Created: 7/1/1969

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Intelligence Memorandum

Soviet Exports of Military Hardware to Eastern Europe




Copy No. JO


This memorandum updates7 thecontained inethod of Betimattng Soviet Exports of Weapons to Eaetern Europe,ECRET/

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CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence9


Soviet Exports of Military Hardware to Eastern Europe


oviet shipments of military hard--ware to 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 modern weapons, begunas probably completed Second, Bast European production nowa larger share of the area's requirements for most types of military equipment. Shipments 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 theresiduals in Soviet exports to these

* Thie group of countries includes Bulgaria, Czechoslovakia* Bast Germany, Hungary, Poland, and Romania and ie referred to in the remainder of the memorandum ae the Baat European countries or Baetern Europe. Eetimatee of Soviet shipments of military hardware to Yugoslavia are included in the tables.

Note: This memorandum was produced eolely by CIA. It was prepared by the Office of Eaonomio Research and wae coordinated with the Offiae of Strategic Research.

countries. Analysis of Soviet trade

strongly indicates that shipments of

equipment account for the greater part of these unitemized residuals. Research done on Bast European trade statistics corroborates this

Estimated imports of military equipment perarms strikingly illustrate the enormousbetween the equipment of the armedthe "northern tier" and in the southernBulgaria and Romania. The latteron imports for basic military equipment,import the least relative to the size offorces. (For estimated imports of military

ware per 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.



As oxplainod in an earlier research aid, most of the residual in Soviet reporting of exports to Eastern Europe is believed to represent shipments of military hardware. The method used in that paper to estimate Sovietof military end items to Eastern Europe is still believed 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 that 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 concluaion is correct, the residual repreaanta an outside limit for the value of military shipments. However, the residual alsoa few nonmilitary items in amounts believed to be small. To obtain the 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.

Residuals in Soviet exports have generally accounted for at leastercent of Soviet exports to the individual East European countries. The earlier research aid concluded that residuals of this size almost certainly could not be accounted for by unlisted goods under ordinary commercial trade. The listing of Soviet exports to East European countries appears to be quite comprehensive. Also supporting the conclusion that the residual in Soviet exports to Eastern Europe contains military hardware is the wide fluctuations in theseboth in absolute terms andercentage

of exports. These fluctuations cannot be attributed to changes in the listing of specific categories. Furthermore, it ia highly unlikely that changes in unlisted commercial trade werearge enough magnitude to explain the fluctuations.

pointed out in the earlier researchstatistics published by Poland, EastYugoslavia corroborate the use of theSoviet reporting on exports to these countriesSoviot shipments of militaryresearch 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 time 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 Military Hardware


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 possible reasons for tho declines that by substantially increasing importsost of theuropean 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 tho area.

information on actual deliveriesmilitary hardware was available for theperiod to show that the Soviet exportfollowed these deliveries- There hasenough information on actual deliveriesto validate the decline in militaryfrom 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 somewhat. Military hard-arehare of total Soviot 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 latehere will be no direct evidence as to what happened to Soviet shipments of military hardware to Eastern Europe However, since the Czech array has been discredited, and even cut back, Sovietof military ond items to Czechoslovakiahave boor, reduced. The Soviets also may have cut such shipments to Romania because of the letter'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.

In addition to importing military hardware from tho USSR the East European countries also trade in military hardware among themselves. Only thc largest shippers, Poland and Czechoslovakia, provide detailed enough trade statistics to permit an estimate of their trade in military hardware with


Eastern Europe (seehis totaled an0 million0 million.

Table 2


Polish and Czech Trade in Military Hardware with Eastern Europe a/

Million PS $

Polish Trade W Czech Trade

Exports Imoorts Exports Imports




The estimated ranges were obtained byercent of total exports and imports from the trade residuals.

b. Based on Polish data, unless otherwise

d. Based on Czechoslovak

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 their 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:




a-Data have been rounded to the nearest

b. In addition, Poland had sizable importen0 per member of the armed forces from East Germany and Hungary.

All three countries have highly mechanizod forces, out Poland and Czechoslovakia produce much more of their own equipment than East Germany. Thoarmed forces are considerably less mechanized tnan thoee of the northern countries but, since Hungary produces little military equipment, it imports about the same amount per man as Poland and Czechoslovakia.

is known of the defense industriesEurope and of tha armament of theforces leads to the expectationof military hardwarehare ofexpenditures would be higher forGermany, Hungary, and Romania than for Czecho-

.Ea8tmi9ht expected

toery high share because, although it has

considerable defense production, its armed forces

are armed with some highly sophisticated weapons.

look at the computed shares of imports

in military expenditureswith imports converted

into domestic currency at tho commercial exchange

t easonablo results for the most part (see it appears, however, that the

relative share of Romania is too low and that of Czechoslovakia is too high. Comparison of imports of military hardware with total militaryis difficult. For the purposes of this memorandum, imports havo 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 the noncommercial rate is used.* In actual practice, of course, some of the 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 is that the military budgets vary in coverage. Some or all of the countries may omit some defense expenditures from the published budgets. Some of tho 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 includod 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 somowhat higher than shown in Table 3.

* The noncommercial ruble exchange rate forand East Germany is lower than the commercial rate, whereas it is higher for the other aountriee.



Table 3

Estimated East European Imports of Military Hardware from the USSRercentage of Announced East European Military Expenditures a/ Annual


Using thc Exchange Rate for



Imports were converted into domeetva ourrenaiee using the official commercial and noncommercial exchange rates for the ruble. East German and Czech data on military expenditures are estimated. The Czech statistics have been reduced toan estimate excluding expenditures on security. The East Germans have only published realistic data on budgetto defenee These data include expenditures on personnel and most military hardware. The earlier series of estimates made by this Offioe have beenndto the present, however, because they are believed to be more complete than the official Bast German statistics.

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 Germanyat leastndhave 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 Soviot exports of militarybased on the residual method. This, then, served as further corroboration of the use of the residual method. omparison of East Gorman and Soviet reporting on total Soviet exports toermany67 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.


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

Itemised 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 data indicatesPoles include practically all imports ofend items under the total given forequipment imports. The unitemized residualreporting on total imports of machineryhas been sizable, rangingercent of total imports of machinery and orolish importsand equipment amountedhe unitemized residualshould be the upper limic on imports ofend items from all sources andeasonable residual for unitemizedother than military end items- Accordingestimates based on Soviet reporting, theaccountedillionillion ofof military end items to Poland in omparison of the data for the yearsgives similar results. 1 and laterthe other hand, the residual on Polishis considerably higher than the rangederived from the unitemized residualSoviet exports to Poland. total imports of machineryillion and the residual came towhich is large enough to includeof machinery end items from the7 million) and from otherillions well asunexplained

The belief that the estimates for the 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 p. A 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 co Poland. Theare close to previous estimates of Soviet shipments of military end items, as shown in the following tabulation.

Million US S

Polish reportingimpoxtsandfrom the

Soviet reportingexportsandto

Estimates of Soviet shipments of military

ond items to Poland a/

Baaed on the method of subtracting from the residual in Sovietercent cf total Soviet exports.

Another discrepancy between Polish and Soviet reporting on Soviet exports to Poland cannot beon the basis of information now available., Soviet reporting showed larger total exports to Poland than did Polishear on the average. 58 million, which indicates that par-haps in 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 year5 the difference was too low to allow thethat the Poles excluded all imports ofhardware, but thay may have excluded certain categories of such impocts. If so, the estimates based on the Soviet residualay not bo too high. Otherwise, the difference cannot be fully explained. mall part results from different

reporting of individual commodities. For example, Poland reports considerably smaller imports of nonferrous metals and coal than the USSR reports as exports. Soviet and Polish reporting-on Soviet imports from Polandre in fairly close agreement.


The difference between Czech and Soviet data on total Czech imports of machinery and equipment from the USSRhe only years for which these figures are available (see the following tabulation)also supports the use ofercent allowance.

Million US S

Czech reporting on total imports of machinery and equipment from the USSR

Soviet reporting on total exports of machinery and equipment to Czechoslovakia


Estimates of Soviet shipments of military end items to Czechoslovakia a/

a". Based on the method of subtractingthe reoidual in Soviet reporting 1 toercent of total Soviet exports.

It appears that7 the Czechs switched their imports of military hardware from the USSR to the metal ores and metal products category. Czech reportingigure2 million higher than Soviet reporting for this category. 6 this difference wasillion. The Soviet figures are taken from itemized data but probably include most exports under this category. Czech imports of military hardware from the

USSR7illion1 million, values that could easily be included in thedifference in the metals category.


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 countriea 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 apparently also includes imports of military equipment under the machinery and equipment category. 7 the 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.


The use of the Soviet residual in estimating exports of military hardware is further substantiated

A 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 imports 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 shipments of military 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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