USSR: CONSUMER FRUSTRATIONS

Created: 9/18/1979

OCR scan of the original document, errors are possible

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7vNALYSIS

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Growing consumerstrongand non-Russiancause theoferious eoonomia and political After .decades of neglecting consumer welfare*leaders are etill paying little more thanmad or- consumer concerns. If economic growth continues

decline ins projected, the standard of

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living will stagnate, forcing the leadership to increase internal controls or reorder economic priorities.

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By the, Soviet GNP growth will probably declineercent annually. If therate of growth of military spending continues to hold steadyercent while investment continues to grow by the already diminished rateercent annually, consumption will stagnate or increase by lessercent per year by the.

Attitudes

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For most of the time since World War II, mostclearly believed their standard of living was eneralized way they attributed this risesystem of government. The regime deliveredbenefits to secure atinimal level of

compliance and passive acceptance of its legitimacy. This was partly attributable to the regime's economic performance, but the cultural context and the population's vivid memory of much harder times in the not-so-distant past alsoole. The consumer's lack of contact with the outside world also made it difficult to conceive of alternatives to the Soviet way of life.

The average citizen's inclination to accept ashis personal circumstances and the system ofunder which he lived was accentuated by centuries of authoritarian rule and decades of Soviet propaganda.

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reference for security and stability over fteedoS and progress and an unusual capacity forconforVaity ?emained dominant features of the consumer-outlook.

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characteristic of the Russian psyche that has tempered popular criticism of the standard of living is national pride, manifestedendency to close ranks against foreign criticism and even against Sovietwho openly find fault with the system. pfllj

Impact of Consumer Discontent

Several developments threaten to erode the Soviet consumer's fatalism. Improvements in moderntogether with steps taken by the regime itself to liberalize contacts with the West, have increased thepopulation's access to foreign information, causing many people toew standard of comparison for their material welfare. As World War II grows dimmer in the popular memory, many are increasingly looking with envy at the contemporary West rather than comparing their situation with the grim Soviet past.

At the same time, many Soviet citizens have seen their high hopes dashed that improved relations with the US in the era of detente would bringramatic change in the quality of their lives. Some of them have blamed President Brezhnev personally for the rejection of the "trade agreementeeing this as denying them access to coveted Western merchandise. In any event the advances that have been made in raising the standard of living have whetted the population's appetite forimprovements. In the absenceational crisis Soviet citizens are growing tired of sacrificingomorrow that never comes,

Discontent with the standard of living is promoting economically counterproductive internal migration andturnover. An exodus of youth from the villages to

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out of areas that already suffer from manpower shortages

to enter areas with labor surpluses.

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Deficiencies in the availability of housing, consumer goods, and services are contributing particularlyeclining birthrate in the European USSR that is the cause for the country's growing labor shortage.

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consumer demand is alsoowerful impetus to private economic activity and official corruption, which tend to erode the authority of the party and raise questions about the efficacy of the Sovietsystem.

Crowded housing conditions, combined with the tedium of dally life, contribute to an increasing rate ofamong the world'spromotes absenteeism and industrial accidents and thus lowersoutput.

It seems unlikely that, on the eveeadership succession, any fundamental reordering of priorities to benefit the consumer or any major reform of the economic system to raise productivity will occur. For reasons deeply rooted in Russian history and the psychology of Soviet leaders, the regime's commitment to the expansion of Soviet industrial and military power continues to be the main-consideration in setting economic priorities.

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short-run consequences of continuing present policies probably will noterious threat to the stability of the state. Deficiencies in housing,goods, and services, however damaging to morale, are not- likely to ignite disturbances unless conditionsreat deal. Food shortages, by contrast, have led to active protestsut the level of unrest has been manageable.

the longer run, however, consumerwould have severe political consequences. Soviet

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can ill afford to ignore the material demands of their increasingly acquisitive society. If the regime is unable to maintain improvement in the standard of living by, the incidence of active unrest may well grow and push the leadership into taking more strenuous action to deal with consumer demands.

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Original document.

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