STOCKPILING OF STRATEGIC MATERIALS BY COMMUNIST CHINA AND THE USSR (SP 70-75)

Created: 4/8/1970

OCR scan of the original document, errors are possible

""OA HISTORICAL REVIEW

SB-EASE IN

g 0

8gyiet Stockpile Policies

In one sense, Soviet policies with respect to stockpiling resemble policies followed in other major countries. Inventories are bflU in the cconceiy as buffer stocks to minimize the effectseasonal or temporary interruptions in flows of various materials and finished goodsatural disasters such as floods and droughts. ddition, inventories are held for strategic purposes, to supply the military forces and the econocry with needed materials and finished goods in time of war.

An important ond essential difference between the situation In the US and that in the USSR, however, must be emphasized. In the United States, inventories held for economic reasons are larcoly under private control, and inventories held for strategic and military purposes are largely under governmental control. But in the USSR nearly all inventories are under goveriuncntal control, because the state controls and operates productive elements of the economy that account for socaeercent of the Cross national Product.

The SovicU cloak in secrecy much dataort that in the United States is openly available in voluminous statistics on inventories and stockpiles published by the governinr-nl. trade

associations, and trade Journals. During the postwar period, for example, the release of certain archival material deed ino. wilh Soviet preparations for World War II hasew facts about inventories of strategic materialsut only those4nl the beginning, of that conflict. Moreover, the Soviets, use complicated accounting procedures that appear to be designed to preventof stockpiling operations in financial accounts or in input-output tables. The obvious Soviet effort to conceal information on supply positions and on stockpiles of critical materials is aided by the fact that even should some tidbit of information on stock levels bpconw? availablehe specific purposes for which the stocks are held tend to be obscured by the brood range of functions served by governmental stocks In the USSR.

Identification by number is Mda only to distinguish the various categories of reserves, some of which have quite similar titles. Tim categories are not so identified by number in Soviet usage.

Although the taxorwenic approaches of various Soviet authors who discuss the concept of reserve stockpiles vary somewhat In detail, it appears that the categories of centrally-held reserve stocks relevant to discussion of strategic problems are those shown in Figure 1. The so-called "State Reserves" (category I) may bo thought of as the total inventories of materials and finished goods held in the socialized sector minus (l) the "normal" inventories of enterprises and state supply organs the Fkwrgcncy and rtobiliz&tion Reserves held by the armed forces (category II)arge part of the State Reserves is heldentralized system of storage facilities operated by the Main

AdnitiicLr.Jtlon for State Materialody directly responsible to the USSR Council or Ministers.

Created to ensure uninterrupted economic development and to

-strengthen defensive capabilities, the State. Reservesoftypes of raw Materials, fuels, semi -

fabricated goods, finished Roods, and foodstuffs; substantial Inventories of military hardware are included. Use of these reserves generallyecree of the USSR Council of Ministers,

although renewal of stocks (or grain, for example) or short-term

borrowing from certain stocks may be accomplished under standing

procedures.

The State Material Reserves (category, administered by the Main Administration for State Material Reserves, comprise stocks of0 catnodities ranging from ccamon consumer goods such as vheat and tobacco to critical materials such as mercury and *et fuels. In peacetime these stocks standuffer ugainst drastic interruptions in supply oreans for servicing laree essential, but unanticipated, demands for materials. In wartime, in addition to supplying essential needs of the populace and supplementing the strategic stocks of the armed Torces, they are to provide the means for some reconstruction of war-daroged facilities. As noted in Figurehe Reserve of the USSR Council of Ministers and the Undistributed Reserve (categories I. JJ.re essentially

-3-

opera ling reserves of theheld against contingencies that

overtax normal operating reserves held by enterprises and by the

industrial supply system. It fs possible to fc-easure changes in the

stocks of seme food commodities that bulk large in tho Stute

-Material Reserve category. Estimates oi" changes Tor grain, butter,

und sugar have been compiled for tlvoce years for which data, are and

. are shown in Table 1. As can be seen from tho data, reserve stocks of these foodstuffs are subject to considerable fluctuation.*

Strategic Material Reserves (categoryre known toomprehensive range of military goods including weapons, ammunition, tanks and vehicles, airplane parts, signal equipment, and fuel, together with supplies of rations, food, clothing, medical supplies, and engineering goods. ystem of territorial warehouses run by the Ministry of Defense and situated throughout the USSR exists for their storage. These stocks include the portion of military output that is not sent to operational units or held in normal military supply channels.

The Emergency and Hobllitalion Reserves (category II) of the armed forces constitute an Important part of the total stock of materials and equipment relevant to assessment of Soviet strategic

Although the basic motives for stockpiling grain in the USSR arc parallel to motives for stockpiling other commodities, grain stocksery highly charged and politically sensitive issue. Starchy staples such as grain arc the major source of food for the Soviet populace. Implanted by repealed crop failures and faminesRussianreoccupation with grain reserves is rooted deeply in the psyche of Soviet officials as well as consumers. In the USSR, where growing conditions arc marginal over vast areas of the grain belt and where crop failure isossibility, the ratter has overtones of serious political and strategicthat the Soviet leadership clearly desires to avoid.

potential , Although not included in the definition of State Reserves offered by Soviet military writers, some part of thergency and Mobiliration Reserves (as well as certain other equip* lacnt with operational military units or stored in military depots) may be entered together'with Strategic Material Reserve" in Soviet budgetary accounting.

FIGURE 1

Major Categories of Stockpiling in the USSR

for Use of Stocks

for Storat

Reserves

A. State Material Reserves

B. Reserve of USSR Council of Ministers

C- Undistributed Reserve

D. strategic Material Reserves

long-tern in character; backup for both peacetine and wartime requirements

Current reserve against contingencies in connection with ioplcsentation of annual plan

To cover military rc-quire-mcnts during period of conversion to waror,hort war, to assure necessary supplies and equipment to the armed forces

{

Council of Ministers

USSR Council of Ministers USSRSSR Gotsnab

Ministry of Defense

Main Administration for State Material Reserves has prisary responsibility; some part of stocks is held in normal supply channels but earmarked as State Reserves (the organ actually maintaining the stock acts as storage agent for the Council of Ministers and theAdministration for State Material Reserves)

Storage depots of the KJnistry of Defense; zone part of stocks is physically held together withState Material Reserves but is earmarked for the Ministry of Defense

andMobilisationof theorces

To ensure adequate supply of mobilization and deployment and to support operations during the initial phase of operations; also to pemit functioning cf armed forces in case of natural disaster, etc.

of Defense

stocks arc In hands of operational military units; mobilization stocks in norral military supply storage facilities

hi m

I

U Ui'

/: 1

3

Original document.

---

---