SOVIET ECONOMIC GROWTH (S-3290)

Created: 6/5/1970

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CIA HISTORICAL REVIEW PROGRAM

J50

Mr. John A. Waring Research Analyst

Industrial College of the Armed lorces Fort Mctfalr

Washington, D. C. ear Mr. Waring:

The following Indicators of Soviet economic growth9 are forwarded ln response to your recent request for unclassified data on the subject (grovth rates for then percent):

Actual

6 7

- 3

Froa Soviet Official Sources Plan

National

Industrial

Agricultural

Froa BstL-natoa of Western Analysts

Actual

Gross national

Civilian Industrial

Agricultural

Western analysts believe that the actual performance of the soviet economy is better measured by statistical series computed according to Western criteria rather than by the officially published series. For example, the Index of gross value of

* Industrial production figure la for civilian production only, while the official Soviet plan and plan fulfillment data Include both civil Inn and military production.

Industrialublished by the USPP la not accepted by Western students ac mi accurate measure of Industrial growth.

The specific faults of the Soviet gross value Index include large and probably varying double-counting, as veil aa inflation of the index caused by excessive pricing of new products. Perhaps the cost important consideration tending to inflate Soviet reporting arises from the tremendous political pressure and peculiar financial incentives operating at all levels of the industrial hierarchy to make the gross value index for each plant, each region, each Industry, and the economyhole rise in excess of plan.

The rate of growth of Industrial productionas lower than in any other year in the post-World War II period. The reasons ore varied. In the first quarter of tbe year all economic sectors were affected adversely by extremely bad weather that disrupted transportation and retarded production. Other onuses which contributed at least indirectly to theare tbe deceleration that baa taker, place0 in the growth of Investment in industry, reflecting In part the notorious inefficiency In management of construction that has resulteduge backlog of unfinishedlowing of growth of the industrial labor force; an apparent slowdown ln the rate of technolog1col progress; and the inability of the cumbersome planning and administrative apparatus to cope with increasingly massive and complex tasks.

Tne ore rail decrease in agricultural production9 resulted mainly from smeller output of crops, including potatoes, sugar beets, grains, fruits, vegetables, and cotton. Crop raising was narked by generally unfavorable weather conditions which led to an above-normal damage to winter grain and other fall-sown crops, prevented timely spring planting, and seriously compressed the time available for fall harvesting. In addition, there was an overall decline ln output of livestock products, especially meat.

We hope these data and cccnents will be useful in revising the lecture cute rial. If we can be of further service, please do not hesitate to contact us.

Sincerely,

Officeresearch

-2-

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