Hit*
Secret
CIA HISTORICAL REVF PROGRAM RELEAol AS SANITIZED
DIRECTORATE OF INTELLIGENCE
Intelligence Memorandum
Soviet Exports of Military Hardware to Eastern Europe
-Secret -
ERuly9
Copy No.
Foreword
This memorandum updates7 thecontained inethod of Estimating Soviet Exports of Weavons to Eastern Europe,ECRET,
Secret
CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence9
INTELLIGENCE MEMORANDUM
Soviet Exports of Military Hardware to Eastern Europe
Summary
oviet shipments of militaryto the East European countries* totaled an0 million0 million, only about three-fourths of the amount The apparent reasons for this decline are two. First, the equipment of East European forces with more modem weapons, begunas probably completed Second, East European production nowa larger share of the area's requirements for most types of militaryhipments of military hardware to Czechoslovakia probably were cut back after the Soviet invasion of Czechoslovakia inut there is no reason to believe that the invasion affected shipments to other East European countriesexcept perhaps to Romania, which opposed the Soviet action.
Estimates of Soviet shipments of militaryto Eastern Europe are calculated from the un-iteisized residuals in Soviet exports to these
* This group of countries inoludea Bulgaria, Czechoalovakia, Bast Germany, Bungary, Poland, and Romania and is referred to in the remainder of the memorandum ae the Boat European countries or Eastern Europe. Estimates of Soviet shipments of military hardware to Jugoslavia are included in the tables.
Note: This memorandum was produced solely by CIA. It was prepared by the Office of Economic Research and was coordinated with the Office of Strategic Research.
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countries. Analysis of Soviet trade statistics strongly indicates that shipments of military equipment account for the greater part of these uniteraized residuals. Research done on East European trade statistics corroborates this
Estimated imports of military equipment per man under arms strikingly illustrate the enormousbetween the equipment of the armed forces in the "northern tier" and in the southern countries, especially Bulgaria and Romania. The latter depend largely on imports for basic military equipment, but they import the least relative to the size of their armed forces. (For estimated imports of militaryper member of the armed forcesee the chart.) East Germany and Hungary, which produce
considerable military equipment, also import large amounts. East German imports, relative to the size of the armed forces, are the largest in the area, probably because they include both basic and highly sophisticated equipment, and Czechoslovakia and Poland, which are known to produce most of their own basic equipment, nevertheless import substantial amounts per man, probably consisting largely of sophisticated hardware.
Introduction
explained in an earlier, most of the residual inof exports to Eastern Europe isrepresent'Shipments of military hardware. used in that paper to estimate Sovietof military end items to Eastern Europebelieved to be valid. This method is based
on the analysis of official Soviet figures for total exports to East European countries. The analysis leads to the conclusion chat the totals include military shipments and that such shipments account
for the greater part of the discrepancy, or residual, between the figure for total Soviet exportsiven country and the sum of all exports itemized for that country. If this conclusion is correct* the residual represents an outside limit for the value of military shipments. However, the residual alsoa few nonmilitary items in amounts believed to be small. To obtain tho estimates of total military shipments, therefore, amounts equalangeercent of total Soviet exports to each country have been deducted from the respective residuals as an allowance for nonmilitary shipments.
in Soviet exports havefor at leastercent of Sovietthe individual East European countries. research aid concluded that residualssize almost certainly could not beby unlisted goods under ordinary The listing of Soviet exports tocountries appears to be quitesupporting the conclusion that the residualexports to Eastern Europe containsis the wide fluctuations in theseboth in absolute terms andercentage
of exports* These fluctuations cannot bo attributed to changes in the listing of specific categories. Furthermore, it is highly unlikely that changes in unlisted commercial trade werearge enough magnitude to explain the fluctuations.
3- As pointed out in the earlier research aid, trade statistics published by Poland, East Germany, and Yugoslavia corroborate the use of the residual in Soviet reporting on exports to these countries to determine Soviet shipments of military equipment. Further research on the trade statistics of the
above-mentioned countries and of Bulgaria,Hungary, and Romania supports, for the most part, the original methodology for determining Soviet exports of military hardware to Eastern Europe* In the case of Poland, however, theof military equipment from the USSRay be too high* Most of the East European trade data studied were not available at the tine of the earlier research aid. etailed examination of the import statistics of the East European countries with respect to theof military hardware*
Recent Developments in East European Imports of MTlitary Hardware
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4. oviet shipments of militaryto Eastern Europe totaled an0 million2 million (see Thesedecreased sharply4eriod of rapid growth which began (For an index of estimated Soviet exports of military hardware to Eastern Europe, see the chart,)
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Among the po&sible reasons for the declines that by substantially increasing importsost of the East European countries had built up their stock of advanced militaryto planned levels and needed to import for the most part only replacements and spare parts. possible reason was the greater reliance of the East European countries on the increasingof military hardware in the area.
nough information on actual deliveries of Soviet military hardware was available foreriod to show that the Soviet exoorc residuals roughly followed these deliveries. There has not been enough information on actual deliveries4 to validate the decline in military shipments inferred from the residuals.
Soviet shipments of military hardware to Hungary/ Czechoslovakia, Romania, and Bulgariasharply4 On the other hand, shipments to East Germany declined only slightly and those to Poland rose soncwhat. hare Of total Soviet exports to Eastern Europe dropped from aboutercent4 toercent ontainsdata used in preparing the estimates of Soviet shipments, which were derived from data in the Soviet foreign trade yearbooks.
Until the Soviet trade statistics8 are availableprobably latehore will be no direct evidence as to what happened to Soviet shipments of military hardware to Eastern Europe However, since the Czech army has been discredited, and even cut back, Sovietof military and items to Czechoslovakiahave been reduced. The Soviets also may have cut such shipments to Romania because of the latter's opposition to the Soviet invasion of Czechoslovakia. There is no reason to suppose that the invasion had any effect on exports to the other East European
countries.
addition to importing militarythe USSR the East European countriesin military hardware among themselves. largest shippers, Poland anddetailed enough trade statistics toestimate of their trade in military hardware with
r-r*
Eastern Europe (seehis totaled an0 million0 million.
Table 2
Polish and Czech Trade in Military Hardware with Eastern Europe7
Million US $
W
2/
d/
Germany
ercent of total exports and imports from the trade residuals.
b. Based on Polish data, unless otherwise
a. Based on Czechoslovak data.
d. Based on Czechoslovak data. Polish statistics wouldange ofillion The reason for the discrepancy is unknown.
Imports of Military Hardware in Relation to Military Expenditures
9. The northern countries of Eastern Europe have much better equipped armed forces than do the southern countries. Bulgaria and Romania/ which produce little military equipment, also import relatively little equipment because of the low
degree of mechanization of thoir armed forces. Estimated imports of military equipment per man for East Germany are considerably higher than for Poland and Czechoslovakia, as indicated in the following tabulation:
Bulgaria
Germany
b/
Data have been rounded to
nearest SO.
In addition.
had
imports -- an0 per member of the armed foroee rom East Germany and Hungary.
All three countries have highly mechanized forces, but Poland and Czechoslovakia produce much more of their own equipment than East Germany. Thearmed forces are considerably less mechanized than those of the northern countries but, since Hungary produces little military equipment, it imports about the same amount per man as Poland and.
What is known of the defense industries in Eastern Europe and of tha armament of the East European forces leads to the expectation that imports of military hardwarehare of total military expenditures would be higher for Bulgaria, East Germany, Hungary, and Romania than forand Poland. East Germany might be expected toery high share because, although it has considerable defense production, its armed forces are armed with some highly sophisticated weapons.
A look at the computed shares of imports in military expenditureswith imports converted into domestic currency at the commercial exchange rategives reasonable results for the most part (see It appears, however, that the
relative share of Romania is too low and that of Czechoslovakia ia too high. Comparison of imports of military hardware with total militaryis difficult. For the purposes of this memorandum, imports have been converted into the domestic currencies of the individual East European countries by using both the commercial andexchange rates for the ruble, andbudgets are used as the measure of defense expenditures. What is known of the relativeon imports suggests that the ranking is illogical when tho noncommercial rate is usod.* In actual practice, of course, some of thc East European countries may convert imports of military hardware at the commercial rate, whereas others may convert at the noncommercial rate.
12. Another difficulty in comparing imports of military hardware with military expenditures ia that the military budgets vary in coverage. Some or all of the countries may omit some defense expenditures from the published budgets. Some of the countries also may exclude part or all of the value of imported equipment from the statistics shown in the budget. In addition. East German and Czech budgeted expenditures on defense are estimated, the former because nofigures were available for earlier years and the latter because expenditures on security are included in the published data. It is not known whether the Romanians include expenditures on security forces under budgeted expenditures on defense. If they do, the share of imports in military expenditures may be somewhat higher than shown in Table 3.
11 The noncommercial ruble exchange rate forand East Germany ie lower than the commercial rate, whereas it ia higher for the other countries.
Estimated East European Imports of Military Hardware from the USSRercentage of Announced East European Military Expenditures a/ Annual7
Percent
Using the Exchange Rate for
Germany
Imports were aonverttd into domestic currencies using the official commercial and noncommercial exchange rates for the ruble. Bast German and Cxeoh data cn military expenditures ar* estimated. The Czech statistics have been reduced toan eetimate excluding expenditures on security. The East Germane have only published realietio data on budgetto defense Theee data include expenditures on personnel and most military hardware. The earlier eerieo of estimates made by this Offioe have been oontinued andto the present, however, because they are believed to be more complete than the official Bast German statistics.
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APPENDIX A
Statistical Evidence from the Import Statistics of Soviet Trade Partners
The East European countries vary in theirof imports of military hardware from the USSR, East Germany at leastndhavo excluded these imports altogether from their trade data. Bulgaria, Hungary, Poland, and Romania apparently include receipts of military end items under imports of machinery and equipment. Czechoslovakia apparently did alsohen such imports appear to have been switched to the metals category.
East Germany and Yugoslavia
4 concluded that the differences in East German and Yugoslav imports from the USSR as reported by these countries and as reported by the USSR were of the same general order of magnitude as the estimated Soviet exports of militarybased on the residual method- This, then, served as further corroboration of the use of the residual method. omparison of East German and Soviet reporting on total Soviet exports to East Germany67 indicates, however, that the East Germans now include imports of military hardware in their reporting- In those two years the difference between the two sets of reporting averagedear, whereas the estimates of Soviet shipments of military hardware to East Germany1 million0 The Yugoslavs apparently still exclude these shipments from their reporting.
Poland
Research done since the referenced research aid was completed supports, for the most part, the original methodology for determining Soviet exports of military hardware to Eastern Europe. Further study of Polish trade data indicates that theof imports of military end items from the USSR are too high* but are of the right order
* Itemized Polish reporting on foreign trade did not begin until
of magnitude. This conclusion is based on an examination of the residual in Polish reporting on imports of machinery and equipment from all sources and on the difference between Polish and Soviet reporting on deliveries to Polandf machinery and equipment from the USSR.
Analysis of Polish trade daca indicates that the Poles include practically all imports ofend items under the total given for machinery and equipment imports. The unicemized residual in Polish reporting on total imports of machinery and equipment has been sizable, ranging betweenndercent of total imports of machinery and or example, Polish imports of machinery and equipment amounted5 million and the unitemized residualillion, which should be the upper limir on imports ofend items from all sources and should include aseasonable residual for unitemizedother than military end items. According to the estimates based on Soviet reporting, the USSR alone accountedillionillion of shipments of military end items to Poland in that year. omparison of the data for theives similar results. 1 and later years, on the other hand, the residual on Polish machinery imports is considerably higher than the range of estimates derived from the unitemized residual in total Soviet exports to Poland. or example, total imports of machinery and equipment4 million and the residual came4 million, which is large enough to include estimated imports of machinery end items from theillion7 million) and from other East European2 millions welleasonable unexplained residual.
The belief that the estimates for thc years0 are of the right order of magnitude is borne outomparison of Polish figures on total importsf machinery and equipment from theith Soviet figures on total exports
See CIA p. 4.
** These figures are new. Previously the Poles have given imports of machinery and equipment from the USSR only by individual items and have given no total for suoh imports.
of machinery and equipment to Poland. Theare close to previous estimates of Soviet shipments of military end items, as shown in the following tabulation.
Million US S
7
260
294
144
150
327
Polish reporting on total imports of machinery andfrom the USSR
Soviet reporting on total exports of machinery andto Poland
Difference
Estimates of Soviet shipments of military end items to Poland a/
Based on the method of subtracting from the reoidual in Soviet reporting 1 toercent cf total Soviet exports.
Another discrepancy between Polish and Soviet reporting on Soviet exports tc Poland cannot beon the basis of information now available.oviet reporting showed larger total exports to Poland than did Polishear on the average. 58 million, which indicates thatin that year the Poles did not include imports of military hardwarewhich totaled anillion4 million from the Soviet Unionin their reporting. he difference was also very large and presumably could have covered imports of military hardware. In every yoar5 the difference was too low to allow thethat the Poles excluded all imports ofhardware, but they may have excluded certain categories of such imports. If so, the estimates based on the Soviet residualay not be too high. Otherwise, the difference cannot be fully explained. mall part results from different
USSR7illion1 million, values that could easily be included in thedifference in the metals category.
Romania
Romanian data on total imports of machinery and equipment appear to include military hardware. The Romanians do not break out such imports by country. The reporting of partner countries on exports of machinery and equipment to Romania adds up to less than total Romanian imports of machinery and equipment. or example, imports of machinery and equipment from the USSR, Czechoslovakia andungary, and non-Communist countries accounted for less than four-fifths of total imports of machinery and equipment. Imports of machinery and equipment from other Communist countries could have accounted for only about another one-twelfth. Thus about one-seventhor8 million worthof Romanian imports of machinery andare not accounted for. These probably include imports of military hardware, which amounted to an estimated minimumillionillion
Bulgaria
Bulgaria apparently also includes imports of military equipment under the machinery and equipment category. he difference between total imports of machinery and equipment, as reported by the Bulgarians, and imports by country, as reported by the partners, was anillionillion.** Bulgarian imports of militaryfrom the USSR, Poland, and Czechoslovakia came to anillionillion.
Hungary
The use of the Soviet residual in estimating exports of military hardware is further substantiated
*"* Importe of machinery and equipment fromand Poland were calculated from itemized data. Total imports may have been somewhatnot muchigher- Imports from non-Communist countries include imports from Yugoslavia. ** Bulgarian importe of machinery and equipment from East Germany and Romania were estimated.
by Hungarian trade data. The residual in Hungarian imports of machinery and equipment from Communist countries generally has been more than enough to include imports of military hardware. or example, Hungarian imports of machinery and equipment from the USSR, Czechoslovakia, and Polandas reported by these countriesforercent of such imports from Communist countries. Other Communist countries provided an estimatedoercent of theseesidualillionillion. Estimated Soviet shipments of military hardware to Hungary6illionillion. Similar results were obtained using the same type of data
The estimateillionillion for Soviet shipmentsmilitary hardware to Hungary5 appears, however, to be too high. Hungarian reporting on total imports of machinery and equipment from the USSRhe only year for which this information isigure ofillion higher than does Soviet reporting.
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