Intelligence Memorandum
USSR: Recent Developments in Plant and Equipment Purchases in the West
cia historical review program release in8
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INTELLIGENCE MEMORANDUM
USSR: Recent Developments in Plant and Equipment Purchases in the West
Summary
Soviet orders for plant and equipment from the developed West* have continued the high level reachedhen tho large Fiat deal was Orders placed in the three-yearxceeded S2 billion, roughly equal to the total of the seven previous years. Deliveries of machinery and equipment also reflected this rise,0 million7 and an0 million These imports from the West are expected to continue if the Sovietposition permits, but the USSR may increase imports of technical data at the expense of
Soviet orders over the years haveew major categories of goods, and the largest amounts have been supplied by asmall number of Western countries. he major recipients of contracts, by value, have been Italy, France, and tho United Kingdom. The major catogories have been automotive production equipment, chemical and petrochemical equipment, ships, and timber and wood processing equipment. These last three years, however, have alsoise in imports of plant and equipment for consumer industries.
Including those oountriee of the developed tfeet from which the USSR hae ordered plant and equipment during - Austria, enmark, Prance, Italy, Japan, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, the United States, and West Germany. Finland, whiah iearter baeie, has been excluded.
Note: Thia memorandum wae produced solely by CIA. It wae prepared by the Office of Eoonomio Research.
orders of whole plants andfrom the developed Wost totaledontinuation of theroached6 when the large Fiatsigned. Soviet orders from the West haddrastically,eriescrops had forced the Soviet Union toquantities of wheat from hard currency During this period, orders of plantsWast declined from5 millionillion The high level8 coincidederiod ofSoviet imports of grain. Tokonillion in orders placed inas rouqhly equal to theof orders placed in the previous
decline in Soviet orders4 and
response to the worseningubsequent decline in imports machinery and equipment from the West. in imports lagged behind theear or more, reflecting thelag between order and delivery. As awhich had been averaging, fell to. With the improvement in theposition and tha resurgence in orders in
the predictable rise in imports occurred in
reaching0 million. The continued high level of ordersnd the continued deliveries from the exceptionally large orders in
expected to bring deliveries to aboutmillion level for at8
Contracts and Countries
orders for plant and equipmentfollowed the pattern of previousconcentrationew major categories. The
Some contracts for uhlah no valuo figures are available are reported each ynat*. Normally the value of orders reported till he lieu than actual deliveries.
volume of chemical and petrochemical equipment contracted for has been consistently high since the beginnings of the Soviet purchasing program9 and has remained so in the last three yearsThese contracts generally have stressed equipment for the manufacture of plastics and synthetics, fertilizer, and agricultural chemicals. Thesingle category of orders, however, was for passenger car production facilities3 million.
Ships and marine equipment have accountedubstantial share of ordersumber of yearsin some years representing about half of the total- The types of ships ordered havetankers, general cargo ships, and special-purpose vessels. Well over half the value ofsigned for shipships and their special equipment, most of which are for the Soviet fishing fleet,
Of contracts in the timber and woodcategory, the single contract igned with Japan8 for equipment to exploit Siberian timber resources overshadows the others. Its value is placed3 million. This contract features equipment for logging and developing logging facilities, but earlier contracts in this category were largely for the processing of wood into paper and other products.
Plant and equipment for consumer industries have accountedarger share of ordershan previously. Contracts for food-processing and textile-manufacturing plants and equipment alone were valued at0 million, and there haveeries of contracts in this period for plants to produce such consumer-oriented items as footwear, home refrigerators, ballpoint pens,lant to produce color televisiontubes- The increase in consumer-oriented industries is in keeping with the expanding imports of consumer products from the West in the last three yearfe. ives details of the various categories of orders.
The countries most favored withave been Italy, Prance, and the United Kingdom, in that order. Italy has provided
ECRET
USSR: Value of Orders for Plant and Cquipnent from the Developed West, by Category
Million US S
Total
7 8
Total
135
vehicle
b/
and
and marine
and wood
manufac-
processing
and
refining and
equip-
c/
Excluding Finland, which is arter baoie. Because of rounding, component* may not add to tha totalo shown.
b. lant valuedillion, rubber products. The plantbe subsumed under the category,
a. ide variety of plants and equipment with consumer orientationor example, for production of footwear, home and ballpoint pens. The category also includes printing equipment, telephone equipment, medical equipment, and special trucks.
the largest totalmore0 millionthe Plat deal, alone, accounting for more than two-thirds
of tho value. 7owever, Italy ranked only third among Western suppliers to the USSR. Franco hasajor supplier of capital goods to the USSR in recent years, and has been second overall, with0 Most French sales67 were for automotive production facilities andplants. owever, France obtained the major share of Soviet orders for ships, securing contracts forefrigerator shipsillion. France also securod substantial Soviet orders for chemical plants Contracts signed with the United Kingdom fell off sharplyropping from0 million7 toillion Contracts signed with tha United Kingdom have been more varied and havearge volume of machine tools as well as metallurgical equipment and textile plants.
major Free World suppliers haveSweden, and West Germany. Beforewas favored with relatively fowbut8 the USSR3 millionwith Japan for the supply of equipment toand exploit Siberian timberlands. teady, though relatively small,plant and equipment to the USSR int secured moreillion worthfor ships, large contracts forequipment, and other contracts,doubling the level Westnot received ashare of Sovietin recent years as in thes.
West German contractsixed bag of plants and equipment. hows Soviet purchases from tho West, by country,.
Prospects
resurgence in orders from6 has come about largely becauso
of the improvement in the Soviet hard currencyposition. Substantial deficits had broughtharp decline in orders of Western plant and equipment3 The high level of orders placed since the end5 cloarly indicates that tho current Soviet regime is pursuing tho same path as Khrushchev inWestern capital goods to help modernize tho
Soviot economy. The present leadership hashowever, that it will not deplete its gold reservess did Khrushchevto buy from the Wost. Indeed, in the past three years the USSR has succeeded in adding an0 million to its gold reservesecade-long drain which had reduced the Soviet reserves by two-thirds.
10. The level of Soviet imports from the West will continue to depend on the Soviet payments position. ajor crop disaster entailing large imports of wheat from the West, the USSR will continue to import Western technology and equipment to upgrade Soviet industry. It is uncertain,whether the high level of orders will be maintained. The USSR hasesire to increase imports of technical data, and this may resultecline in imports of equipment.
Table 2
USSR: Value of Orders for Plant and Equipment from the Developed West, by Country
Million US $
Total
7 8
Total
I 3$
Kingdom
Germany
5
b/
Finland, which iaarter baeie. Because of rounding, components may not add to the totals shown.
b. Including contracts with Austria, Belgium, Denmark, the Netherlands, Norway, Switzerland, and the United States and,oontraot chared among Belgium, Franoe, and Italy.
Original document.
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