SOVIET DEFENSE BUDGET

Created: 11/2/1978

OCR scan of the original document, errors are possible

The Director of Cenlul Inidl-yncejiMMY CARTER LIBRARY

8

MEMORANDUM FOR: Assistant to the President

for National Security Affairs

Defense Budget

Soviet Allocation cf Defense Resources to

Selected Geographic Roles

Summary

This study was prepared in responseequest from the Assistant to the President for National Security Affairs. It covers two areas. First, it analyzes the allocation of Soviet defense resources to three soecific

opposite cnina.

cor constar Soviet

i- constant dollars to reproduce these activities in the United States to measure their magnitude for comparison with US defense activities. Second, the study discusses briefly several other aspects of Soviet defense activities which display significant differences from US practices.

For forces which we believerimary mission against China, we estimate that duringeriod the Soviets allocated aboutercent of total rublefor defense. Me estimate that the dollar cost ofthese forces in the United States averaged some SISear, aboutercent of the estimated dollar cost of total Soviet defense activities.

For procurement and operation of homeland sir defense forces, we estimate that the Soviets allocated about 7of total defense spending in rubles over the past five years. The estimated average annual dollar cost of these activities wasercent of the dollar cost of total defense activities.* (We are unable to assess with confidence the costs of Soviet research, development, testing, and evaluation (RDT&E) programs for air defense forces,) Aboutercent of homeland air defense resources went for air defense against China and are also included in our estimate of resources devoted to forces opposite China.

ere scsed or, a broader de fini ciox iha>'. the one used in the L'Ss Planning endategories (DPPC). Under the PPPC definition, Soviet air defense accounted for aboutercent of ruble defence spending end the estincted dollar cost is about $S billion-less ercent of the cost cf total defense activities

For control of Eastern Europe, we cannotuantitative estimate. However, we believe that the proportion of Soviet defense resources devoted to this activity is very small.

Soviet forces stationed in Eastern Europe {and these in the Western USSR also) are among many factorsto Soviet control. However, evidence on Soviet plans for war in Central Europe indicates that the present level and composition of these forces are dictated almost exclusively by requirements for wartime operations against NATO. The Soviets plan to use all of their forces now stationed in Eastern Europe against NATO in the opening stagesar. Units passing through Eastern Europe from the USSR would be responsible--together with non-Soviet Warsaw Pactsafe-guarding Soviet lines of communication, and might be diverted for control of Eastern Europe if necessary. ajor requirement foroperations arose, however, the Soviets would most likely employ reserve forces from among those mobilized in the USSR. Consequently, we bel*eve that any current Soviet defense expenditures arising from the requirement fcr control, as such, are quite small--perhaps some portion of spending for training of reservists and for stockpiling equipment for mobilization forces. The contribution which soviet military forces make to control in Eastern Europe entails little, if any, cost over and above that associated with maintaining an adequate military posture against NATO.

There are other Soviet defense activities that arise from requirements or philosophies different from those of the United States. These include an extensive Soviet civil defer.searge force of Border Guards and Internal Security Troopsoviet practice of using military personnel for functions that in the United States would be carried out by civilians. The data presented in this study on the costs of Soviet defense activities exclude most civil defense costs because some of these costs do not fall under the US definition of defense activities and we lackestimates for others. Tho estimates also exclude the costs of Internal Security Troops because these troops have functions which the US would not consider related to national defense. The data include the costs of 3order Guards because these forces have military functions. The data are not affected by differences in tha mix of military and civilian personnel because they include th* costs of defense activitie regardless of who carries them out, and they exclude the costs of activities considered not to be defense in the United States.

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The resource allocations discussed above took placethe contexteneral increase-in Soviet defense spending. Over the past five years, total Soviet defense spending in rubles has grown at an average annual rateercent. The estimated dollar cost of total Soviet defense activities has grown at an average annual rate ofercent and exceeded total US defense outlays by aboutercent overeriod.

The resources allocated by the Soviets to forces opposite China and to homeland air defense are numerically equal to about two-thirds of this difference. Direct comparison of total US defense spending with the cost of Soviet defense activities excluding these two categories, however, does notalanced measure of defense resource allocation. It does not account for thewith which the Soviets can redeploy some of their forces or for categories of US defense spending which have no direct Soviet equivalent.

The table on the following page summarizes our findings.

oviet(Annual average Eor the) 1/

ronsiant dollars

I'd

7 dollars Procurement and Operating Expenditures for Forces Opposite China

IS

constant rubles

ubles of total

12

and Operating Expenditures for "Homeland AiC21

6(A)

Expenditures for Control in Eastern Europe

All Other Procurement and Operating Expenses

for

Military/

Not quantifiable; probably very saall

Li

23

2/

figures are rounded to Che nearest billion or percent. Data for homeland ai: defense. Figures ir. parenthesesto the air defense mission category in US defense accounts. See pace S.

Aboutercent of the resources for homeland air defense were for defense against Chinese air attack, and arc also Included under forces opposite China. The subtotal figures in this line eliminate this double-counting. W'e are unable to allocate RDTfcE resources with confidence arong missions. Ve believe, however, that thef Sovietctivity directed specifically against China is negligible and havene in our estimate of resources for forces opposite China.

Concents

V

Soviet Allocation of Defense Resources

Selected Geographic Areas and Roles

Allocations for Forces Opposite

Allocations for Kens land Air

Control of Eastern

Other Differences Between US and

Defense Activities

Figures

Annus! Resource Cost of

Forces Opposite Chins

Annual Resource Cost of

curement and Operating Activities for Soviet Homeland Air Defense Forces

Preface

*

Purpose and Scope

This study was prepared in responseequest from tho Assistant to the President for National Security Affairs. overs two areas. First, it analyzes the alloction of Soviet defense resources to three specific activities: forces opposite China, homeland air defense, and control of Eastern Europe. Second, the study discusses briefly several other aspects of Soviet defense activities which display significant differences from US practices.

Derivation and Uses of Defense spending Estimates

We derive our estimates of Soviet defense spending from the "direct costing" of the various forces and activities that make up the Soviet defense program for each year. The costs of these elements, added together, yield figures for total defense spending and its major components.

Our estimates of the Soviet resource commitment to defense are presented in two measures--rubles and dollars. Both have been calculated in constant prices so that they reflect real changes rather than the effects of inflation. The ruble estimates reflect our understanding of the cost of military equipment and programs in the USSR. Ruble estimates are useful for analysis of the economic impact of Soviet defense programs, the resource choices confronting Soviet planners, and the relative priorities they assign to the forces end activities that make up the defense effort. Our dollarreflect the hypothetical cost of reproducing Soviet defense activities in tha United States. 3ecause they are in familiar terms, they give theeneral picture of the magnitude of the Soviet effort and are useful for comparison with data on US spending for similar programs.

Both the ruble and the dollar estimates are measures of the annual flow of resources to Soviet defense activities and

This study was prepcrcd by the Central Intelligence Agency inthe Dexrtnenz_cf Dsfcsc. Coaatnts and questions eraa directed

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do not measure fully the size, composition or militaryof the Soviet

We present our estinates in two ways: in terms of absolute magnitudes and in percentages that indicate shares of total resources allocated to defense. The percentage shares differ slightly between the ruble and the dollarbecause the components of the Soviet defense effort have different relative prices in the two currencies.

Both the ruble and trie dollar estimates of resource flows are subject to uncertainty. We have more confidence in the estimates of the total resources allocated to defense than in our estimates of allocations for the component programs. We believe that the overall dollar cost estimate for Soviet defense activities is unlikely to be in error by more thanercent. We cannot quantify the uncertainty in the ruble estimate, but independent intelligence reports have corroborated ourof total spending. It is also consistent with our analysis of published Soviet economic data. In this paper, we have noted those areas in which the uncertainty is particularly acute.

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CARTER UBRAR

llocation of Defense Resources to Selected Geographic Area^-and Roles

Our analysis of the allocation of Soviet defense resources by geographic area and combat role is based on our best judgments about the primary targets and missions of selected Soviet Forces. These judgments are derived from evidence of the geographic deployments of the forces, the technical characteristics of Soviet weapons, and indications of Soviet war plans. We estimate the procurement and opfiratfng expenditures for the forceson the basis of their manpower strengths, equipment holdings and activity levels. We estimate expenditures for support activities directly attributable to specific forces in proportion to the share which these forces comprise in the Soviet order of battle. We allocate the costs of general support activities that cannot be attributed directly to tha forces by prorating them on the basis of the costs which we candirectly. In most cases, we cannot allocate research, development, testing and evaluation (RDT&E) expenditures among geographic areas and roles. However, we can identify certain sets of Soviet defense activities to which no RDTtE costs should be attributed because these activities have little impact on Soviet military research and development programs.

Allocations for Forces Opposite China

The Soviets maintain substantial military forcesEast. Host of the impetus for the buildup of these forces

in recent years has been the threat the Soviets

China. This paper defines selected Soviet forces in

East as having primary missions against China duringperiod. These include:

ground and tactical air forces in the four Eastern military districts,

-- peripheral attack bombers in the Transbaykal Military District,

-- G-lass ballistic missile submarines in the Pacific Fleet,

-- all strategic air defense forcesiles of the Chinese border,

ROMs targeted against China.

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During the period the SovietsCBMs in launchers oriented so that they could cover targets in Asia -as weil as in the United States. We^_have not" included these SS-lls asrimary mission against China. If we were to include them, they would raise the percentage of Soviet defense resources directed against China by less than one percent. Further, although Soviet heavy bombers and some ballistic missile submarines are capable of attacking China, we have judged the United states to be their primary target and have emitted them from our totals for forces opposite

China.

We have also omitted costs for general purpose naval forces in the Soviet Pacific Fleet. We believe that the size and composition of the fleet has been dictated primarily by the threat which the Soviets perceive from western naval forces in the Pacific and that expenditures for the Pacific Fleet would not have been substantially different if there had been no Chinese threat. The Chinese navy isoastal defense force and poses little threat to Soviet naval forces. Moreover, Soviet naval operationsar with China probably would be quite limited.

Overeriod, the Soviets allocated someercent of total ruble defense spending to procurement and operation of the forces which we have identified as oriented toward China. In dollar cost terms, this allocation averagedillion, aboutercent of the total estimated dollar cost of Soviet defense activities. These data do not include anyesources. We believe that the portion of Soviet military RDTsS directed specifically against China is negligible and that thereforepending woujd have been about the same evenhreat from China.

hows that the Soviet resources committed to procuring and operating forces against China over the past tenperiod during which the bulk of the buildup tookgrown rapidly. They were nearlyercent of the total defense resource flow in rublesompared to lessercent This trendajor expansion of Soviet forces in the Sino-Soviet border region,oubling of the number of ground forces divisionsivefold increase in the tactical aircraft inventory. In addition to this expansion,onsiderable portion of the resources devoted to forces opposite China was for

cot*

Figure 1

Estimated Annual Resource Cost of Soviet Forces Opposite China

Spending

Dollar Cost

1ST* turns 3* '

tt

M

It

M

-

7?

Dcfanse Activities Opposite Chine As A. Share of Total Defense Accivicies

Subles

Dollars

modernizing the forces in connectioneneralprogram throughout the Soviet military establishment. For this reason, even in the unlikely eventull Sino-Soviet rapprochement, we would not expect Soviet defense spending to be reduced by the full amount expended on the buildup of forces opposite China.

While the Soviets expended these resources, in large measure, in order to meet the threat from China, they comarise an element of overall Soviet military power, and could be" redeployed for other purposes. However, the extent to which forces currently opposite China could be redeployed (for example, ar with NATO) would be constrained bv the Soviet need toredible force posture against China.

Allocations for Homeland Air Defense

Homeland air defense includes all interceptor aircraft and surface-to-air missiles (SAMs) subordinate to the Air Defense Forces (PVO-Strany). Although the Soviet airishment is very large, duringeriod, onlyercent of total defense spending in rubles was allocated to procurement and operation of homeland air defense forces. Thiselatively low share of expenditures bv historical standards, primarily because of temporary downturn* in procurement cycles for SAMs and aircrafz. The estimated dollar cost of homeland air defense forces averaged almost SB billion per year,ercent of the estimated dollar cost of total defense activities.* (Aboutercent of the resources devoted -to homeland air defense--in either ruble or dollarfor defense against Chinese air attack. These resources are also included in our estimate for forces opposite China.)

None of these data include RDTiE costs. adds still more to the Soviet commitment o* resources to air defense, but we are unable to isolate the portion of Sovietostsspecifically to air defense.

Homeland air defense does not include tactical SAM systems integral to Soviet Ground Forces or fighters assigned to Soviet

1 r-ws induce cSTzai* wMPport costs that era omitted fromC flu- dtfatce category,. Using the DPFC definition, hcnelcnd air defense resources comprisedercent of total ruble spendingnd about SS billion, or lessercent of the total estimjted dollar cost of Soviet defense activities.

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figure 2'

Estimated Annual Resaurce Cos: of Procurement and Operating Activities for Soviet Homeland Air Defense Forces

Spending

Dollar Cost

Homeland Air Defense Activitieshare o: Total Defense Activities

Rubles

Dollars

-U

TT

" Tlitiuu support coats represent additional air defense support resources not included I" Lliu ili'rc The escinate for chece costsless certain Cliar. those for other coupon,

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5

COPY CABTiS'JSHAT-Y

Frontal Aviation. The primary mission of these SAMs and fighters has been support of the Ground Forces, but they -have operated in exercises under the control of PVO Strany and under some circumstances could supplement homeland defenses. Less than one percent of Soviet defense spending in rublesent to tactical air defense SAMs. The estimated dollar cost of these SAM programs averaged aboutillion dollars each year.

isplays the time trend in resourceto homeland air defense and itsSAMs and support. Resource commitment to these programs was relatively high duringeriod, reflecting heavy procurement of theAM and Flagon and Foxbat It declined25ecrease in procurement of SAMs and fighters. Spending has turned up again in the last two years primarily because of Finger aircraft procurement. Over the decade the Soviets replacednterceptors with newer, advanced models.

Control of Eastern Europe

We cannot quantify the proportion of Soviet defense resources devoted to control of the non-Soviet Warsaw Pact (NSWP) countries. We believe, however, that it is very small. The Soviets probably regard their forces in Eastern Europe (and those in Western USSR also) as contributing to control of the Pact countries by their presencen the past, Soviet military forces have been used directly for control on several occasions. They put down revolts in East Germany and Hungary in thend invaded Czechoslovakia However, we believe that the size and composition of Soviets forces in Eastern Europe during the period of this study has been dictated almost exclusively by requirements for war against NATO.

Since, Soviet plans and exercises for war in Central Europe have calledorce of roughlyivisions, organized into three fronts, each attackingain strategic axis. In the, this

'There are several other elements that, from the Soviet vie'j, contribute to Moscow's control of Eastern Europe. These include Communist party controls, the Pact countries' economic dependence on the USSR, and the ever-present Soviet advisors and secret police agents.

CooyCaftetUbrary

force was to be composed of Soviet forces in Eastern Europe, supplemented by forces moved forward from the USSRew NSWP divisions. he, the Soviets had modified their plans and, in order to lessen the requirement for reinforcement prior to war, accorded the NSW?reater role in initial combat operations--This basic strategy has continued to the present.

Today, there arearsaw-Pact divisions in Central Europe, of whichre Soviet. ll Warsaw Pactdepicting armed conflict with NATO in the central region, all Soviet ground forces in Eastern Europeincludingivisions incommitted to the initial Pact offensive, as are all first-line East German, Polish, and Czechoslovak divisions. There is no evidence in exercises or in any other sources that the Soviets plan to withhold any of their forces in Eastern Europe from initial combat operations in order to control their NSW? allies.

Soviet forces passing through Eastern Europe from the USSR would share with the NSWP forces the task of safeguarding Soviet lines of communications to the front and could be diverted for control if necessary. However, we believe thatajor requirement for controlarose, the Soviets would most likely employ reserve forces from among those mobilized in the USSR. Thus, some part of Soviet expenditures for training reservists and for stockpiling the equipment for mobilization forces might logically be categorized as related to control in Eastern Europe. However, even expenditures for training reservists and stockpiling equipment, whichery small proportion of annual defense spending, are determined primarily by other factors.

Although the Soviets still distrust all six Pact allies in varying decrees, the Soviets view of requirements for war against NATO has led to the assignment of critical wartime roles to several of the NSW? countries. The Soviets seek to maintian the reliability of their NSW? alliesariety of measures, one of which is the threat of military force. The contribution which Soviet forces make to control of Eastern Europe, however, entails little, if any, cost over and above that associated withn adequate military posture against NATO.

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Other Differences 3etweer. Soviet'S Defense Activities

There are other Soviet defense activities that arise from requirements or philosophies different from those of the United States. One example is the extensive Soviet civil defense program. We do not know the total cost of the Soviet civil defense effort. We have, however,the cost of three major elements of the Soviet program: full-time civil defense personnel, operation of full-time civil defense units, and shelter construction. For thee estimate Soviet expenditures for these elements to have beenillion rubles. The estimated cost of reproducing these activities in tho United States is about S2 billion. The estimates of total Soviet defense expenditures presented in this study omit all of the costs of the civil defense program except pay and allowances of uniformed military personnel engaged in civil defense illion dollars, or co milllior. rubles).

The Soviets have- two types of militarized security forces: Border Guards subordinatehe Committee for State Security (KGB) and Internal Security Troopsto the Ministry of Internal Affairs (MVD). We include th costs of the Border Guards because these forces are organized and equipped as military units and have military tasks in time of war. We exclude the costs of MVD Internal Security Troops because they perform functions which are carried out in the United States by police forces.

Ths Soviets often employ military personnel in staff, support, research and other functions which in the United States would be performed by civilians. This practice does notignificant impact on our estimates of Soviet defense resource allocation because these estimates reflect the costs of specific defense activities, regardloss of whether military or civilian personnel carry them out. The Soviets also use some military personnel for solely civilian functions but we exclude the costs of thesefrom our estimates.

Conclusion

The Soviet allocations of defense resources to forces opposite China and homoland air defense, discussed above, took place in the contexteneral increase in Soviet defense spending. Over the past five years, total Soviet defense spending in rubles has growr. at an average annual rateercent. The estimated dollar cost of total Soviet defense activities has grown at an average annual rate ofercent and exceeded total US defense outlays by aboutercent overeriod. The

estimated dollar cost of Soviet defense activities0 billion, was overercent larger than the total US defense outlayillion.*

Taken together, the resources allocated by the Soviets to forces opposite China and to homeland air defenseaboutercent of the total estimated dollar cost of Soviet defense activities and aboutercent of total defense spending in rubles overeriod.

These two categories are numerically equal to about two-thirds of the difference between the estimated dollar cost of Soviet defense activities and US defense outlays* Direct comparison of total US defense spending with the cost of Soviet defense activities excluding homeland air defense and forces opposite China, hcwever, does notalanced measure of defense resource allocation. It does not account for thewith which the Soviets can redeploy some of their forces or for categories of US defense spending which have no direct Soviet equivalent.

Moreover,impl= numerical comparison obscures the fact that much of Soviet spending for these two sets of activities vas for force modernization within the contexteneral upgrading of Soviet military forces. Even if the Soviets had nothreat from China, for example, we doubt that their defense spending would have been correspondingly smaller. It is likelyonsiderable portion of the resources expended for forces opposite China would have been used to speed modernization of other strategic and general purpose forces.

'Date on US dsj's^.se outlays include national security programs Of DoD, the Department Of Energy end ths Department ofOutlays for pensions are ezcludsd. The daze are based or. the DoD Five-Year Defense Program and ihe Budget of the United states Government. Me have converted them to7 prices and to calendar year terms for purposes of comparison.

*'They do not, houever, account for discrepancies between US and Soviet defense resource allocationumber ofspecific areas. For example, the estimated dollar cost of Soviet intercontinental attack programscsillion, and exceeded comparable US outlays of soneillion by about ercent. (Addition comparisons and analyses of trends in Soviet defense spending are detail in Estimated Soviet Defense Spending:ollar Cost Comparison of Soviet and US DefenselCQOl, Copies of these studies are attached.)

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