ths fact that no fifth Fivp Tear Plan hat boon published es yet. The progress in ir-dustrlol production cade raider this Man, a? reported by Porlya, Is consistent with that Dado In rocont years ond In Eoneral Id in line with in* doj'wdcnt estimates or nay be reconciled vith thcu by cartain into:-protatlo:r-
Scoa cliiias appear to be extggoratod fid no doubt arc intendedut, if properly analyzed, may be latorpratudfuture ylnnu.
The s'Aeuhat bcBbastic ststocants or this Soviets Sa coiifaring their with that of Western Eurojw and othor countries whereantatfO toayuo, but tliosnaro itlsloEdicsith tho ITS,d ''.irxtuetfoo of ps'.sol
I, ihtRit ihtmUIi, their electrich. cam Cjtajtaa.'i ertctlair. Omb ont-tfctst*.
WIS DOCUUgNT CONTAINS INFORMTnim'r. JfOF THE JlTED STATES " THE
hvll 05
The oconradc gains Bade by tho Soviote1 (projected for the firsta reported by Lavrontiy P. Berlya, Politburo mcobor ond foraor Chief of the Secret Policen bin official speech onh anni-veroary of tho "Great October Socialistay be erased upby his statements "that the national economy plan1 will bo fulfilled and exceeded" end that "industrial production as compared with last year has Increased by store thanercent and will bo double tho0 production." Ho stated further that the Increase In production in the basic Industries Isercent.
Tho Increase in production has been ottributod largely to Improvexsat in technical oquljnont, which in turn has node pooslblo an increase inivity of labor.
2. Swrosrv of Production of Selected Basic Itoao.
Tho following tablo has boon compiled from the available dataew basic itaxs to illustrate the gains that havo been modot
Production of Selected Basic Iteas In tho USSR
Steel (Million ffrtric Tops)
Electric Pcnre: (Billion
Petroleum (Million Metrlo Tons)
oviet Claims
oviet Claims (Bulganln)
ase
lan
4
0
4
Examination of those data in the light of Soviot claim* shows that for thebasic Items, steel, olootric pouor, end potroleun, tho increased production ofoercent for those ltezs10 isased oo Soviet official figures for both yzer*. Moreover, current CIA
{
figures on thoso items, while somewhat lover, cay bo reconciled with Soviet oata whoa interpreted fron certain points of view.
Tho Soviot claim of double tho0 production, however, cannot ha substantiated (except for electric power) if it is applied to the production of the najor basic items, eltboufih it could apply to ccoo items, ouch asrubber. On tho other hand, it can be demonstrated that if thin clnL is applied to ruble valua (estimated byricoa acd by scaa nnnipulctioa of thohe statOTant Bay bo proved. 0 production in rvblo valueillions,illions of rubles waco doubled, which lo in lino with Bcriyo's statetaat,
1 gross industrial production figure (expressedubles andainercent0ercents on inadoquato baronotor of industrial activity. 1 figureubstantial upward bias resulting from two factorsi rices oro uasd as weights for all Items vhooo initial production occurred earlier, and (b) prices for tho first yearproduetion ero used as weights for all items whoso initial production occurred, In both cases, these prices are, in genoral, higher (rolativo to prices'of uoaindustriol ccnaoditios) than pricae for subsequent years.
In any event, substantial gains ln industrial production have bean nado by tho Soviets.
sstom&uiUterf^ Bflgjat Ctea.
Ccroful analysis of each of tho Soviet- claims regarding production shovs that In npito of tho apparent ovidonca to tho contrary, they have not inroad sense axoggoratod their figures. But the claim1 production uill bo double that0 raises at tbe outset the question of whether tho Sovlots aroto misload or to exaggerate. Their language is so adroitly chosen that it can readily niilead tho unskilled or tho unwary aa no doubt is intended. Moreover,t penetrate certain of their cryptic or ambiguous atatcaento to at their real meanings. Their technique no doubt servos the purposo of proncgoalB for tlioir own people. At the saao tine, they aro able to present fectiuO dste on wajor items which can stand dlrocl examination. In addition, many, if not most, of these amblgiious state-aact3 afford thendeed they feal that they need one,uestion of oabieuoua and 9islecd<iic statements will bo furthor iiluatrotod by othor oieaploa below in thof their cryptic otatonenta.
Tb9 Soviets no doubt believe thatirect presentation of some of thair industrial gainsasic for justifiable pride, particularly with respectincreases in the production ofar itass as steel'(also pig iron aiid
rolledrude oil, and electric paver. n contrastoutput ofgiven In direct figures Instead of cryptic
percentage increasoo. The Soviets state that they have achieved anofillion metric tons of stool and an Increaselllion metric tone of crude ell1 The claim thatofillion metric tons of crudeear (the goal set by Stalin6lll be reached ahead of schedule appears to be amply Justified. Electric pover production alco la givenirect figureillion kllovatt-houra Thoao claims, as pointed out above, may bo reconciled vith current CIA figuroa on those Items when interpreted from certain points of vlev. There apparently ia no attenpt at evoninn in tho Soviot claims vith respect to any ofthree items. Soviot figures for pig iron and rolled otool are In lino with their estimated raw stool production and vith previously published official figures.
The Soviot statement that electric pover production exceeds the combined output of electric pover In the CX and France is Justified by the facta, but It in noticeable that the Soviets do not state that it la about ooo-quartor of the pover output of the US. Similarly, the somewhat boastful claim of tho Soviets that the USSR la nov producing roughly as much steel as tha UK, France, Belgium, and Svoden togothor, based on tho1 estimate, io essentially corroct, but tho Soviets do not include the statement that thoy arcaovhot leas than ono-third of US stool production.
4. Other Claims Etado bv the Soviets.
a. Coal.
The claims of the Soviets that "the USSR coal Industry today not only neots tho requirements of our country but also has insured tho creation of tho nocossary reserves" are conservative and no doubt can be substantiated larespects vith tho ono possible exception of an immediate supplyuitable quality of coking coal for all of their expanding and future nocds.
b- Txagapprtajlfln,.
Tho lncroaao ofercent In railroad frolght turnover and tho claimed Increases in river and aaa transport appear to bo Justified by tho availablo data. 0 planillion ton-Viloaotera for frolght turoovor was substantially exceeded In that year, and continued progress appear; to to lo evidence On tbo basis ofillion ton-kilometers actually porformcd0 end of the1 increase ofercent in railroad freight turnover, tho Soviet boast that the increase almost equals tho annual freight turnover of the UK and Franco fells short of the iwrx by aboutercent.
c
o. BuiIdJag_and Constnictlon.
Building and construction gonorally hnvo lagged in the DSSR. The failure to meet tho planned output quota ia duo partly to shortages of mechanical equipment. Tho major cause, however, is lack of emphasie on this program as ocaparod with other industries.
It ia believed that cement, brick, and ceramic pipe production1 will be greater thans there aro ample supplies of raw material; availablo in tho USSR for those products. However, on increaseillion tons of cementear, as clained by Beriya, doo3 not seem to bo probable.
Beriya stated that "our builders have aohicved aertain suoocssos in reducing tho ooat and the time of oocatruotiono11 Bui doapiio oleics of increased availability of .materials and machinery, tho Soviots teoitly admit their backwardness in building and oonstruation in Beriya's furtherftrjrovor> there is still much thoy have to do. First oftho organisationk in building sites should be put in properuilding Boohlnory should bo used more productively, cork should bo better organized and overhand expenditures sharply Unncoessary expenditure whloh mates tbs cost of building core axpoasivo and whioh is still contoinsa in projoatn and oatlaotoa should be
d. CQpsyaar Goodg.
Statements about increased production and availability of conauaor goods gonorally are in lino with quarterly DSSR reports on tho same subject. Thoy appear toubstantial incror.se in the standard of living, but actually this ia not tho caso.
Tho percentage increasoo reported for consumer goods reflectto moot the noods of gradual incroasoa in urban population, and tho dato reflect nonfarm consumption as well as changes in the marketing of consumer goods to government-operated stores, Tbe actual increase of consumer goods as reported, if calculateder capita basis, night not even be apparent.
In general, while some advances cay Uve been aade by theheir etandards of living ars still very lou in comparison with the West,
Technological advances in the ehsfiiAcul .industry are specificallyto but ore not disclosed except inof incroassd production,of fertilinors, Aneeeticidos.ynthetic mbbay. fierSya slates
a b" lncreanttd bJercent over last year, making official deta.
-ynthotic rubbor production lo greater than current CIA estimates, ovenindicate eorq then double prewar production. Nothingidin the quality of synthetic rubber, which is important fromof view of technological
J,iJar qualitative question oloo nay be roleod about thofl- to- Jncreacon totaf
Lbt^denco.laCtnreaconablo fron
urtino."of a
powerOO kilowatts nevor before produced in thea relatively minor, and the statement ia Incorrect, ad there are of least oovernl In the
tWo olso. CO.COO-kllowatt turbine is now under construction for the Philadelphia area.
Tho most important, Soviet technological advance, judging fran tho results reported, appears to be in the production of steel. In which it is claimed that tho Soviets aro exploiting their "blast furnacesore nway" and that "on account of this alone1 an5 ailllon motric Una of stool will be produced." Thuo, if the dales are true one-third of this year's increase in steal production has bean producedut the building of new blast fumacoo and the oxpaadituro of stool which would otnorwise nave boon nocesoary.
S>faH eP FrylHgtiTiVTtor-
Tho elaln that productivity of labor (by uhich tho Soviets probably neon output per worker per unit tima) in Industry waa raisod byercent appears to be acceptable, as is the reported growth of population,ot Increase ofillion per year. The Soviots recognise that increased productivity of labor is Intimately tied In with lnproveBont in technical equipment and skilla of tho workers as well as with organisation of production. Moreover, thoy state that thsso factors have mode it possiblo to Increase productivity of labor end thes to account for almost tvo-tbirda of the increase in industrial production. Howaver, the Soviot method of measuring productivity of laborubstantial gain that may be misleading Derive does not distinguish changes in productivity of labor resulting froa twoeots of factoroi hanger, in the capital equipment-labor ratio andchongos In tho efficiency of labor withfixed capital oquipaiint-iabor ratlo Tho Soviet statement about the education of toebniciens and specialists and about higher education has boon substantiated generally by CIA estimate*.
5. Othoi-ncyftrp In Berlva's Speech.
No dofimlto production claims vsro Bado ln connection with the so-called "upsurge lnut the implications of such Increased production as night be Inferred free the Soviet statements are coat Important. The states ant that the gross harvesting of grains in the past few years hasillion poodsnnually figures out atillion netric tons gross or biological yield, or aboutillion BBtrio tons not ln barn, using tho usual loss figure ofercent from gross yield to net. These claims may have no definite nteanlng for current produetion, becauso theyusbor of yoars, and tho relationship basod on Soviet claims between groos and not yields is somewhat obscuro. For example, last yoor Bulganlnillion motric tons,illion metric tons not, basedpercent loos. Current CIA estimates, as well to averages for tho past soveral years, are somewhat lower than Soviet claims, probably indicating that loso factors are larger, than thoso shown or that claims based on gross yields are exaggerated. The statement also Is cade that "the extension of irrigated areas and water supply to the fields will aake It possible,illion poods moreoor. This would amountillion netric tons (not in barn on tho basispercent loss factor}1 had tho plan boen Implemented. If accepted, as spplied to currenthowovor, tho statement wouldsloading.
Of still groator significance ln connection with possible attempts to mislead Is tho Soviot statement .that "tho extension, of Irrigated areas and water supply" to cotton would result In tho "productionillionf raw cotton uoro per year." Had this bean lsplaaontodho Soviet claimed production0 would be doubled. This statcaont is grossly Bis-loading if accepted at face value as en accomplished fact. If tho statement that tho DSSR will produce more cotton than India, Pakistan, and Egyptis used an an estimate1 production, it vould noon, according to tho Soviet claims, that they will produeo at5 Billion metric tons cf rawain5 Billion tone over last yoor. This would be Buch more in line ulth actual produetion than doubling tho ylald. Similar claims are mado with respect to othor agricultural products.
1. Ono poodounds,
The Increase reported in the socialised herds owned by collective farms end stato forms doeo not necessarily represent an actus! Increase in total livestock nuabern but Is largely duo to cbicgo ic ownership bocauso individual owners have boor, forced to sell their livestock to tho collective faresholo, Tho sain obstacle toncreases In actual inmtbors ofIt tho acute shortage of livestock feed.
Tbo Increase In agricultural Dochania at ion should resultreater productivity per worker. So far in the USSR tho rate of increase inper fern workeresult of increaood fern machinery has beenslower than in tho TJS8
Tbo section of the Beriya speech referring to potential Increases in crop and livestock production froa the extension of irrigated areas and water supply qssvsws the early completion of very largo-scalo construction projects. The completion of such projects on schedule is hardly likely in view of the difficulties of the projects themselves, tho unrealisticestablished for tho various phases of the construction work, and the high Improbability of such large increases in crop production. Largoin crop production In general haveerennial problem to the Soviets.
As another exampleryptic claim, tho following statement by Beriya might be Interpreted to chow an Increase in oil refining capacity1illion tons per year; or aboutercent of the required capacity as estimated froa present crude production. Beriya otatodi "Work for tho building and expanding of oil refineries has developedargo scale. New works equipped with first-class Soviot techniques which began to work this year can by themselvesill lem tons of oil yearly." The question arises hore a3 to whether work was begun on construction of thooo plants1 or whether they have already begun to operate at this capacity. The former conclusion goods much more reasonable in view of an over-all estimate of tho situation. Similar claims loss obscure ond important ore made onseveral othor items.
The Beriya speech shows that tho Soviets1 Plan despite tho fact that no fifth Fivo Year Plan has been published as yet. The progress inproduction cade under this Plan, as reported by Beriya, is consistent with that cade In recent years and In general is in lino with Independent estimates. Apparently misleading and exaggerated claims, if properly analysed, may bo interpreted as future plans. Tho somewhat boobastlc statements of the Soviets In comparing their production with that of Westorn Europe and othor countrios where they can show an advantage nay be true, Those statements aro misleading, hoievor, because they omit comparison with tho US, with regard to which their production of petroleisa is about one-ccvonth, their oloctric power output about ono-euertsr, end their steel output losn then one-third.
Original document.
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