CIA CONTRIBUTION TO NSSM 200 IMPLICATIONS OF WORLD-WIDE POPULATION GROWTH FOR U

Created: 5/10/1974

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raHORANDUM FOR: Mr. Claus W. Ruser

Deputy Director, Policy Planning Staffew State

CIA Contribution to

Tho attached CIA contribution too wholly unclassified. The cover chacts are classified only because they identify the contentsontributionssm. Only two copies of the attachment tore enclosed. All agencies should have copies of this document in any event.

Any question or comment nay be addressed to mo0 (note change in phono number).

CONFIDENTIAL

CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence

Contribution tondications of World-Wide Population Growth for US Security and Overseas Interests

Section

Potential Attractiveness of Alternative Development Models

CONFIDEKnAl.

5* Potential Attractiveness of Alternative Development Models

General Observations

states have seldom soughtparticular development models becausesome other state well. ational state

by its very existence is unique; and, to theit seeks to modify any given set of attitudes toward development, it may be expected to lookodel which offers the least conflict with indigenous institutions ratherodel which is abstractly appealing* Evenodel is imposed from the outside, as in Eastern Edrope lander Soviet tutelage, it tends to develop strong distinguishing national characteristics.

the extent that there isin per capita incomeivenwill be little inclination to swapfor new, even in the presence ofgrowth. Stagnant or decliningon the other hand, tends to createrevision of economic models whether or notaccompanied by rapid population growth.tends to seek economic solutions thatper capita income growth rather than for

systems of population control. Indeed, only China and Korea among our specific models have adopted national population control schemes. Population controlonger view than most governments take about anything but their national existence. Moreover, measures to control populationeriod of gestation and application prior to any generally perceived result; this period exceeds the life of most governments.

3. The rapid rate of world population growth and the poor performance of the Communist states and, indeed, many mixed economies in producing an agricultural surplus should remind us that thereorldwide need for an economic model that can encourage greater agricultural production. World grain stocks have been reduced to the level that the threat of starvation or revolt in some areas of the large grain-deficit nations may follow any serious departure from normal growing conditions. Several years of greater effort and favorable weather will be needed to restore an acceptable grain reserve situation. Widespread growth in per capita income would require an even larger increase in grain output.

4* Sustained economic growth culminating in an industrial urban society has usually led to severe reduction of population growth, irrespective of the economic model under which the growth took placefor example, the United States, USSR, Japan, and both western and Eastern Europe. On the other hand, no single economic model hasapability to control population growth and, indeed, none has shown any consistent attitude on the need for such control. The leaders of the People's Republic of China initially insisted that their system could provide economic growthtoeed for population control. They subsequently reversed this judgment,eed to reduce the rate of population growth sharply. They have not been successful with either of these programs. The USSR has also beenabout its population objectives. Ita falling rate of population growth when it was systematically seeking to increase the rate, and more recently the rate of population has increased as the government sought to maintain or reduce it.

5* The military states we observe in this study have no clearly defined population strategy.

although Brazil has opposed outside suggestions that it control its rapid rate of population growth, Peru has been so preoccupied with its development of an indigenous economic model that it has given no specific attentionopulation control Brazil patently has little populationgiven its resource base and present economic growth. Peru clearly has considerable population pressure, and its growing population haserious deflator to an otherwise acceptable rate of economic growth.

6. Our nixed systems also exhibit divergent population policies. India,elatively free society, democratic politicalixed market and planned economy,ritical population problem foreneration continues to behave as if its population problem were newly found and of little consequence either to the people or to the government. India's halting economic growth has so little exceeded population growth that the vast majority of the population has seen no progress whatever. Yet there has been no concerted effort either to modify the economic model or to lower the population growth rate.

The Republic of Korea has achieved rapid economic growth, and also hasoncerted effort to reduce its rapid rate of population growth. This program has brought the population growth rate from more thaner year in theo less thanoday. Yet the main constituents of South Korea's population control effort have been adopted by several other nations without visible effect, suggesting that economic phenomena are at least equally responsible for its apparent success in population control.

Generalization on the value of economic models for national development is dangerous. Over the past generation in which interest in economic development has been particularlyew generalizations suggest themselves. Marxist-Leninist models have been most successful in nationsonsiderable natural resourceand ateminal industrial capability. They have done rather poorly when installed inmore modern, complex economies. China has had to greatly modify the operation, although not the structure of the Marxist-Leninist model in order to achieve development. This has beenin spite of low per capita increases and

without substantial foreign aid. While building the modern sector, the Chinese have alsoigh priority to the utilization of rural labor* Mixed economic modelseavy dependence on the market system have been particularly effective in highly populated regions where the non-human resource base was inferior* Mixed systems tend to work best when government seeks to assure aviable private sector as well as developing infrastructure and sometimes basic industry* Those that have used governmental intervention toor weaken the private sector have beenunsuccessful.

9* One major development we expect over the next quarter century is the increasing politici-zation of international economicovernments will play an increasing role inmarkets and transactions. Theof this trend in the efforts of then the United Nations, the Arab oil boycotts, and recent efforts to develop bilateral deals for oil isarbinger of what may come.

ussr

16. In the Soviet development model,decisions are made by administrative fiat instead ofsignals. The characteristic institutions of the model include collectivized agriculture, public ownership of all industrial

enterprises and retail stores as well asand communication facilities, and central planningombination of administrative and market mechanisms. Tho institutions are controlled by the Communist Party.

17. The basic objective of Soviet policy has been rapid economic development. At the core of Soviet growth strategy has been:igh rate of investment in physical and human the concentration of investment resources in sectors that produce capital goods for further growth, he use of capital-intensive(borrowed in large part from the West) in favored sectors, while labor-intensive methods aro used in ancillary processes, nvestment in agriculture just large enough to allow this sector to provide the population with an adequate diet and industry"with raw materials and workers, an international trade policy featuring import substitutionthat is, capital goods are imported in exchange for traditional exports until thecapital can bo used to insure self-sufficiency. In its development the USSR has thus followed the path of brute forcedependingast-growing

labor force in the non-agricultural sectors and especially on large increments in fixed capital.

recently has the USSR begun tostrategy. Tailing investment returnsrates of population growth have forcedto try to switch from an extensive

to an intensive modelthat is, to pay moreto improvements in efficiencyource of economic growth.

USSR has compiled an impressive The Soviet economy is now thein the world;9 the growthGNP has exceeded that of the Unitedthis century and the long-run growth ofcountries. But the model hasas being wasteful and inefficient. efficiencythe rate at whichover timehas been less than thatand most West European countries in theyears. In addition, the model's staticmeasured by the level of output percombined capital and laboris quite lowwith other developed countries. Thesacrificed consumer welfare to the demandsdevelopment of heavy industry. Thus far.

Soviet industry hasard time satisfying the demand for consumer goods, especially from the standpoint of quality. The farm sector has been generally delinquent inuality diet.

20. Although the development model worked well for the USSR in its major development period, the model could not be transplanted successfullyarge number of today's LDC's. Before thethe Soviet Union already had an industrial base, was rich in natural resources, produced an agricultural "surplus" in normal years, and had no population problemin contrast to most LDCs. The model actually has notystematicpolicy. The anti-Halthusian nature of Marxist-Leninist dogma precludes direct state efforts to control population growth. various policies based on health andconsiderations may have influenced the course of the birth rate. Legalized abortions and high employment among women have dampened the rate, while family allowances, leave benefits for pregnant- women, and extensive child-care facilities probably have increased it. The net effect of these policies cannot be determined. Most likely.

the rapid urbanization that accompaniedwas primarily responsible for the drop in the birth rate from abouter thousand ino its currenter thousand.

Some features of the Soviet development model's institutional framework and growth strategy may appeal to the LDCs, howevor. The clean sweep of the old institutions by tho Soviet regime must interest some groups in those LDCs in whichways block economic development. So much the use of "war economy" methods of planning, which were eventually effective in the total mobilization of the Soviet population for economic objectives and which ultimately succeeded in placing theon the path of rapid economic growth. Even in the agricultural sector, tho LDCs will recognize that structural chango may bo necessary to encourage the use of modern, scientific farm methods and to provide increased food and labor for the industrial sector. Indeed, the Soviot state was able tourplus from collectivized agriculture for many years by means of its rigidly controlled procurement system.

As for Soviet growth strategy, high rates certainly promote economic development

but axe not unique to the Soviet model. The emphasis on industrial development seems to be favored by many LDCs, which believe the industrial sector is the price mover in attaining fastergrowth. These countries nay be especially attracted to certain Soviet capital-savingsuch as the use of labor-intensive methods in ancillary industrial processes, concentrationew prime targets, multi-shift operations, and continued use of obsolescent plants. But the priority given to large-scalo capital goodseems possible only in countries having the natural and human resources and the required market potential necessary for their develcssent. The model's neglect of the agricultural sectora critical weakness in terms of itsfor most LDCs. In fact, Soviet agricultural policy seemsath to avoid because the LDCs need to provide large annual increments of foodrowing population. Finally, many LDCs are still unwilling to accept the totalitarian methods used by the USSR in collectivizing private farms,manpower, and managing the economy.

CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence

Contribution tomplications of World-Wide Population Growth for OS Security and Overseas Interests

Section II, E

Impact of Population Growth on China and the USSR

CONFIDENTIAL

USSR

11. The USSR has generally viewed worldgrowthixture of apathy and disdain. Its attitude has been shapedwith its own domestic situation of underpopu-lation and slow population growth, n economic policy of self-sufficiency supported by an enormous resource base,opulation theories based on Marxian dogma that fail to recognize theworld problem caused by an excess of humanity. But Soviet attitudes may be shifting. In part, the USSR may fear that population pressures and historic enmity will cause the People's Republic of China to push into the population vacuum of Eastern Siberia. In addition, the recent world

concern about pollution and energy and foodseems to be having some impact on Soviet thinking.

Population Trends in tho USSR

attitudes about the threat ofhave been heavily influenced by experience. With anhe USSR is the thirdnation in the world, after theof China and India. Nevertheless,is not densely populated; itsersons per square mile is less thanof the united States and far lower thanof the industrialized nations ofand most of the larger nations of Asia.

The Soviet people arc heavily concentrated wost of the Ural Mountains, in the European portion of tho country; and even in these areas, populationare low compared with those of European countries.

growth during the first halfpresent century was retarded not only bymortality of World War II but also byI, the revolution, civil war,and political actions such as colloctivi-

zation and purges. 3he population within the present borders of the USSR increased at an average annual rate of0nnual growthubsequently, birth rates declined while death rates increased, so that the population growth rate fell% The rato remained below thatnd will probablyrising slowly during the remaining part of the decade.

Population Historically, Soviet demographers have denied the existenceopulation problem. They considered Maithus an apologist for the evils of capitalism and asserted that the misery he attributed to overpopulation was really due to the maldistribution of wealth. The Soviet Union has equated "overpopulation" with "relative surplus labor" that could be corrected by adopting This policy has led the USSR to oppose UN-sponcored population assistance program's. In particular, the Soviets considered developingmisguided for promoting birth control measures directly; much more would be accomplished, they claimed, if the resources devoted to birth control were channeled into economic development.

The prevailing belief that the most urgent domestic population problem is the declining birth rate probably reinforces the leadership's lack of concern about growing world population pressures* Domestic population policy has been ambivalentin some cases encouraging, while in otherschildbearing* Government programs and practices that tend to encourage childbearingfamily allowances, liberal leave policies, and numerous childcare centerscoexist with those that tend to discourage itcheap abortions, the pressures on nearly all women to work, and crowded housing conditions. Although probably not by design, practices likely to depress the birth rate appear to be the more numerous, and many of the programs which may be construed as pro-natalistsuch as the family allowance systemprobably are not very effective.

In recent years, the Soviet media have reflected considerable concern over the decline in the birth rate, especially in the urban areas of the European portion of the country. Thus far, there is no evidence that the Soviet leadership has become sufficiently concerned to consider the adoption of any strong pro-natalist measures.

ong-range point of view, the Sovietprobably would like toighernow in order toarger laborthe future, particularly since they arethat the recent tight labor supplyin large measure from the low. On the other hand, ain the birth rate would have severalconsequences that might not bewomen would have to leave the labor forceand raise children, and largerhave to be made in child-care andhousing construction, and theOf consumer Posi tion

17. The Soviet Onion's relative isolation from world markets also accounts in part for itsto the world's population problems. Soviet agriculture is somewhat erratic be-cause of the severe continental climate andinefficiencies, the USSR has beenself-sufficient in food. Also, the USSR has had abundant supplies in nearly all minerals, metals, and energy resources. In theoviet demographer expressed the USSR outlook as

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followsi "Even with very great population growth in the USSR, its situation with regard to resources used will remain completely favorable.- Indeed,aw materials exporter, the Soviet Union has been able to cash in on rising prices for world resources. Developing Recent developments may alter Sovietwith respect to population growth. First, Brezhnev's program to provide moro moat in the Soviet diet has pulled up the demand for feed-grains faster than farms have been able to increaso This has forced massive imports of grain wherein the USSR has had to compete with other supplios and needs in the USSR is not likely to improve fundamentally in the foreseeable future. Second, Soviet petroleum officials now complain about tho headaches the world energy crisis has caused them. They claim, for instance, that the USSR does not have enough oil simultaneously to meet its own requirements, to fill the neods of other socialist countries, and to continue todeliveries to established markets in other countries. For other raw materials, too, rising domestic demand and depletion of readily accessible reserves will gradually erode the USSR's advantage

in the longer term. As political relations with China deteriorated in, the USSR respondedassive military buildup along the Chinese border. In addition, the governmentigration policy in3 designed in part to settle moro farmers in agricultural lands along the Chinese border. The migration decree covers rural resettlement throughout the Soviet Union, but emphasizes particularly the Chinese border districts. Benefits under the new decree include lump sum payments, tax exemptions, building loans, and extended vacations with travel allowances.

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