directorate of intelligence
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Intelligence Memorandum
The Price of Strength: Broader Soviet Force Goals Driving Up Defense Spending
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CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence8
INTELLIGENCE MEMORANDUM
The Price of Strength: Broader Soviet Force Goals Driving Up Defense Spending
Summary
The USSR appears to be moving toward the creationigher level of resource commitments in every major component of its armed forces. The dominant view among the current Soviet leaders is that the USSR shouldroader spectrum of military capabilities than are now at hand and that the resources must be made available to achieve them.
or the third yearow, the rise in Soviet outlays for national security programs will probably equal or exceed the rate of growth in the economy. Increases67 had already swelled defense spending by an amount greater than the increases for the entire eight8
The pace and number of concurrent programs have altered the expenditure trends of past years. From the end of the Korean Warhe costs of acquiring new strategic capabilities were moderated by economies in the ground forces and by alternating the emphasis on new strategic systems to avoid expenditure peaks in several major programs at the same time. time had run out on the Soviets in their efforts to hold defense costs down by these means. (See Figure 1, next page.)
This memorandum was produced solely by CIA. It was prepared by the Office of Strategic Research and coordinated oith the Offices of CurrentEconomic Research, and national Estimates.
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USSR: ESTIMATED DEFENSE AND SPACE EXPENDITURE TRENDS AND UNDERLYING
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Initially, tho upturn in defense spending was related to improvements in the Soviet deterrent. More recently, Soviet leaders appear to havethat forces optimized for deterrence may not be tha most effective instruments of foreign policy under present conditions and to bcthe role and structure of the theater forces
Present programs will influence future as well as current spending levels. New weapons systems are now in resoarch and development that will provide added strategic options fors. Deployment programs now under way in the strategic and theator forces will establish new force levels and higher oporating and maintenance requirements for the future. Forces along the China border, are being strengthened, and Soviet commitments to supply arms abroad have gone up. In combination, these developments are driving Soviet defense spending toward higher levels.
Qualitative changes in the OS forces during tho next few yoars will--in the absence of arms limitingto put pressure on tho USSR to undertake costly improvements that will tond to keep military investmentigh level.
The need for additional dofenso measures seems to bo generally accepted by the current leadership. Tlie consensus is shakier, however, on the subordinate issue of which alternative national objectives to slight to pay for the rising defense costs. By favoring defense and the consumer at the expense of investment, tho Soviets are risking another slowdown in economic growth.. Some Soviet leaders recognize this. As higher military costs are translated into curtailments and postponements in other favored programs, they will continue to supply fuel to Kremlin controversy.
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Fixed Commitments and Spending Levels
Each year, Soviet military budgets are formed in an environment in which many matters of central importance as well as the allocation of most expenditures have been determined by past decisions. Soviet forces in being require large and unavoidable expenditures. Weapons deployment programs under way and new weapons well along in their development cycle represent commitments that are not easy to alteringle budget year.* The balancing of military needs against established investment andgoals and the difficulty of transferring resources from one to another of these uses also limit decision makers in the short run.
trongly innovative and resolute militaryas concurrent pursuit of several urgent objectives or agreement on armsfreedom of decision makers tochange the allocation of resources in the immediate year ahead is constrained.
Over the longer historical period, however, tho size and cost of Soviet military forces have shifted significantly as fundamental changes have occurred in economic strength, military technology, and world affairs, and as alternative national policies and strategies have evolved andhas changed. (Seepposite page.)
Some of these developments--for example, the curtailment of the Soviet ground forces inradual andumber of years for their full budgetary effect to be felt. Others, such as the costs of the military andffort, have exhibited steady growth over tho long term and may continue to do so.
Still othor programs, particularly those involving the procurement and deployment of new strategic weapons, are individually cyclical in nature. These have at times coincided in their effect and have caused marked inflection points
Soviet force levels underlying the historical cost trends discussed in this paper are those reflected in agreed national inte lligence.
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USSR: EXPENDITURES FOR STRATEGIC FORCES BY KEY
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in Soviet military spending. At other times they have tended to be offsetting and to contribute to greater stability in year-to-year trends.
Trends in Military Resources
the end of the Korean War untillong-term trend in total expenditureshas been one of only moderate growth.
In fact, the percentage of the gross national product allocated to defense actually declined. This trend coincided with Khrushchev's program to change the Soviet military establishmentrimarily conventional force to one which more fully encompassed the new military technology of missiles and nuclear weapons.
The ability of the USSR to accomplish this while holding growth in total defense spending to quite modest rates isesult of movingigh ofillion men under arms2teady level ofillion1 Fromyear of minimum defense outlays inefense and space expenditures grew at an average rate ofear while the economy grew atear.
From the viewpoint of the political leaders durings, the acquisition of better ground force weapons permitted enough gains inand improved firepower to allow net economies in the ground forces through troop reductions. The offect of tho large increases in resources required for the strategic missions was thereby dampened, first by the reductions and0 by stability in ground forces costs. esult the ground force share of total Soviet: military outlays dropped greatly. (Seen page four.)
The relatively small number of attractive strategic weapons options open to the USSR at any one time also created the tendency for new weapons systems to be phased in successive waves, thereby minimizing the coincidence in expenditure peaks for investment in major deployment programs. (See Figurepposite page.) in the strategic attack mission, for example, there were three clear waves of deployment. The first included the largebomber programs. This was followed by the concentrated effort on medium- and
ussri; research and development and procurement;'for advancednd Space
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intermediate-range missiles,arked reduction in the construction of manned bombers. Finally,eployment programs for intercontinental missiles have exercised the major influence on Soviet expenditures for strategic attack.
An exception to the compensatingof expenditures for major programs occurred In thatarge bomber deployment program coincided with continued heavyfor air defense fighters and new surface-to-air missiles at the same time that economies at the expense of the ground forces werehalted. Total military spending increasedercent rise.
Theas one of retrenchment in military spending. Cuts in outlays for ground forces were resumed, and no further growth occurred in the aggregate level of procurement andof new strategic systems. The only major contributor to spending that was increasing strongly in this period was military and space research and development. Costsnd space were still
elatively low level, however, and consequently did not offset the economizing trends occurring elsewhere in defense spending.
A period of steady, although still modest, growth in total defense sponding began8 and continued During this periodin strategic attack systems climbed rapidly, and the growing weight of the burden of military and space research and development programs began toominant influence. Relatively stable programs in strategic defense and further slight reductions in the costs for the general purpose forces, however, did much to moderate growth in total expenditures during this period.
The ability to offset increased costs of deploying new weapons by manpower reductionsceasednd the tendency since then has been for costs of operating and maintaining the forces intheir newteady contributor to increased military costs. Under present conditions the prospects that this trend will be reversed appear to be slight. (See Figure 5, opposite page.)
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who was committed to aprogram of economic development, was bankolicy of deterrence based onmissiles. He was able toeduction in the flow ofbeing spent on the general purposewhile modernizing them, and this viewpoint
did not require him to attempt to match the US buildup of strategic forces.
this policy moderatedin military expenditures, itamong his strategists. Thesebecame restive about the strategicthey did notredible capability
touclear war (andnd foresaw that
the next war might not starturprise nuclear attack.
Khrushchev's last years of influence beginning3 usherederiod of stability in defense outlays which carried over under his successors For the first time in recent Soviet history, outlays for the strategic missions suffered significantto aboutercent over the three-year period.
Most of the reductions were possible largely becauserop in the deployment of strategic missile systems after the MRBM and IRBM deployment was completed. The paco ofof surface-to-air missiles also slowed markedly in this period. The reduced spending for new strategic systemsas, however, offset by the increases in military and space research and development. Other major categories of spending showed little change.
Military Demands on Industry
lthough military spending overall showed only modest growth undereavy drain was imposed on those resources urgently needed for economic growth.
rowth was particularly rapid infor advanced military hardware and forand, which drained resources from
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the industrial investment program and hampered Khrushchev's efforts to improve technology in civilian industry- (Saon page eight.)
resource requirementsprecision machine building, electronics,metallurgy, and the related productionpersonnel in those fields.
the boss of Soviet defensehad warned Soviet planners that the demands of military programs would be intense in these areas.
since availableto meet all needs, expansion andof the civilian industrial plant This, in turn, intensifiedrevamp the Soviet planning structure andthe economy was managed.
After Khrushchev
The heightened military priority under the present leaders reversed the decline ofexpenditures expressedhare of gross national product. Initially this trend resulted from efforts to improve the Soviet deterrent. More recently, Soviet concern has broadened to encompass the complex possibilities of theof some local war that impinges on the interests of both major powers.
The Soviet leaders have apparently reappraised the strategic environment and US-Soviet relationships, concluding that further steps toward detente are not in immediate prospect and that an improved military posture is required during the present period of international crisis and tension.
24. They seem to feel that the United states has displayed an increasing willingness toinitiatives that tho USSR must be prepared to counter, and that the USSR must have the wherewithal to support initiatives of its own. They beliove that the Soviet Union must improve its military capabilities in ways that willthe freedom of action of the United States and gave the USSR greater influence in the international arena.
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The present period of dynamic growth in military outlays began with the resumption6 of major new deployment programs in both the strategic attack and strategic defense missions. Expenditures for ICBM's7 were double the level5 and expenditures for SAM and ABM programs rose by aboutercent. Intotal outlays for the strategic missions added moreillion rubles to the defense budget during this period. Although the rate of growth of RSD and space costs slowed somewhat from the very high rates of earlier years, outlays still rose by nearlyercent, adding another billion rubles to the defense burden. In other major areas of defense spending the general pattern of stability persisted.
The continuation of efforts to achieve additional military capabilities was signaled with the announcementignificant further incroase in the overtly announced military budgetollowing the substantial expansion of outlays. This now drive toward greater military preparedness appears to be oriented toward requirements in both theand theater forces. Although some requirements may not beas moves to strengthen the forces near China, Soviet naval operations in the Mediterranean, and support to theoutlays for these purposes will probably continue-'at present levels in the next few years and could increase further. In other spendingprimarily in new weaponswill take several years to complete the major investment in several programs now in their early stages. New operating and maintenance requirements for the longer term are also being created by these programs.
Now, and the Years Ahead
Soviets plan and build theirwith the recognition that nuclear warand they believe that an ability toa warecessary condition for An elementary concern for the efficiencySoviet investment in military power haspresent leadersroader considerationtotal range of military needs and opportunities
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and to question whether forces optimized forare the most appropriate instruments of policy under these conditions.
apparent consensus that exists onfor additional military power may not extend
to the subordinate issues of military force planning and the relative priorities of other national economic objectives. By favoring defense and the consumer and slighting investment the Soviets are running risks of another slowdown in economic growth. Some evidence of controversy over investment goals was seen in the Soviet press following8 budget announcement. Although such articles have not been repeated in recent weeks, the issue probably remains alive and could be revived as an important element in Kremlin politics if the economy suffers setbacks thataffect major economic goals. Differing strategic and doctrinal viewpoints also continue to be evident in articles in the Soviet military press, revealing special interest pleas and unresolved decisions on particular military priorities.
assessing their military needsfuture, the Soviet leaders willto continue strengthening the Sovietonly for defensive reasons but to reinforce
the image of the Soviet Unionreat, power. Qualitative improvements currently planned for the US forces will not permit the USSR to stand still and at the same time maintain the degree of deterrence it now has. Soviet leaders are also coming to recognize that additional forms of power will be needed if their freedom of action in world affairs is to be extended and the freedom of action of the United States diminished.
specific military programs andbe most affected by the8 cannot yet be identifiedprecision necessary for constructingcosting implications. But, judginglines of development reflected in recentdeployment programs, in the trends inwriting, and in various militaryand policies being pursued in the Middleelsewhere, it is possible to identifyand forces likely to receive
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Prospects for Strategic Programs
There is evidence that thendCBM deployment programs are continuing and that new starts ofilos may be extended Construction of operational sitesewaalso have begun. New Polaris-type submarines will be appearing in some numbers in the coming years,ystem that could lead to the deploymentractional orbit bombardment weapon has been tested successfully. Air defense capabilities will almost certainly continue to be expanded. There is no indicationeadiness to agreereeze on ABM deployment, and without such agreement the USSR is almost sure to continue large research andefforts, either to improve the Moscow system or toompletely new system, even while it is completing the deployment at Moscow.
Together, these activities will contribute to rising costs for strategic missions in the next few years as well as to the general trend of increasing costs for operating and maintaining the strategic forcesonger time period. In combination, Soviet costs for equipping andstrategic attack and strategic defense forces are expected to average about six billion rubles per yearillion in US terras) over the next five years compared with five billion0 billion) averaqe for the.
Even if the numerical levels of new strategic weapons systems do not continue to expand as rapidly as they have in the past two years, qualitative improvements in US strategic forces will press the Soviet leaders to make similar improvements, which will maintainhigh investment levels. At the same time, the operating and maintenance costs for the systems now being deployed will have reached higher levels and will also tend to keep total military spending from dropping.
Prospects for General Purpose Forces
USSR is also expanding the rolegeneral purpose forces in ways whichclearer but which as yet cannot be defined
precisely for costing purposes. No longer tied to the single contingency of general nuclear war, the Soviet leadership is trying to give the general purpose forces the capability to respondroad spectrum of possibilities in the furtherance of Soviet foreign policy.
The army, navy, and air force elements in the general purpose mission are large but are not yet well structureduture role in non-nuclear conflicts. Molded in thes ands as an adjunct to the missile forcesuclear war, the general purpose forces were not given equalin budget deliberations. esult they nowompromise between what the military wanted and what the government granted..
he general purpose forces and the command and general support establishment have been supported by relatively stableofillion rublesear. With these resources, increasing numbers of modern weapons such as tactical missiles,fighters, and submarines were procured and deployed. Yet the means of sustaining these forces in extended operations and of rapidly moving men and equipment in meaningful numbers beyond Soviet borders were denied.
To permit an expanded role for the general purpose forces, major changes in the structure, equipment levels and service support are needed, and are probably receiving attention. Tactical aviation will soon receive equipment better suited to its mission. The naval forces are deficient in fleet air defense, open-ocean antisubmarine warfare, and amphibious operations; programs are under way
to overcome these weaknesses- Additional air logistics support will probably be provided to improve mobility of forces and supplies.
to upgrade the generalhave been held in check up to now into the requirements of the strategicother national goals. These restraintsto be loosening, and pent-up demandsstanding are finding support. Information
is still scarce on the probable numerical levels of deployment of new equipment and systems and
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on their impact on investment, operating, and personnel costs of the general purpose forces. Tho requirements for resources will, however, extend to many program elements and could generate cost increasesillion rubles orear, or the equivalent of someillion to S3 billion in US terms.
full extent of the increasenot only on the levels ofbut on the ways the forces arein the years ahead. The costssizable if the USSR continues to expandand presence in the MediterraneanEast, to increase its forces in theand along the China border, and toproxy support to North Vietnam andmilitary and guerrilla movements.
Prospectsnd Space
military research andand the space effort also augur aof the long-term upward spendingthe next few years. Over the longeris some prospect that the levelnd space may stabilize, but givenof science in Marxist thought andcompetition in space and init is highly unlikely that costsfield will be reduced significantly.
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Original document.
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